I recently visited an upscale store in NYC early mid-morning as I began a shopping trip that would take me to a number of different stores. I chose this store because it was located in a prime retail center with a strong reputation and just the kind of specialty merchandise I was looking for.
What I found when I entered the store was attractive and well-designed displays, but when it came to service personnel, they were MIA, unemotional, unengaged sales staff that were literally imposters of normal people when it came to sales. They were “pod people” salespeople reminiscent of the 1956 cult classic “Invasion of the Body Snatchers.” No emotion, no connection, just filling space on the floor.
There was no excuse. The store wasn’t busy. I was about the only shopper there, but the sales staffer behind the desk only gave me a shout out upon arriving, too busy with her important work at the computer to bother with me.
As I strolled deeper into the store, I passed a few other employees, only one of whom acknowledged me but then couldn’t be bothered. In the back I found another salesperson, also deeply involved with her computer. I asked a question, she answered from behind her screen. I basically had to drag her away from her desk to take me to onto the floor to show me something. Then she ended our discussion with a recommendation that I could go to the company website to learn more about that item and others like it. Back she went to her more important work.
The sales staff were effectively using their computer screens as protective shields, rather than seeing a live customer on the sales floor as the tremendous opportunity to make a sale.
I was thoroughly disgusted and went off to the next store on my list only to find the same thing – Another store filled with pod people staffers that needed to be brought back from the living dead. It was inexcusable, but all to prevalent in retail today.
One Strike, You’re Out!
My recent shopping experience was reinforced by a new study from Medallia Institute conducted by Ipsos, surveying some 8,000 consumers, 2,000 each in the U.S., U.K., France and Germany, about the customer experience in various service industries — including retail. The survey found that nearly two-thirds of consumers (64 percent) claim to avoid a brand because of a bad experience they had within the last year.
Given my experience, you can bet I will never have gone back to those stores again. These retailers, and too many others out there are made vulnerable by understaffed stores, both those with obvious staff vacancies as well as those with non-present staffers, who are even more frustrating to customers.
The study cites, “Today’s customers have more choices, and more power over brands they interact with, than ever before,” the report states. “It is no longer enough to simply provide a high-quality product or a competitive price. Instead, in the ‘Age of The Customer,’ brands are built – or broken – on customer experience.”
The problem of having too few or not the right retail staffers can have devastating consequences for retail businesses, Rachel Lane, Medallia digital solution principal stresses, “The high employee turnover that plagues the retail industry is particularly threatening to a brand because frontline employees have direct access to the end consumer.
“When stores aren’t staffed properly, customers may not have the experience they expect when entering a store. They may be unable to find their size, unable to flag down a salesperson to ask about ordering a different color, or be deterred by long lines at checkout. Any one of these experiences might result in a customer deciding not to make a purchase, or worse – to write off the brand altogether,” Lane continues.
The Medallia/Ipsos report is called “The Customer Experience Tipping Point,” and I couldn’t agree more with the idea that retail is at a tipping point. While retailers argue amongst themselves about the “retail apocalypse” narrative, they face another apocalypse caused not by too few customers, but too few qualified, trained and motivated retail employees to deliver the personalized customer service on which their future depends.
Lane adds, “We can buy almost anything online these days, so when a customer chooses to shop in-store, it’s typically because they’re looking for something they can only get in person — an interaction with the product and a helpful employee.”
Fumbling in the last 100 Yards of Retail
For too many years, retailers have focused on getting the right product and the right price into the right locations to meet customers’ needs when they show up at the store. But those supply-chain operational efficiencies aren’t going to get retailers to the next level, says Rogelio Oliva, professor in the department of information and operations management at the Mays Business School, Texas A&M University. They must deliver a superior customer experience to complete the journey.
“Retailing is the critical last 100 yards of the supply chain. Completing those last 100 yards takes a combination of logistics and service,” Oliva explains. “To be a successful retailer not only do you have to have the stuff at the right price and right time, you need to manage the whole customer experience. The employees are going to be the ones delivering that experience. Of course, everything can go wrong in the last 100 yards.”
Delivering a customer experience in those last 100 yards is more critical for specialized categories in retail, like fashion, home furnishings, department stores and luxury, than for other retailers like fast food or grocery where a new employee can master 90 percent of their job in a week of hands-on training. In the latter case, keeping the shelves stocked, helping the customer find what he or she wants and getting them in and out of the store smoothly is the expected utilitarian customer experience.
For more specialized areas of retail, like fashion or other high-end categories, a well-trained and motivated employee is worth their weight in gold. They provide the level of personalized service that is critical to creating customer loyalty. “The way to achieve customer loyalty is to provide excellent service. The way to provide excellent service is to have a loyal employee,” Oliva stresses. “The loyal employee knows the customer and develops the relationship with the customer. The focus for retailers is to develop and invest in your employees. If your differentiating position is service, as it must be in so many areas of retail, then service is going to be provided by that personal touch.”
Retail Staff Vacancies Reaching Critical Proportions
It is not just training retail staff that is a problem for retailers. With record low unemployment, it is getting harder to find the right people to fill open slots. Today retail is the labor market ghetto, where its denizens are often low-paid, overworked, undervalued.
The lack of retail employees is reaching critical proportions. The Bureau of Labor Statistics Job Openings and Labor Turnover survey, JOLT for short, reports that through the first five months of 2018, retail job openings averaged 704,000 open positions, which is 25 percent more than the 561,000 jobs available in the same time period in 2017. Further the pace of retail job vacancies picked up during the remaining seven months of 2017.
More Americans who had been forced to slog away in retail’s confines are now taking the opportunity to break out and find a more financially and personally rewarding job. Those retail workers fleeing in search of greener pastures are leaving their retail employers in the lurch.
Penny Wise, Pound Foolish
Observing that retailers have long been under staffing their stores to save money, Oliva argues that they are actually losing sales and profits by not providing the kind of customer service that will build customer loyalty. “The value of the employee is much higher than minimum wage. If you are going to keep well qualified service staff, it is going to come down to developing them and giving them a career path,” Oliva says. “Without providing a long-term career path, retailers are at risk of losing them to the store next door that offers 50 cents more an hour.”
While technology can fill some of the gaps traditionally provided by sales staff, it cannot provide the personalized human touch on which in-store retail’s future depends. “My research on retail and service operations proves how important the human component is on those sales floor. A retailer might be doing right for the customers, but they might not be doing right for the employee. But they need to do both. Happy employees make happy customers and retailers make money on the process,” Oliva concludes.