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Retail Talent Management in the Internet Age

 

By Steven Hunt

The retail industry is undergoing massive transformation due the internet.  These changes are significantly changing the nature of frontline retail jobs.  Yet many retail companies continue using talent management methods developed in the “pre-internet” age.  This needs to change.  Here’s why and what needs to happen. 

How is retail changing?

Most growth in retail buying and product delivery is now happening through online media channels such as Amazon.  Stores are becoming an ever-smaller channel for selling and delivering products.  Even though people increasingly buy products through the internet, stores are still proving to be a powerful marketing tool for increasing online sales.  For example, Amazon started opening stores in shopping malls because it spurs greater online shopping for their products.  As retail expert Doug Stephens puts it, “the media has become the store and the store has become the media”. 

The internet is changing the purpose of having retail stores.  Stores used to be places designed to sell and deliver products.  Many retail chains are redesigning stores to be places that entertain, educate and engage customers in a way that sells more products online.  For example, customers may go to a store for things such as:

  • Fashion advice.   Providing customers with a custom clothes fitting and fashion consultation on what clothes to purchase online based on their style preferences and body type.  
  • Fitness activities.  Holding yoga, exercise or dance classes where customers learn about fitness equipment and clothing products available online.  
  • Cooking instruction.   Using demonstration kitchens and conducing classes where customers prepare meals with equipment and ingredients available for purchase online. 

In these examples, store employees are creating a compelling social experience that will attract customers and influence their online shopping behaviors.  This sort of social experience cannot be effectively delivered via the internet because it requires a human connection.  Technology tends to fail when it tries to act like a person.  Machines pretending to be people can even be downright creepy (for example, check out these robots a Japanese hotel is using instead of real humans).   We are happiest when machines act like machines and people act like people.  The purpose of stores is increasingly about providing rich human experiences that cannot be replicated online.  

Retail Artisans

To be effective in the internet age, retail stores must increasingly provide in-store experiences that are extremely engaging, educational and entertaining.   This require a new type of store employee.  Store staff must be highly knowledgeable and enthusiastic about company products and how they are used.  They must be extremely skilled at demonstrating, inspiring, and instructing customers on the value that comes from using company products.  I refer to this new breed of store employee as “retail artisans”. 

Retail artisans have a higher level of expertise than what has historically been required for most frontline retail jobs.  For example, it is one thing to make recommendations to customers about different kinds of yoga equipment and ring up a sale.   It is quite another to teach customers how to do yoga and get them excited about making yoga part of their everyday routine, which in turn leads them to purchase yoga equipment online.   Selling cooking utensils requires far fewer skills than demonstrating how to use the utensils by preparing a meal in front of customers.   It takes both passion and expertise to be an effective retail artisan.  Yet many retail companies continue to use talent management methods that assume frontline jobs require little to no specialized skills.  

What needs to change in retail talent management

Retail companies will not be successful in recruiting, developing and retaining retail artisans if they continue using human capital management practices built around the old retail model of store operations.   In the past, most retail companies emphasized hiring frontline employees based largely on characteristics associated with customer service and reliability.   Companies could quickly teach employees any product specific knowledge required to sell merchandise in the store.   Companies were not looking for product experts, they were looking for customer “service reps”.   Running a successful retail store in the internet age is likely to require changing this staffing profile.  

The qualifications, talents and interests that make a retail artisan are different from those associated with being a retail service rep.   In addition to customer service and reliability, artisans must possess a level of product expertise and/or skill that can impress customers.   Depending on the products being sold, artisans might be professional or semi-professional cooks, athletes, artists, craftspeople, technology specialists, or people with other advanced knowledge and experience in a specialty area.   Companies cannot build a workforce of artisans using human capital management methods that were built to hire and employ service reps working in low skill retail jobs. 

The following are potential changes that retail companies may need to make to their talent management methods to build a workforce of retail artisan. 

Sourcing – finding true artisans.  Artisans possess specialized skills and expertise that most people do not have.   Unlike low skill retail jobs that can be filled by a wide range of people, artisans can only be hired from a relatively narrow population of candidates.  Sourcing qualified artisan candidates may require using recruiting marketing tools that seek out and recruit candidates from specialized websites and communities dedicated to the artisan’s interests or craft. 

Contracting – artisans may not make sense as full time employees.   Depending on the nature of the store, companies may not need artisans on a full-time basis.  Many artisans may also be employed in other jobs related to their craft.   For example, a cookware store may only require a chef on days when they are hosting customer cooking classes.  And the chef might also be working in a restaurant.  Contracting may necessary for employing artisans.  This will require retail companies to implement tools to manage contractor relationships across multiple stores and regions.  

Selecting – artisan qualifications are more extensive and skills based.  Staffing selection methods for low skill service rep retail positions usually focus on assessing behavioral competencies related to customer service and reliability.  Little effort is made to assess “hard skills” since specialized skills are not necessary for these jobs.  In contrast, artisans are hired because they know how to do things other people do not know how to do.    This will require companies to implement new types of staffing assessment tools that can evaluate whether artisans have the level of specialized skills and knowledge needed to be effective in their jobs.

Onboarding -  specialized training.  Artisans are likely to require different onboarding than traditional retail service rep roles.  The company may need to provide the artisan with specialized training on how to demonstrate products the company is promoting.  Since some artisans may be hired primarily for their expertise as opposed to their customer service skills, companies may also have to provide them with more extensive customer service training.   

Scheduling – working when and where they are needed.  Greater flexibility may be required to effectively utilize and retain artisans.  Some companies may only require artisans to be in stores for a short amount of time on any given day (e.g., leading an hour-long fitness class).  Companies may want to schedule artisans so they can work in multiple stores rather than just working in one.  Artisans may also have commitments to other employers who are leveraging their skills.   In such cases, companies will need scheduling tools that support complex schedules that may span across multiple store locations.   

Learning – creating artisan communities.   Most artisans like to exchange ideas and information with other artisans who have similar interests.   Companies may benefit from using social technology platforms to build online communities where artisans located in different stores and regions of the company can gather together to converse and learn from one another.

Managing – supervising employees who know more than their managers.   In traditional retail stores the store manager typically knows more about store products than the frontline employees.   In contrast, it is likely that artisans may know more about company products than their store managers.   Store managers must learn how to manage a workforce where frontline employees are the experts.

Compensation – paying for skills and results.  As artisans gain experience they become more skilled and the value of their work typically increases.  Companies may need to rethink compensation strategies so they reward and retain artisans who achieve higher levels of expertise and performance.  

Career paths – longevity matters.    Artisans in many jobs are acting as coaches, advisors and instructors.  These types of artisans can develop strong customer relationships and reputations in their local market.   When an artisan changes employers their customers may follow them to their new company.   This sort of personal loyalty increases the importance of retaining artisans for multiple years.   Companies will want to think about how compensation strategies and career paths support a more long-term commitment model.   Because artisans are product specialists who may have unique insight into market trends and customer reactions, companies may also want to create paths for experienced artisans to transfer into more high skill strategic jobs within the company.  

It is difficult to predict exactly what the future of retail will look like.   But current trends suggest that future retail stories will be far more about providing compelling customer experiences. This will require more retail artisans and fewer customer service reps.   These new retail staffing models will also require new types of retail talent management.

    About the author

    Steven T. Hunt, Ph.D., SPHR

    Senior Vice President, Human Capital Management Research

    Dr. Steven Hunt's role at SAP SuccessFactors is focused on guiding the development and implementation of technology-enabled solutions to maximize workforce engagement and productivity.