How employee-focused innovation drives prosperous retail environments

Guest Contributor
Mon, 01 Aug 2016 14:56:38 +0000
Technology, advertising, hr, human resources, innovation, marketing, retail, roi, workforce

In the US, 5 million retail employees roam the sales floor – in the country’s most common job role – with the primary goal of aiding customers and driving sales. But, while customers have a whole range of digital treats to keep them interested, for employees it is a whole different story.

Walk into any store and you’ll see beacon navigation, with apps connecting to your phone, an increasing number of VR tools and online loyalty schemes. Meanwhile, the sales staff are tapping at almost prehistoric cash registers and clocking off on handwritten time sheets.

Businesses that use technology to support employees protect their biggest investment, and have been seen to improve employee satisfaction and ROI. Companies such as Apple lead the way with tools and support to inspire their workers. Here’s how employee focused innovation can drive prosperous retail environments.

The Employee As An Asset

In retail, employees are one of the biggest financial investments. Bain & Company report that over half the retailer’s “selling, general and administrative budgets” is spent on labor costs. This cost of staffing is more than just the base salary package. According to CNN, when you layer additional taxes and benefits this is typically 18-26% higher, and for large chains it can be significantly more.

What’s more, the retail industry is notorious for high turnover. Bloomberg has estimated in a year this is 60 percent. Adding the cost of “hiring, onboarding, and lost productivity and staff motivation”, Deloitte’s HR wizard Josh Bersin claims this can actually cost a business 1.5 – 2 times the annual salary of that individual.

With unemployment in the US at an all-time low, after the darker days of the Great Recession, companies know they need to do more to engage their teams. So, what are the biggest retail giants doing? In the largest stores, such as Wal-Mart, TJX and Gap they have responded by raising salaries. But increasing employee remuneration is just part of the solution and this eats into company margins. Coupled with smart tools and better processes, powered by new tech, a more qualified associate can be even more effective. Advanced digital and mobile tools will speed up task execution and improve the employee’s overall experience at work.

Research shows that when employees have the right tools they are proactive and efficient, particularly in the retail environment. Experticity claims that empowered employees sell 87 percent more on the sales floor. So, how are these successful businesses wielding new tech on the inside to drive profitability and ROI on the salesfloor?

Wearable Technology To Empower Retail Employees

Apple has become iconic in the retail space, employee retention is higher (81% in 2015), and each new opening is met with great applicant demand. Those who make it through the selection process, not only receive the iconic blue T-shirt, but also access to Apple’s secret collection of employee-only apps. According to Business Insider, this includes the Daily Download, an internal newspaper for employees, updating them with company news, a selection of games, testing apps, device bug logging apps, expense tools and more. Apple employees armed with mobile devices are free to roam the sales floor, rather than being restricted to service checkouts.

The Container Store, a familiar face in Fortune Magazine’s “100 Best Companies to Work For”, has taken mobile to a new level, equipping its salesforce with wearable tech set to aid employee communications across the huge store locations of 25,000 feet or more. The hands-free Theatro Wearable Computer, as reported by CIO, uses Wi-Fi networks and basic voice commands to control the devices, make customer announcements, check inventory, speak to and find coworkers, and log on and off shift.

After conducting trials in its Austin outlet, The Container Store reported the number of messages heard per employee when using the tech dropped by 60 percent, showing a huge jump in efficiency, and a reduction in overall noise, meaning employees were less likely to take the earpiece out. The Container Store plans for the wearable to be rolled out to all employees, in place of the traditional walkie talkies, by the end of this year.

Big Data Analytics Drive ROI

In-store analytics software like RetailNext, used by top stores including Bloomingdales, display insights such as traffic, sales and shopper yield. Customized store logins and POS integrations, give workers instant access to tailored analytics that replace manual calculations, and provide an overview on company performance. Other sales tools such as Hoopla enable live interactive performance updates against goals, giving recognition to top performers, using data to inspire teams.

Software like this provides hard statistics; showing the busiest time of day, weekly trends, inventory levels and more. This means businesses can automate stock checks and ordering, identify strong performers, and use identified trends to create smart schedules.

Scheduling systems let retailers forecast staffing requirements and save on payroll, based on real-time sales data. McKinsey&Company claims activity-based scheduling and budgets can actually cut store labor costs by up to 12 percent.

Last year in New York, 13 of the biggest retailers came under the spotlight through their misuse of on-call scheduling systems. Brands such as Target and Gap were accused of using these tools to adapt schedules with little notice, often cancelling shifts meaning employees will not get paid. This high level of risk, using tactics such as the hugely controversial “zero hour contract” does not make use of the big data and forecasting potential that these platforms can provide.

Wireless Vision, the T-Mobile premium retailer, used Workplace System’s “Workplace Mobile” app to let managers and employees collaborate on creating work schedules, in efforts to quash erratic scheduling. After a 18 month period in-store sale conversion rate rose from 4% to 11%, and employee happy ratings went from 65% to 95%.

HR Tools Connect With Retail Employees

Following $2 billion in investment in HR tech in 2015, Josh Bersin predicted that a rise of new tools “for recruitment, performance management, learning, wellness, feedback and employee engagement” is set to disrupt traditional HR. New cloud-based solutions and mobile apps connect employees in many industries, and will do the same for retail.

The Container Store uses Ultimate software to provide a payroll and benefits solution for its rapidly expanding employee base, and has chosen to operate with no HR department. The tool allows staff to use the web-based self-serve tool to improve communications, with real-time access to basic administrative data, giving them power to manage their own payments and records.

The Container Store’s decision to use self-serve tools, where employees are put in the driving seat over hiring HR teams, represents a shift in HR. Forbes contributor Jeanne Meister reported that new social and mobile platforms reveal a trend in the“consumerization of HR,” applying consumer practices to the employee experience.

Airbnb, Glassdoor’s best U.S. company to work for in 2015 has no HR team, instead it has an “employee experience group”, opting for tools such as CultureAmp to improve the workplace culture. The software provides employee surveys and enables feedback with data-driven insights to enable companies to improve their HR experience.

Technology such as this provides a channel for employees, an anonymous voice with bottom-up conversations, and a personalized profile for customizable training and HR processes.

As Amazon drones take to the skies to deliver online shopping, and customer-service chat bots tend to shopper needs we see once futuristic concepts changing the entire consumer experience. Behind the scenes a handful of companies are applying this same innovation to internal processes, designed to transform the employee experience.

By giving better tools to salespeople on the shop floor, they have the power to make informed decisions in faster times. Improved transparency, using data and analytics can help employees understand their place in the company, and to take ownership of the processes that impact their jobs. As we see more companies adopt these tools, driving improved ROI and retention, soon employees will come to expect the same level of tech innovation provided to the consumer.

Joe Saumweber is the CEO of RevUnit, the leading B2B digital product development agency.