The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

The Retail Labor Force: On The Brink Of Really Big Changes

Membership: Unknown
Status: Unknown
Private: FALSE

The RSR team is in the final stages of developing its latest look on the state of the retail workforce. We’ve been benchmarking retailers’ attitudes about the store workforce since our inception in 2007, and over that space of time we saw very little real change – that is, until the world began emerging from the global pandemic in 2022.

Before 2019, retailers paid a lot of lip service to “our employees are our greatest asset”, but most didn’t really mean it. In 2007, we opined that:

 “Workforce management of hourly and instore employees has always been difficult for retailers. While payroll may be their largest “controllable” expense, managing the specific components of that expense often seems uncontrollable. Even as the tools to manage hourly employees have grown more sophisticated, the business challenges retailers face have remained relatively unchanged: high turnover, highly variable seasonal demands, and the need to keep an iron thumb on labor budgets, all while providing acceptable levels of customer service.”

Compare that to what we found in 2017:

    • Retailers say store employees are what will differentiate the store, but no one wants to train them
    • Call center employees are often cited as retailers’ best salespeople, but retailers don’t believe that giving store employees access to the same level of information would help them catch up.
    • Retailers acknowledge that customer engagement is getting more complex, and spread across many more touchpoints than ever before, but … certainly don’t trust or value elevating the role of the front-line employee in creating customer engagement.

But then in 2020, two things happened; first, COVID hit and that caused consumers to accelerate the adoption of omnichannel shopping (or as one advisory clients calls it, the ‘phygital’ retail environment), and secondly, the industry experienced a huge employee turnover while other, perhaps more rewarding jobs became available.

So, in the 2020 benchmark (which was conducted during the height of the pandemic), we concluded that:

“Many retailers had neither invested the funds nor training required for their workforce to meet the challenges 2020 brought at scale. When the COVID-19 pandemic struck the world in March (2020), these trends not only accelerated, but accelerated at warp speed. Many of the employee-rich functions retailers had been ignoring for far too long came home to roost.”

Well, retailers may be conservative and slow to change, but they’re not dumb. By 2022 we were able to measure a significant sea change in employer attitudes about training, compensating, and empowering their store employees with consumer grade mobile techs to give them a fighting chance to give them the same access to information to products and services that consumers take for granted. So, in the 2022 benchmark we were able to say that:

“Today’s shoppers are hyper-informed and expect store employees to be at least as knowledgeable about products and services as they are. Retailers are responding to the challenge… in the last five years, both attitudes and commitment about employee training have changed.”

So, we’re good to go, right?

Not so fast. Retailers getting religion about training and compensation now might be a case of “too little too late”. In the forthcoming benchmark, we note the following:

Comparing the top challenges year-over-year tells us that while the top-3 that retailers identified in 2022 haven’t changed, their emphasis has. In particular, the challenge that “customers are demanding different store experiences than we currently provide” has risen since 2022…

“This causes us to look at the year-over-year changes in another of the business challenges we identified, that “We are unclear about the value of customer engagement top our business model” … this year that response rose… there’s a tacit recognition among some retailers that their shoppers aren’t really interested in engaging with store employees, but rather in completing the shopping journeys that they in all probability began in the digital domain.

“What we can glean from this is that while employee enablement may be on the agenda, so is customer enablement. Neither consumers nor retailers have abandoned the self-service model – consumers just want a self-service experience that uses the same technologies that they use in their everyday lives… Retailers now state that they are challenged by consumers who want more self-serve options. Looking inside this result, we see that this is a particular focus for the largest retailers (in this study, those with over $5B in revenue); 45% of these retailers see this as an operational challenge, compared to 29% of all others.”

There are a lot of pressures on the retail industry that are challenging the traditional store-centric labor model; consumers start their shopping journeys more often than not on their mobile phones, there are new service requirements resulting from those new shopping behaviors, there’s a new generation of potential workers who expect more from a job, societal changes are ushering in a more heterogeneous customer base… and automation is eliminating rote tasks before our very eyes. But most importantly, consumers have moved on from the old retail model – and they have defined what “self-service” means now.

So even after years of examining how retailers manage their workforce, we expect issues surrounding the retail workforce to be in flux for quite a while to come. The industry is on the brink of big changes.

Newsletter Articles May 3, 2023
Related Research