Rethinking the Retail Labor Market

The COVID-19 pandemic has rewritten the rules of retail from top to bottom. It’s changed customer expectations for cleanliness and safety while shopping instore. It’s changed consumer expectations for service quality and support while shopping online. It’s disrupted the entire supply chain, from manufacturing through distribution to delivery. Now, it’s thrown the traditional retail labor model out the window.

To be fair, retailers have been having trouble finding employees for months now, though the immense importance of the holiday shopping season has magnified the problem. However, it’s the fact that the labor shortage has persisted beyond most unemployment benefits and other pandemic support programs that has many wondering where all the workers went, and how to respond to the new realities of the retail labor market.

Back to Basics

Retail positions are often seen as low-value jobs meant for unskilled laborers and youngsters just entering the workforce. However, as many retailers are starting to discover, the opposite is proving to be true. Thanks to COVID layoffs and resignations, the once-disposable sales associate living with unpredictable schedules and low wages no longer feels forced to work jobs that offer no serious opportunities for advancement in either their careers or their life. Indeed, it sometimes feels like the idea of higher retail wages is considered heretical among retail management.

Nevertheless, compensation for services IS the fundamental agreement that forms most employee/employer relationships, and better compensation leads to more and better applicants, as well as retention. There’s a reason why giant retailers like Target, Walmart, and even Amazon are all offering better wages, hiring bonuses, or shift premiums to attract new applicants. Many now also include education benefits for employees as well. Should the shortage carry on it’s entirely possible that retailers and the public are going to have to accept including higher wages in their calculations when it comes to prices, profit margins, and purchasing decisions.

Consider Corporate Culture

Although compensation plays a significant role, retail workers are also increasingly interested in other less-tangible benefits. Consistent scheduling, reliable hours, and employee engagement can have significant positive outcomes for retailers both in terms of volume and quality of candidates as well as return on investment. Although it may run contrary to conventional thinking, retailers who commit to consistent scheduling while providing employees with flexibility and feedback options retain more employees who provide better customer experiences, which in turn translates into sales.

In fact, research from the Harvard Business Review shows that famous clothier The Gap earned an estimated $2.9 million in sales just from stabilizing scheduling for employees, with an out-of-pocket expense of just $31,200 to change store scheduling policies.

The kinds of corporate cultures that attract and retain top talent don’t end their employee considerations with scheduling though. They’re considerate of their employees while on the floor as well, meaning they provide the proper equipment and environment to get their jobs done. What’s great is that the upcoming generations’ affinity for technology makes it easier to bring powerful new technologies into your store that employees can leverage. Virtual sales tools and customer service options like Salesfloor Virtual Selling can be integrated into your online stores to allow customers to connect directly to sales staff. By providing staff with exceptional tools to leverage next generation skills using the latest technology, you provide a better online customer service experience while keeping your workplace engaged and productive.

The Gig Economy

Thanks to apps like Uber, Lyft, Skip the Dishes, and other similar services, the so-called “gig” economy has expanded well-beyond entertainers and freelancers to include rideshares, food and grocery delivery, and even maintenance/trades work. Unsurprisingly, retail workers are also picking up on the opportunities gig work represents. As of 2018, Gallup estimated up to 36% of the US workforce didn’t just work in the gig economy but preferred it to traditional employment. Workers who were once forced into static part-time schedules now have easy options to work when, where, for long and for whom they choose.

As a result, retail hiring and labor models must adapt. For example, retail giant Target acquired the delivery app Shipt back in 2018, using it to power gig delivery of products. They’ve also invested heavily in an employee self-scheduling app that allows workers to swap and reschedule shifts on their own, reducing the strain on management to review and approve shift changes while providing employees with additional scheduling flexibility they desire.

The Robots Aren't Coming

It might surprise some that there’s been no mention of additional automation or even robots on this list, but that was intentional. Make no mistake, automating tasks and robotic workers will no doubt continue to disrupt retail as a whole but face-to-face interactions and live service continue to be the mainstay of the customer experience. Simple, straightforward tasks such as store cleaning and warehouse order picking will almost certainly continue to be outsourced to robots, but when it comes to on-the-floor selling and customer service, people still prefer to interact with people. The role of, and necessity for, living flesh-and-blood associates won’t be going away, at least not any time soon.

As the COVID-19 pandemic has demonstrated, technology is by no means the only factor that can dramatically alter the retail landscape. Although it is at least partly responsible for the current labor shortage, it has also provided great opportunities for companies to invest in considerate scheduling practices and technologies that provide employees with autonomy and flexibility. After all, retailers that are able to attract and retain the best talent are also those that can boast about having the best results. 

Empowering Associates is Salesfloor's Raison D'être

At Salesfloor, we understand the true value that retail associates bring to the customer experience with a brand. Our platform equips them with the tools to help them make more sales and provide excellent customer service whenever and wherever people are shopping. Let us show you how we can help empower your associates and make their work more fulfilling, rewarding, and meaningful for everyone.