Back to News & Views

Is staff the key to retail survival?

10 September, 2019
Categories: Commercial, Retail

Traditional retailers are battling online stores in a harsh retail environment. Their staff could be their key to survival.

At the coalface of shopfronts stands a sharp looking, well-mannered character. They are the link to all manager-approved discounts; they are the holder of all product information; they are the unlikely heroes of retail in today’s digital age. They are retail staff and could be the key to retail survival.

It pays to invest in staff

We’ve all had those unexpected positive shopping experiences. Where, after a sorry drive to a shopping centre during precious weekend hours, you returned home happy with your purchases and not at all thinking, “should’ve bought it on ASOS.”

Maybe you struck a deal, maybe you nabbed the last pair of size 9 ECCO shoes, but almost certainly you had helpful staff adding to your experience. They were probably engaging, definitely knowledgeable, and would’ve overshadowed your own ability to hunt down the newest, cheapest, techie-est thingamajig.

This is what research says is the key to retail survival in a harsh environment created by the digital age: It pays to train staff.

Staff knowledgeability is like “a rising tide”

A study from Wharton School used data from about 300,000 sales staff over a three-year period to show the impact of training on retail staff. Those staff who underwent any training whatsoever were 23 per cent per more productive than those who had none.

“I think customers often times don’t intend to showroom (inspect a product in-store before buying it at a cheaper price online) but end up shopping online because they get better information online than they’re getting in the store,” says Marshall L. Fisher, professor of operations, information and decisions at Wharton.

Wharton School, of the University of Pennsylvania, says staff training could combat online shopping based on data from approx. 300,000 sales staff.

These days, customers have infinite product information available to them thanks to online access and smartphones.

How do retail staff compete? By proving they have significant understanding of a product to gain customer trust, create long-term loyalty and satisfy a need for instant gratification.

Knowledgeability, the study says, can be like “a rising tide that lifts all boats.”

How retailers can satisfy ‘Consumer 2020’

Consumers expect sales associates to educate them better than a simple Google search can, and to provide a positive experience at every point of the sales process.

This hard to please customer is being called Consumer 2020.

After the 2008 global financial crisis shook the spending habits of most, there was a call for a social revolution: more trust, more stability and better educated buying decisions.

The call was answered by online channels and social media, which provided consumers with a massive platform to communicate information with each other. It’s fashioned a more powerful consumer, who has a few prerequisites before buying from bricks and mortar stores.

Trust is of huge importance to Consumer 2020 after ingenuine companies and organisations triggered the collapse of housing and finance markets. Nowadays, consumers prefer peer recommendations over company information, so authenticity in a retail environment is more important than ever.

Consumer 2020 is always “on.”

Far from patient, they expect quick information and a smooth end-to-end buying experience. So, a trained sales associate who is quick to engage and educate an informed customer will be much more likely to retain their business. Waiting in queues or being left unattended is cancer for Consumer 2020.

Consumer 2020 prefers peer recommendations over company information. So, authenticity in a retail environment is more important than ever.

And finally, Consumer 2020 is younger than the average pre-2008 shopper.

Loyalty is easily lost for this younger generation of customer, as distractions and peer opinions sway their buying behaviour. Retailers can’t rely on older, typically loyal customers forever. And if companies and their staff misstep, they risk losing the thin loyalty of a youthful, distracted Consumer 2020.

Yesterday’s tools for today’s retail challenges

Sure, it is still crucial that retailers adapt to digital demand.

Wesfarmers Group chief executive Rob Scott told analysts that the largest change seen group-wide in FY19 was a step-change into data and digital. Its net profit improved 13.5 per cent to $1.94 billion in the 12 months to June 2019 and total online sales grew 33 per cent.

But unless bricks and mortar stores abandon their shopfronts for a computer and a website, they’ll need to sharpen their existing tools.

JB Hi-Fi have heeded the advice of Wharton and implemented in-depth sales regimes for their staff.

And Lulelemon has just partnered with Swinburne University of Technology to provide free business courses for store managers.

If a staff member can find the ideal product from a customer and explain its benefits in more detail than online reviews, the better armed they are against showrooming.

Retailers should hire for personality and train for skill. They should implement tailored training programs for staff, and even outsource training to external providers.

JB Hi-Fi know all of this. In brutal retail conditions, its full-year profit rose 7.1 per cent to $249.8 million in the 12 months to June 2019.

Because of a focus on staff training, some retailers are not just surviving but thriving in a digital retail age.

Properties & Pathways is a commercial property investment business. We provide investors the opportunity to invest alongside us in structured syndicates. For more information, get in touch with us today.

Want an investment you can trust?

With proven results and transparent management? Properties & Pathways offers secure and lucrative investment opportunities.

Learn MoreContact Us