Wednesday, May 22, 2013

Retail Shot in the Foot

Why is it that for most retail companies the headquarter staff is full-time?

Brick-and-mortar retailing is slowly dying. It's a logical outcome to the way we operate those businesses.

Most of the success of a retail operation occurs on the 'front lines,' in the store. There the staff is mostly part-time. Because they're part-time, they're less empowered and less engaged. They have less product knowledge and less time to gain more knowledge. Therefore, customer service is lacking.

When customer service is lacking, the people with the money are more likely to go for effortless acquisitions, like shopping on-line. When on-line retailers offer 'easy' product returns, the risk of buying on-line decreases.

How can stores compete? They need to engage with the customers who enter the doors. And ensure that they have a great experience. How can they ensure a great experience? By having enthusiastic and engaged associates, who know their stuff, and want to see the customer succeed and thus the business succeed.

Most retailers hire part-timers because they think they can't afford the benefits for full-time employees. They will still have the same full-time equivalents (FTEs) they do now, but the cost of benefits would go up.

Perhaps it's the headquarters staff that should be part-timers and the retail operations should be populated by full-timers where the success of the enterprise resides. Maybe the costs would equilibrate. If not, the investment will most likely pay for itself in higher returns. The front-line should be the desired career path, not the back office, as it is now.

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