It’s all change in retail. The one phrase on everyone’s lips at NRF’s Big Show 2017 in New York, from the innovation demos to the keynotes, is that retail will change more in the next five years than it has in the last 50.
But for an industry that employs about 10% of the US workforce, that big change carries a big responsibility. And it means a change in the roles people play in commerce and retail, according to themes that emerged at NRF 2017. Of course there needs to be investment in technology, but this needs to be matched by an investment in people from non-traditional backgrounds, with skillsets that haven’t always been associated with the shop floor.
One simple reason for this is that the store visit is now right at the end of the customer journey. Often a consumer will have already decided what they want before they even set foot on the premises – looking up price comparisons on line, seeing what friends have bought and what they think of things – so meeting this new, informed consumer and creating a seamless conversion is critical.
“[As a retailer] you’re only as good as your last transaction,” says Greg Foran, president and CEO of Walmart. “And now we run an ‘omni’ business so customers can shop whenever and however they want. You can see people in our stores pull out their phones and make transactions online – ordering and getting things delivered to their home.”
Where customers now have the power and can choose how and when they want to purchase, the onus is on the store owner to make that experience so enjoyable and easy that the customer comes back. “We’re all trying to create a sticky relationship with the customer that says, ‘Hey, I want you to come back and do business with me,’ because we’ve given them something or done something with them,” says Foran. And to do that well, to make it truly personal, “you’re totally reliant on the associates within your business.”
For Wal-Mart, angling to meet this change means a combination of entry-level programs and academies to give their people the right skills, plus investing in retention and technology, so that associates on the floor have the tools, the confidence and the skills to complete their jobs quicker.
Training staff in the right tech – and keeping them – is a big focus for Terry Lundgren, president and CEO of Macy’s. Last year it trained 600 technologists on how cloud can be used to satisfy demand in peak periods, and the company’s leadership institute ensures that training doesn’t stop after year one, but continues into people’s careers.
But how to attract the right talent? After all, retail isn’t the sort of thing you’d think STEM students would aim for early in their education.
“Two years ago we didn’t have a team focused on data analytics,” says Lundgren. “But now we do. We’re looking at how to influence and understand consumer behavior, increasing propensity to purchase in store.” But what about recruitment? His answer is: careful investment. “We’ve selected a relatively small number of universities that we target, and then spend a lot of time on those campuses.”
What’s interesting to Lundren is that while there’s a need to recruit technologists, “you’re never going to stop needing a merchant’s skills. You still need to know how to sell, how to ask for the right things for your customer. It’s part instinct, but also something that can be learned.”
James Rhee, executive chairman and CEO of Ashley Stewart, seems to come at it from another direction. Privately owned, Ashley Stewart sells clothes for plus-size women, but when he came to it, he saw that clothes weren’t what makes his brand successful – it’s how people feel. “At its best, the brand made women have very high esteem. It’s tied to church and community. So how to bring this into a corporate culture that had lost sight of loyalty and friendship?”
The answer: focus on the internal culture to transform both the business and its employee base. Rather than give sales figures as KPIs, he put happiness and community at the core.
“The minute our employees felt safe, we became a leader in innovation. Until there’s trust, none of it matters,” Rhee says. And this sense of loyalty carries over to the customers. He’s happy for customers to shop elsewhere, because with their loyalty as a given, Ashley Stewart creates an ecosystem where the shopper can find the best deal possible.
“And the way you measure that is by building a marketplace,” he adds. “Because our customers trust us, we can talk to them about movies and lifestyle too…so for our business model we took the relationships and the loyalty and friendship and used them as pillars to support the business while we rebuilt it.”
In building loyalty, says Rhee, transparency is key. “As a big company, you can’t hide any more. Customers ask: ‘Do you embody the values we agree with? Where do you get stuff from? Is it responsibly sourced?’ Consumers make judgements based on that. It runs on oxymorons of course, because they expect competitive prices too.”
This tension between product, pricing, and sourcing is an unavoidable fact in retail. “Every day in the company I stress values. When you have good values you attract great people. Both as candidates and with customers.”
For more digital strategies for retailers, see NRF 2017 Keynote Crib Sheet: Look For The Future In Your Failures.Comments