Top stripe

Drive revenue with CX

Retail

Four Reasons Retailers Need to Invest In People

Ananda Chakravarty
Senior Analyst
October 30, 2017

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.org/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.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.

Categories

Related Posts in Drive revenue with CX See All