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To stay relevant, retailers should practice their workers’ priorities

Posted by Danielle Weinblatt

The only constant for traditional retailers today is constant change. One truth that stands up to this fire hose of transformation: customer experience can differentiate real-world retailers from the virtual, keeping them relevant and giving them their edge. To win, traditional retailers need talented hourly workers willing and eager to stay. And even if they can’t compete on wages, there’s a way retailers can get this invaluable talent on board for the long haul: take them along with as you innovate.

According to recent studies, 79% of the American labor force works hourly, and those under 30 make up more than 50% of that group. Older hourly workers do tend to have more education. But 45% of the younger set have some college, and 15% of that number have a bachelor’s degree. And many of them choose hourly work not because they have to… but because they want to. They do so for the same priorities that have fueled the gig economy: flexibility, independence, and having a job that fits your life (instead of the other way around).  

Not surprisingly, when retailers pay attention to the priorities of their workers, these tend to align with and support their organization’s own innovation needs. Savvy retailers who give hourly staff a path for progress can gain real partners in this time of rapid change.

What workers want

A fast and digital hiring process. For many hourly workers, getting bills paid depends on getting hired quickly. The faster retailers can move a candidate from application to first day, the better chance they will have of securing that employee--even if a slower moving competitor might offer potentially higher compensation. Making it easy and in line with their preferences also matters: young hourly workers value a digital and smartphone-friendly application journey over the usual pen and paper forms filled out in physical locations.  

Stability and flexibility. In the face of e-commerce challenges, many traditional retailers have run a race to the bottom--cutting short term staffing costs with lean and on-call scheduling. Research convincingly shows, however, that giving hourly workers a predictable core schedule paired with the ability to pick up and switch shifts directly with colleagues produces dramatic results. In a recent 35 week study with Gap, 28 stores that implemented these practices saw in-store sales increases of 7% and labor productivity increases of 5%. Store traffic remained stable during the study, and sales gains came from increased conversions and larger sales per basket--in other words, a more highly engaged staff interacting successfully with customers. Minimal out of pocket expenses ($31,200) led to an impressive ROI ($2.9 million).   

The study also documented many of the ‘hidden costs’ of on-demand scheduling--such as high manager time investment, weakened process conformance (stock irregularities, theft), and poor customer service (long check out lines, lack of adequate staff on floor to help, etc.).  Although the benefits and costs clearly justify this new way of doing business, the switch will require a reset of HQ mindset to align more closely with the long-term sales growth goals of store managers, rather than the short term drive to make numbers--often through minimizing labor costs.

Leading retailers have started putting these findings into action. Last November, Walmart announced the implementation of ‘My Walmart Schedule’--a new and digitalized approach designed to bring consistency, flexibility and growth opportunities to store associates’ work schedules. The app and program include features such as the ability to swap shifts directly with colleagues, receive training in new areas of the store and work in new capacities, choose a ‘core hours’ schedule, and pick up unfilled shifts--all through a staff member’s mobile phone.    

Value and purpose.  Just like any other type of employee, hourly workers want to feel that their work matters and makes a difference -- both to their immediate team and organization, and to a larger external goal.  The more actions retailers take to honor that drive--such as taking the time in recruiting and training to clearly communicate company values, and instilling them in team culture--the more impactful hourly workers become. In fact, according to a 2016 study, 85% of companies that helped their employees feel more purpose-driven saw significant revenue growth.   

Hourly workers also want to feel valued. And this growth-driving engagement happens not only because company values inspire hourly workers to give tasks their all, but because the company’s investment of communication and education itself communicates a recognition of their worth.

Industry innovators understand investing in hourly workers pays off. For example, Galeries Lafayette’s new flagship location, which recently opened on Paris’ Champs-Elysées, leverages progressive staffing practices to set employees up for success.  Instead of relying on business-as-usual department store staffing, the landmark store has recruited a 300-person team of ‘personal stylists,’ selected via Instagram and trained in a ‘retail academy programme’ in conjunction with the Institut Français de la Mode (IFM).  Armed with the education and desire to deliver a unique customer experience, and empowered by their employer to do so, this engaged group of workers is poised to change the game.

A culture of learning and growth.  A clear path to advancement--including structured reviews and promotional opportunities with definite timelines and criteria--helps attract talent and reduce churn. But so does a culture of ongoing learning.  Retailers that provide opportunities for hourly workers to experience different positions, master new tasks and diversify skill sets increase their understanding of and engagement in the work. Companies such as Lululemon that support their workers’ interests and aspirations outside of the formal workplace increase loyalty and enthusiasm on the job.  And employers like QuikTrip, that reimburse for employees’ tuition costs and promote entirely from within, not only get voted year after year onto ‘best places to work lists’ -- they receive an average of 83 applications for each vacancy they fill.  

Additionally, to survive and thrive through this time of accelerated technological change, workers need to problem solve, learn from failure, collaborate and iterate, adapt to change and pivot quickly.  Cultures that value continual learning and personal and professional growth build and reinforce these capabilities among hourly workers --helping to future-proof those employees, and the companies they serve.

In today’s landscape, customer experience gives traditional retail its edge--and engaged hourly workers are its lifeline. Traditional retailers who partner with their hourly workers, including them in and enlisting them for innovation initiatives, will find dynamic and talented allies to keep them relevant today and help them transform for tomorrow.