The retail trifecta, part 3: People make the difference

The third winning ticket in the Retail Trifecta is people: the passionate, knowledgeable and service-centric professionals who work in retail stores.

I know we all have stories of retail associates who aren’t all, or any, of those three things, but store associates’ performance is a direct result of the training, reward and recognition given to them by the retailer and owners of the brands that associates sell in store. Good service and high sales aren’t a function of good luck or a few nice people.

Last week, successful cosmetics entrepreneur Napoleon Perdis was widely reported advising Australian department stores to invest more money in store staffing levels. Having just signed a deal in the US with department store chain Neiman Marcus (which is also owned by CROSSMARK’s majority investor, Warburg Pincus), Perdis was insisting that bricks-and-mortar retailers must invest in people if they want to maintain their market share in the face of lower priced pure online retailers.

Perdis made the observation that Australian store associates were in desperate need of “a training and education program that extended beyond simply how to use a checkout”. He went on to say that Australian department stores need to invest more in associates and “bite the bullet” by improving the induction program for cosmetics floor staff before they begin working.

”They get inducted on how to use the cash register, on how to be polite, but they need to be inducted on how you close on a customer, how you give information to a customer, how you network through cross-selling.”

And we agree: investing in store associates is the third element in creating a great experience for shoppers, increasing their dwell time, and the amount they spend in store. Importantly, it is also the key point of difference between the traditional retailer and pure online retailers.

In Australia, both DJs and Myer have increased frontline staffing and remuneration levels in key stores. But in Australia, unlike the US and Europe, our core pay rates are so high that there is no room to pay meaningful incentives or invest in training AND still be able to compete on price with pure online players. When a shopper shops online they have already invested their own time on building product knowledge and checking pricing before they purchase. So how can traditional retailers maintain price, but invest in the shopper experience as well?

Let’s step through the economics and responsibilities of the retailer and brand owner in Australia before we talk about the specific ways to deliver stellar service via store associates.

Paying national FWA award rates is the investment in associates by retailers to come to work and professionally use their systems, and to represent the retailer’s brand in store. Investment above this base award level is the brand owner’s responsibility.

Myer pays its store associates to be part of the Myer team, to possess the sales skills required to be a successful store associate, to be able to use to Myer’s POS/BOS systems and to understand what the Myer brand stands for in order to look after its shoppers. Over and above this Myer training, Napoleon Perdis is responsible for investing in product training so that Myer associates can highlight the benefit of Napoleon Perdis cosmetics ahead of say L’Oreal to consumers, and to provide incentive payments to store associates for selling Napoleon Perdis products.

So, how do we do this? Well, online mobile product knowledge training via custom-built training and reward apps are a start. These allow store associates to be rewarded for learning about products and benefits on their own smartphones in the down times at work, at home or on their journey between the two. This builds product knowledge and confidence, just the same way an omni-channel shopper does.

CROSSMARK uses a mobile training platform called “learn & earn” that educates store associates about the product, tests their knowledge in fun ways and rewards them for their results. The training is funded by manufacturers and brand owners that sell those products in the retail store. In retailers with class-leading POS/BOS systems, tablet technology in the store, sometimes funded by manufacturers and brand owners, allows online training to take place at any time.

The aim in the third element of the Retail Trifecta is to develop passionate store associates, who are rewarded and recognised for having eponymous global product and pricing knowledge, and to be able to sell to knowledgeable omni-channel shoppers. In many stores, if you have the online price available, retailers will go some way to lowering the price if you ask the store associate. However, a retailer shouldn’t and doesn’t need to price match if the knowledgeable and well-equipped store associate is giving the shopper a great service experience.

Retailers can’t create great store associates on their own. It requires collaboration between the two parties with whom we the shoppers choose to spend our money: the retailer and the brand owner. Together they can develop confident associates who deliver brand alignment between the consumer brand and the retailer’s brand. In return, store associates are supported by knowledge, reward and recognition for every contact and every transaction with the shopper. And that delivers a wonderful shopping experience.

As CROSSMARK CEO, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia and across the world. His international career in sales and marketing has seen him responsible for businesses in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands.

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