There’s a pent-up demand to shop now that the COVID-19 pandemic has subsided in many regions across the country. It’s clear that people have missed the social connection and thrill that comes with retail therapy. Larger retailers, including Walmart, Target, and The Home Depot, have already benefited from this retail bonanza, seeing first-quarter revenues 15 percent to 40 percent higher than the same period in 2019, according to Fitch Ratings.
Meanwhile, the National Retail Federation (NRF) anticipates “the fastest growth that we’ve seen in this country since 1984,” CNBC reports, with sales expected to grow between 10.5 percent and 13.5 percent to an estimated total of $4.44 trillion to $4.56 trillion. That would beat sales in 2019 and 2020.
However, while retailers and customers appear to be exuberant about a return to pre-pandemic days, one group is not: retail employees. The retail industry saw more employees quit in April than other sectors, with about 112,000 leaving their jobs compared to a previous peak in July 2019, according to data compiled by Barron’s.
Why? Because unhappy employees are now more confident that they’ll be able to find better work.
For too long, taking advantage of positive consumer sentiment and increased traffic has come at the expense of the retail employee experience — namely, longer hours and more arduous tasks. Without proper technology, training and infrastructure to support, employees can’t help but feel lost and overwhelmed. It’s no wonder that churn in the retail industry is higher than others at slightly above 60 percent.
As shoppers return to stores and retailers ramp up efforts to capture their share of wallet, brands that want to stay ahead of the game should also focus inward. The real retail winners will be those that are able to attract and retain amazing employees for years to come.
Reassessing the Customer Experience Starts at the Front Line
It’s no secret that the pandemic has changed consumer behavior for good. Stay-at-home orders and fear of contracting the virus caused a spike in e-commerce sales, which now has the power to overtake traditional brick-and-mortar store sales. Consumers are venturing back into physical stores with renewed expectations and lower thresholds for inconvenience. How can retailers best re-evaluate their store experience and invest in the right in-store changes to meet these evolving needs, and do so quickly? It all starts with listening to the people who are closest to those customers: store employees.
But according to the 2021 Labor of Love Report, a survey of 500 retail associates conducted by my company, Zipline, 43 percent of respondents said they didn’t feel consistently heard when making suggestions to retail headquarters about in-store changes and improvements. Survey respondents also reported they were not aware whether their employers supported key initiatives such as the 15 Percent Pledge, which promises to dedicate that much shelf space to Black-owned businesses.
These associates also believe their companies will soon be missing out: A third said they don’t think retailers are doing enough to bring back the excitement and emotional connection that customers have missed.
Another survey, conducted by Edelman, shows that the retail sector experienced a 5 percent drop in trust, among the highest of all sectors. Perhaps this is why 42 percent of the surveyed associates said they were considering or have already decided to leave the retail workforce.
Retailers that want to harness the power of their frontline employees need to build capabilities that support two-way communication and knowledge sharing between stores and headquarters. Not only will they glean valuable insights from the population of their team that’s closest to the customer, but they’ll benefit from a more engaged workforce, too. Employees who understand the role they play in the success of their company feel more connected to the brand they serve, and are less likely to leave.
Embracing New Tech
One thing the pandemic proved is that, in retail, agility is key. Just look at Best Buy, which quickly shifted the roles of its employees to handle more online orders, preparing then bringing them curbside for customers to pick up. Or DICK’S Sporting Goods, which shortly after closing 800 stores to customers during the start of the pandemic last year also modified its buy online, pick up in-store strategy to offer contactless curbside pickup. Even American Eagle Outfitters upgraded its retail tech platform, helping save the company valuable hours to dedicate to increasing productivity and updating safety measures for shoppers.
However, many retailers aren’t in the position Best Buy and DICK’S are in. Many physical stores are full of antiquated tech, bad service, and poor operations that aren’t streamlined, which will not only cost a brand its customers, but could also cause employee turnover. These flaws affect store churn and public perception, ultimately decreasing a brand’s value.
When it comes to retailers incorporating new technology, results from our survey are mixed. Slightly more than half of the surveyed retail associates said they think their brand is pioneering new ways of engaging customers in physical stores. However, only 35 percent said retailers are introducing digital payment systems, 28 percent said their employer is offering new promotions within an app that can only be accessed while in-store, and 27 percent said their employer is installing touchscreens and connected mirrors. These are initiatives that get consumers excited about shopping in a physical store, as opposed to just making their purchases online.
Allbirds, the unicorn sneaker company, showed how innovation and flexibility along with tech can best utilize staff while accommodating customers. During the time that in-store foot traffic ceased, Allbirds used tech that would connect customers with questions to someone in a store through video chat.
Still, it’s not enough to just invest in new in-store tech to reach consumers. As mentioned above, brands must invest in tools that help them properly communicate with their employees, including a system for two-way communication, to collect invaluable insights and suggestions.
Brick-and-Mortar Stores Aren’t Going Anywhere
People often say that the future of retail is e-commerce, but even the biggest conglomerates, including Amazon.com and Google, continue opening physical locations. Clearly, brick-and-mortar stores have a lot of value, but brands need to adjust the way they do things or risk getting left in the dust.
That starts with recognizing a store’s most valuable resource: its staff. Brands must put their needs first or risk becoming the latest victim of retail’s high employee turnover rate. If associates are not put first or are not heard by upper management, any steps toward progression are futile.
By incorporating new technologies, listening to the changing needs of associates, and recognizing their employees for what ideas and innovations they can bring to the table, brick-and-mortar retailers can reclaim their value and start the revival of the experience economy this year.