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In America and Europe, retail is a major employer, especially for women and young people. Retailers are the largest private-sector employers in America with 32 million workers, and a staggering 2.4 million retail jobs were lost in March and April 2020. In Europe, about one in six workers have retail or wholesale jobs. Whereas they have never been easy, with low wages, permanent pressure over turnover, chronic understaffing, no weekends…, retail jobs have become risky positions pushing workers further away from stores.

At the same time, such jobs have drastically changed, and not in a good way according to the staff fleeing from stores. In a survey done by RWRC (a marketing agency working exclusively in retail) in December 2020, 75% of the 500 British store associates involved think that their job became more complex since Covid. In the United States, a recent survey by retail operation platform Zipline says 42% of retail workers are either considering or planning to leave retail post-pandemic. Some moved to distribution centres, but this is not a solid option especially given warehouses are far from cities, and jobs are more physically demanding which might not be suitable for women.

At this point of the year in 2021, retailers are facing a real staff shortage putting at risk a much-anticipated business rebound. Government support plans and the fear of catching Covid while working may be of some influence on the current state of labour. Also contributing to the transformation of retail staff becoming a rare breed in the United States, fashion retailers are hiring sales associates at a rapid pace unseen in the last decade. But that doesn’t explain the whole labour issue. What’s happening to retail staff? What should be done to make retail attractive again?

The retail days of yore are over

Not long ago, if you were a sales associate, your responsibility was to sell stuff in store, period. Those were simpler times. Nowadays, and with Covid putting more pressure on business and more expectations on retail staff, anxiety has increased while responsibilities were dramatically shifting, and higher flexibility was required to adapt to unprecedented conditions.

It has become an understatement to say that retail is not only about selling things anymore, and so are retail jobs with store staff transforming to multitasking employees. Now they have to be able to sell both physically and distantly, prepare and ship orders, organise kerbside pickups, become tech-savvy, be brand ambassadors through social media (or “mini-marketers” as Marc Metrick recently said about Saks sales associates), provide experiences to customers, and learn wider and wider marketplace product catalogues. Worse, retailers being in a very difficult position, an additional compensation is not always part of the equation. And in the end, due to Covid closures and massive digitalisation, jobs are truly at risk and sales commissions are vanishing. To a certain extent, sales associates find themselves stuck between fighting to increase the company’s turnover (as well as their own revenue) and defending their sales commissions against the online business, accused of taking away sales that associates judge to be theirs.

Overcoming resistance to digital…

Changes are massive and not everyone wants to (or can) adjust to such transformations. Facing online competition, brick-and-mortar retailers, along with their staff, have to adapt. The crucial and human relationship between sales associates and key customers is becoming digital. Even though they were used to texting their clients, store staff had to adopt additional tools such as WhatsApp, Instagram and WeChat.

Now retailers, especially in the fashion area, are adding clienteling software on top of existing tools. For instance, Neiman Marcus acquired Stylyze, a software making outfit recommendations based on what customers have looked at or purchased. That’s great, but such a tool heavily relies on data and less on sales associate skills, which might be demeaning for some. Anyway, two months after the technology was rolled out and integrated into NM Connect (the digital software staff uses to communicate with customers), it resulted in USD 60 million in incremental sales. In order to handle relational shopping operations, Magasin du Nord also successfully launched a digital communication solution with Clientela.

… And rethinking incentives

The first thing coming to mind when thinking about attracting employees is money. While retail jobs are often low paid, it is a long process to increase salaries mostly because there is no turning back. Walmart and Target entered such a process before Covid. With the pandemic, Target doubled down on its investment in the workforce by giving out bonuses six times in a row since April 2020. Last May, sportswear brand Under Armour did the same by increasing its minimum wage in the United States from USD 10 an hour to USD 15, hoping to fill some 3,000 available positions in stores and warehouses. Kohl’s also recently rewarded loyalty by giving USD 100 to USD 400 bonuses for store and distribution centre employees staying on long-term. Some American retailers also offered immediate sign-on bonuses.

As increasing wages is becoming a broader trend, retailers also have to adjust their commission schemes if they want to overcome resistance to e-commerce and make digitalisation a success. Fighting resistance is crucial and sales associates have to embrace digitalisation as part of their job. In regards to such evolution, El Corte Inglés has set a successful policy to involve store staff and make its 2-hour delivery really work. During the IADS Merchandising Meeting dedicated to Cosmetics & Beauty, they explained that orders, placed online, are prepared in-store, and employees preparing them receive a bonus while commissions on sales are assigned to the store.

During the 2021 third IADS CEO Quarterly Exchange, Fnac-Darty CEO Enrique Martinez explained the store’s incentive strategy. E-commerce was considered as the enemy among store staff. But thanks to a new scheme integrating digital sales, store associates are now seeing them as a financial opportunity. With incentives on sales usually representing 10% to 15% of their pay check, sales associates are now benefiting from the same incentives as soon as the store is involved in some way in the selling process, whether it’s the inventory, the delivery or the salesclerk being part of the operation. One question remains though: should sales happening 100% online be integrated into the store metrics? For sure, such integration would reinforce staff loyalty.

Reinventing working conditions

But money is not the only way. Improving working conditions can be of some help. Even though working from home has not been a picnic, it has allowed many people to keep their job through the pandemic and onward. As the world is expecting other major disruptions in the future, retail jobs will be impacted again, and this is not very enticing. Even though some people benefited from government or company support, what they really want is a steady job and not feeling at risk about their position. This is raising the question of how retail working conditions could evolve to both be able to manage disruption and retain employees. Since everything is digitalising, including sales, some retail staff could work from home, offering them both more security in their job and possibly better working conditions at a time when some stores very existence is questioned.

Madison Reed, an American hair salon chain, paved the way in that sense. When salons had to shut down last year, the company decided to keep its 100 hair colourists and to launch online ‘colour parties’ where they would act as virtual consultants helping women colouring their hair at home. It was a huge success in terms of revenue but also in terms of employee loyalty. A year later, and even with salons reopening, the party is still going on and it seems it’s a permanent change for the company workers. Eighteen new colourists have been hired since then to meet the increasing demand.

Another example is coming from Apple. Called “Retail Flex”, a bunch of retail employees will test a hybrid in-store and at-home working model for 6 months. These workers will deal with online sales, customer service and technical support, moving between their store and their home depending on where the customers demand is. Paychecks will be the same whether working in-store or from home, and internet expenses, as well as office equipment, will be partially supported by Apple.

Training and promoting

The rapidly changing retail ecosystem is requiring additional skills that sales associates don’t necessarily have. So, they need to be trained to feel comfortable and efficient doing their job. While younger workers might need more knowledge about products and selling technics, seasoned sales associates (who are usually taking care of the top customers) might need a little help on the technology side. But in any case, training is a tricky question for retailers. Considered more an expense than an investment, they are often reluctant to spend money on expensive and questionable training programmes. Especially on retail staff whose turnover rate is usually high: in the United States alone, the annual turnover rate among part-time store employees was 76% in 2019, according to Korn Ferry.

Obviously, training on product knowledge is highly necessary as a lack of it is repellent to customers. Employees at Trader Joe’s supermarkets, for example, are expected to taste products. It prevents them from boredom and most importantly, they can answer questions about what they sell. This kind of effort contributes to why Trader Joe’s is in the top 5% of similar-sized companies for employee retention, according to Comparably, which rates company cultures. Another example is coming from Sephora where the training programme includes tailored development plans, a “Daily Dose” of training, and free classes at Sephora University.

“The retail workforce is almost more important than in pre-pandemic days,” said Ron Thurston, vice president of stores at Intermix. “These are the people with the most knowledge of your brand, the customers and product feedback.” Despite such enthusiasm, it’s a well-known fact that retail employees are rarely considered to climb the company ladder and have access to better positions. Thurston adds: “At Intermix, every employee sits down with a manager on a quarterly basis to discuss career goals, create individual development plans, and share any open headquarter roles that may be available.” If really enforced, such HR policy can allow companies to develop employee knowledge and perspectives, really identify people with strong potential and ultimately increase loyalty.

Enforcing creative measures

Knowing a part of the retail staff has switched to other jobs during the pandemic, there are additional measures that can be taken to attract workers back. For instance, Vashi, a British jewellery company, decided to offer perks to store employees: they are entitled to a pension plan, 29 days of annual leave, free gym membership, life insurance, access to an online physician and prescription service and a mental health counsel. Such measures come at a price but who wouldn’t join? Kohl’s, when recently hoping to hire 5,000 associates, made publicity about some competitive edges such as flexible schedules, and an immediate 15% Kohl’s associate discount.

To be in step with younger employees, retailers are being innovative in areas some wouldn’t think of. Korean department store Hyundai has completely revamped its reporting system to better collaborate with Millennial and GenZ staff. Accounting for 80% of its workforce, their habits and expectations had to be taken into consideration by lifting bureaucracy burden as well as simplifying and digitalising reporting tools. Employees are now simply sending notes through a messenger app.

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Covid pushed retail workers to reflect on the meaning of their jobs. While communication between each level was off, or in jeopardy during lockdowns, deep questions probably arose such as engagement versus wages, work direction, career opportunities, and empowerment. Such topics are usually missing in the normal work routine, and with Covid, some jobs lost their meaning and value to the very eyes of the ones involved. Besides improving pay checks or working conditions, companies should add significance and direction to the retail they are rebuilding. More and more people want to be proud of the place they are working in and feel they are part of something exciting and bigger than them. As they  picture themselves as part of a community in their daily lives, they want to relate to a company culture. Will retail be up to it?

Credits: IADS (Christine Montard)