On the heels of a disappointing Q4 and the recent resignation of CEO Brian Dunn, Best Buy is beginning what will surely be a long, painful transformation. Frankly, I’m not surprised by the troubles Best Buy faces. I’ve always found their prices too high and the stores difficult to navigate. But most of all, I’ve been frustrated with the associates in the store–who often appear more interested in speaking to each other or selling me a warranty than solving my problem.
But are the individuals to blame, or are they just part of a bigger problem in retail–where pay is low, rewards are little and career paths are often non-existent?
According to Zeynep Ton, better jobs may be the answer to some of brick-and-mortar’s woes. In Why "Good Jobs" Are Good for Retailers, Ton argues that a heavy investment in store employees can result in segment-leading customer service and strong financial results, without necessarily forcing a retailer to raise its prices.
Just look at Apple Retail for proof that empowering a staff can lead to a great customer experience. But it takes more than paying employees more.
“Employees will work hard for a paycheck, work harder for a person and work hardest for a purpose,” explains Joe Trueblood, CEO of business consultancy Amplify.
I think Trueblood and Ton are dead-on. In this article, I’ll explain how today’s educated consumers require retailers to invest more in their employees, and how this can result in a memorable customer experience that develops loyalty and drives revenue.
The Educated Consumer Evolution
Today’s Internet-savvy consumers have access to detailed product information, customer ratings and reviews, and much more. And consumers know that they can find cheaper prices for most goods online. The result is that shoppers walk into stores with high expectations, according to Patrick Mustico, Regional Vice President at sales improvement firm Huthwaite.
“Consumers are using the Internet at the beginning of the buying cycle,” says Mustico. “Sales associates have to be better because of the educated consumer.”
To differentiate their store from online retailers, retail associates need to deliver a level of service that meets the higher expectations of shoppers. Associates need to know more about their products than a website can convey, relate to customers and share their own product experiences in a way that will encourage them to buy from the store, not online. Of course, this isn’t easy.
An Inch-by-Inch Paradigm Shift
Empowering sales associates goes against the old guard of retail, where management is asked to control payroll expenses and the best sales associates are promoted to the central office.
Moreover, investing in sales associates is difficult for management because it’s a long-term strategy, believes Elaine Buxton, President of Confero. But most associates are only in their jobs for the short-term. As a result, “It’s like trying to put aside money for retirement while living paycheck-by-paycheck,” explains Buxton.
Overcoming management resistance to investing in store employees requires a paradigm shift. Struggling brick-and-mortars often reflexively reduce payroll expenses to slow the financial impact of decreasing same-store sales. However, Ton’s research shows that employee investment can actually boost revenue–and may be the only option to increase sales in chain stores that are losing sales to e-tailers.
For example, Trader Joe’s pays twice as much as some of its competitors, but its sales per labor hour are 40 percent higher than similar grocery chains. This is because associates are more knowledgeable and effective in the roles as they’re rewarded for their expertise and sales skills.
Source, Train and Empower Sales Associates
To build a team of knowledgeable, problem-solving associates, retailers have to rethink and further invest in their hiring and onboarding processes. Here are five general strategies:
- Rethink associate hiring. Associates should already be a domain expert, or have the ability to become one. Retailers should thus hire associates who have a bona fide interest in what the store sells. (That's one of the reasons why Apple asks its retail applicants to describe their first experience with Apple products during the hiring process.) Associates who are invested in what the store sells will love what they do–and customers will notice.
- Improve entry-level training. Mustico points out that a stores’ customer experience is channeled through sales associates. “Entry-level staff are the employees that touch the customer,” says Mustico. Associates need more than a company orientation and instruction on performing basic tasks–they need scenario-based training on both common and unexpected problems. This can be seen in Apple’s retail mantra to help customers solve problems they “didn’t realize they even had.”
- Provide continual guidance. Automated training methods like online tutorials and tests don’t develop the skills associates need to solve customers’ problems. “Mastery and application of the skills is what’s necessary to actually help a customer,” says Buxton. Hands-on, monitored training makes a real difference. Have new associates shadow veterans as they help customers–ask them what they would have done to help. Beyond initial training, Trueblood emphasizes that retailers must check-in periodically with employees on their progress toward meeting their individual and group goals, as well as discuss unforeseen difficulties and unexpected events.
- Offer careers, not jobs. If brick-and-mortars have any chance of remaining viable, they have to do more than create jobs–they have to create careers. Create a hierarchy within the store that rewards associates for knowing their stuff and going above-and-beyond assisting the customer. Case in point: a local Whole Foods associate loves his craft enough to operate a meat prep blog. The company caught wind and put him through a social media course to make sure he was in-line with its corporate policies. This is the type of attitude that more companies should take– empower associates to find fulfillment in their roles.
How else can retailers empower sales associates to improve the customer experience and drive revenue? Please leave a comment with your thoughts. Thumbnail image created by Steve Depolo.