Retail Requires a New Approach to Managing Talent
The retail world is shifting under brands’ feet.
Retail has dependably been an industry driven by change — changes in fashion trends and the changing of the seasons, changes in the market and changes in technology.
Today, those rhythms are accelerating or disappearing. Previously reliable sales channels like department stores are no longer dependable. Just because product is distributed well to shelves and racks everywhere no longer guarantees it’ll sell, and just because a salesperson is scheduled doesn’t mean they’ll convert browsers to customers.
There are new sales channels with plenty of growth potential for brands, but the old methods of hiring, deploying, and managing in-store talent can’t keep up.
Brands can no longer conduct retail business as usual. They must adapt their talent management practices to match the trends in shopper behavior and the labor market.
What Is Causing the Shift?
Many headlines over the past few years have heralded the death of brick-and-mortar retail and the inevitability of Amazonian dominance, dubbing the shifting industry’s state an “apocalypse.” What’s actually driving all of this?
Everyone knows that retail as a whole is under pressure, but certain brands are thriving. Why are stores like Apple and Sephora succeeding while others are floundering?
The answer is simply that these stores have great employees who are managed efficiently. Smart brands are putting their own qualified people in the store. Today, customers are heading into brick-and-mortar stores for product knowledge and for experiences they otherwise can’t get online. This means that a direct connection between the brand’s representatives and its customers is especially important.
The Power Is in the Brands’ Hands
What do shoppers actually want from retailers across their sales channels? The answer is connection. Well-trained associates who offer empathy and deep product knowledge are more likely to impact a purchase decision. In fact, shoppers say knowledgeable store associates are twice as likely to influence their purchase decisions as technology is.
Consumers demand more convenience from brick-and-mortar experiences and more knowledge and availability from retail staff. These means that the power to succeed is in the hands of the brands. To take advantage of this situation, brands need the flexibility to quickly deploy their best-skilled employees where they’re needed the most.
The Retail Workforce Is Changing
Retail is on a growth tear that shows little signs of stopping. According to the Bureau of Labor Statistics’ 2010-2020 projections, employment in the retail industry overall will grow by about 12 percent for a total of 1.8 million new jobs.
As the industry expands, the nature of its employment is changing as well. According to researchers from Harvard and Princeton, “The percentage of workers engaged in alternative work arrangements — defined as temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers — rose from 10.1 percent in February 2005 to 15.8 percent in late 2015.” While these figures account for the entire workforce, retail does traditionally draw from this pool of talent. As alternative work arrangements proliferate, they are shaping the character of retail employment.
Retail workers in general demand flexibility. According to ManpowerGroup, “Twice as many retail candidates want part-time work than any other industry, and 31 percent of retail workers also prefer to choose their own shifts, versus 18 percent across other industries.”
What Should Brands Do?
Brands can profit from these shifts by changing how they manage their workforces. There’s no alternative way forward: The traditional workforce is gone, and the new workforce cannot be managed via traditional methods. Reaching this new workforce requires new technologies specifically designed for the purpose — and investing in those tools should be a top priority. In a survey conducted by Accenture, 79 percent of retail executives said being able to integrate “a liquid workforce” into their business models would give them a competitive advantage.
One key tool brands will need to adopt will be more flexible scheduling platforms. Using a digital platform to source and manage talent can help retailers rapidly scale up and down with shifting demand. Furthermore, dynamic scheduling and shift management can give employees options on where and when they will be working on a day-to-day basis — a capacity that, as we’ve seen, retail employees value highly.
Scheduling with a labor management platform requires not only a technology shift, but also a mindset shift. McKinsey notes that “an activity-based approach [to scheduling] — one that matches store employees’ working hours to a changing workload, so that the right employees are working at the right times, performing the right tasks” — can reduce store labor costs by 12 percent.
There’s a pressing need in the retail industry for companies to optimize their labor spend in the same way they’ve implemented technology to optimize their supply chains, marketing, and other business functions. Knowledgeable, flexible talent is perhaps the most crucial piece of a healthy retail business in this new landscape. Technology has the ability to empower brands to significantly reduce their labor expenses while also increasing sales, ensuring they’re able to staff their stores with the best talent based on real-time needs.
Glenn Laumeister is the CEO of AllWork, a talent-matching platform for brands and retailers.