Think about the last time you entered a retail store.
Did you interact with a store associate? If you did, what added guidance did the associate bring? Did they influence your purchase at all? Did you leave the store satisfied?
Sometimes, shoppers have more negative experiences with associates than positive ones. But this is an issue some retailers are trying to address.
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For example, Kip Tindell, Founder and CEO, at The Container Store, is trying to prove to investors that paying front-line employees up to $50,000 a year is beneficial in the long run. However, other retailers are on the other end of the spectrum. Walmart recently came under scrutiny for cutting health benefits for approximately 30,000 part-time employees.
So what impact do these decisions have on retail success? The RTP team shares their thoughts:
Debbie Hauss, Editor-in-Chief: The Container Store has consistently invested in their workforce and it’s proven to be a successful business strategy. Zappos has taken a different approach, offering employees who are not performing adequately as much as $5,000 to quit – noting that in the long run those employees would cost the business much more. Amazon has since copied that strategy. It’s been proven that a happy, educated, highly motivated employee delivers a better customer experience and therefore increased revenue for the retail brand. Retailers should not take this lightly. Whether it’s the Container Store approach, the Zappos tactic or something else, retailers must invest in their employees.
Alicia Fiorletta, Senior Editor: Although a retailer’s category significantly impacts the type of employee they want to onboard, I think all retailers want to depend on their employees and tout them as brand representatives. However, a lack of education, empowerment and most importantly, appreciation, can prevent this brand advocacy and loyalty from igniting. While there are many retailers who are “letting the money talk” such as The Container Store and even Costco, I think it’s also important that employees have the tools, resources and education to do their jobs effectively. After all, providing these tools is a long-term investment in your employees, and I think that can impact their overall engagement with a brand.
Rob Fee, Managing Editor: If there is any truth to the saying that you get what you pay for, then based on these two examples, there is a huge difference in the levels of service at The Container Store and Walmart. I think most people already knew that though. These two retailers have different requirements of their associates, and their approach to compensation reflects this. When I go to Walmart, I know what I want. The goal is to get in and out quickly, and typically, the only store employee that I interact with is the one working the register. At a store such as The Container Store, I’m often not aware of all the options offered and require much more shepherding through my purchase. In light of that, I can understand why more specialized associates capture higher wages. However, companies that ignore the well-being of their employees risk attracting low quality applicants, high turnover rates and poor customer interactions. Unhappy employees lead to unhappy customers, and I’m not sure that is a gamble worth taking.
Kim Zimmermann, Managing Editor: It really is a matter of wanting order takers, or consultants interacting with your customers. In a situation like Walmart, someone processing a transaction is all that is needed. But when I go to somewhere like the Container Store or a home improvement store, I am looking for more of a consultant. Someone to help me choose the right product and know what to do with it when I get home. That’s typically why home improvement retailers hire retired plumbers, for example, to work in the plumbing department. You pay for expertise and dedication.
Glenn Taylor, Associate Editor: It sets an excellent precedent that you could only hope many other companies would strive to emulate at some point. It’s also refreshing to know that there are retail employees who are thought of as more than just a replaceable unit. At Whole Foods, the average hourly wage for full time team members was $18.89 in 2013, which isn’t quite Container Store level, but still is pretty impressive given what we come to expect from may retailers. The company’s co-CEO, John Mackey, even reduced his salary to $1 per year and elected to forgo any future bonuses or stock options.
Brian Anderson, Associate Editor: To put it bluntly, it isn’t the best idea to upset your employees when they are the initial contact when customers enter and leave a store. From a customer’s point-of-view, I’ve been in countless situations where unhappy employees managed to turn me off from making a purchase that I really wanted to make. Costco is a retailer that comes to mind as a company that is successfully investing in their workforce. The company’s views on personal and career growth, a supportive work environment (as well as awesome benefits) is what keeps employees – and ultimately consumers – happy.
How is your retail organization investing in employees? Are there any other examples you think are best-in-class? Share your thoughts in the comments section below!
