Four reasons to invest in store labor

Labor was 43% of retail operating expenses based on our last US census data, but retailers haven’t been spending more on employee training [1].  A 2016 training industry report shows only 32% of those surveyed in retail are increasing their training budgets [2].  In addition, retail customers aren’t thrilled about associate help:   Forrester Technographics data shows that in-store shoppers prefer to seek help from devices over store associates for most in-store shopping tasks [3].  Physical retailers are looking for ways to contain costs as they grapple with lower foot traffic, the growth of online competition, and increased customer demands such as omnichannel fulfillment [4].  So, why should retailers invest in employees? Five factors compel greater investment in store labor:

  • Customers continue to shop in stores.  Eighty-seven percent of US retail customers are still buying in the store, with specific focus inside certain stores [5]. Customers continue to desire touching, feeling, and seeing beyond just snapshot product pictures taken in a bright light studio. Customer habits are shifting to place more importance on convenience in their shopping experience with cross-channel engagement such as in-store pickup [6].
  • People want to experience a store. Time, money and emotions help drive customers to the store. The emotional component of shopping plays a part in the drive to store engagement and purchase intent [7]. The customer is still interested in picking up their product on the way home (saving time), or finding lower priced items in the store (saving money), or even walking into a store to view things they can’t afford (status and emotional branding).
  • Before robots will come people. Associates will transition from menial and routine tasks to higher level store productivity – but this won’t be instant. The ongoing and unpredictable nature of store events makes it challenging for AI or robots to manage a store. Robots are assistants, not replacements. Retailers are exploring how robots can help associates focus on higher level tasks [8]
  • Associates are still your front line ambassadors.  Trained, equipped, and motivated associates can perform better and engage more effectively than those who aren’t, converting sales in the range of 15% to 40% in the store[9].

Read more about people investment technologies here:
TechRadar™: Digital Store Operations Technology, Q3 2016 (Updated),
TechRadar™: Digital Store Customer Experience Technology, Q3 2016 (Updated),
The State Of The Digital Store
The Future Of Jobs, 2027: Working Side By Side With Robots

[1] Based on US Retail economic data – US Census 2012.

“Out of 30 retailers examined, only 4 paid wages at or above the poverty level in the US. ‘The fact that so many companies do not pay above the poverty level aligns with … observation[s] that retail workers in general are disproportionately represented among recipients of public assistance’.” Source: “Retail Automation: Stranded Workers? Opportunities and risks for labor and automation,“ Cornerstone Capital Group, May 2017 (https://irrcinstitute.orghttps://go.forrester.com/wp-content/uploads/2017/05/Retail-Automation_Stranded-Workers-Final-May-2017_final_rev.pdf).

[2] Source: Training Magazine November/December 2016 issue, page 33 (https://trainingmag.com/sites/default/files/images/Training_Industry_Report_2016.pdf).

Retailers are investing in technologies like associate enablement, mobile point of service, store task management, and in-store communication and wearables. See the Forrester report “Commerce Technology Investment Trends: 2017 To 2018” (https://www.forrester.com/report/Commerce+Technology+Investment+Trends+2017+To+2018/-/E-RES123164).

[3] Source: Forrester’s Consumer Technographics North American Retail & Travel Online Benchmark Recontact Survey 1, Q3 2017 (US).

[4] See the Forrester report “Retailers Are Off The Starting Blocks Of Omnichannel Commerce” (https://www.forrester.com/report/Retailers+Are+Off+The+Starting+Blocks+Of+Omnichannel+Commerce/-/E-RES129303).

[5] See the Forrester report “Surprise – Retail Is Growing! Here’s What It Means For Digital Businesses” (https://www.forrester.com/report/Surprise+Retail+Is+Growing+Heres+What+It+Means+For+Digital+Businesses/-/E-RES136482).

[6] See the Forrester report “Omnichannel Mastery: Optimize In-Store Pickup” (https://www.forrester.com/report/Omnichannel+Mastery+Optimize+InStore+Pickup/-/E-RES116388).

[7] Review the Forrester report “Emotions Fuel Your Brand Energy” (https://www.forrester.com/report/Emotions+Fuel+Your+Brand+Energy/-/E-RES137439).

[8] Examine the Forrester report “The Future Of Jobs, 2027: Working Side By Side With Robots” (https://www.forrester.com/report/The+Future+Of+Jobs+2027+Working+Side+By+Side+With+Robots/-/E-RES119861).

[9] Conversion rates vary depending on industry, store and a variety of sources. Compiled sources include:
http://www.retailwire.com/public/sponsors/headcount/mpaper/conversion-stdy_mpaper.pdf
https://retailnext.net/en/benchmark/real-time-data-drives-the-future-of-retail/
http://cdn2.hubspot.net/hub/210357/file-209591223-pdf/Top_5_In-Store_Technologies_That_Drive_Retail_Sales-1.pdf
http://uk.shoppertrak.comhttps://go.forrester.com/wp-content/uploads/2016/03/Fashion-Conversion-Benchmarking-Report-2015.pdf
Interviews with Euclid Analytics, Aptos, RetailNext, Shopadvisor, IBM, Swirl, Manhattan Associates, Tyco Retail Solutions, et. al.