Survey: Retail winners understand the importance of store associates

Retailers who outperform their peers are more likely to see a link between customer-facing employees and sales performance.

According to “The New Retail Model: Becoming Agile and Efficient,” a new retailer survey from RSR Research sponsored by Workday, retail “winners” with comparable store/channel sales growth above the industry average of 4.5% place a higher value on their customer-facing employees. Data shows that retail winners also have better insight into their workforce’s skills and capabilities, and are more likely to have seamless processes that drive their enterprise’s processes from conception through execution.

For example, 75% of winners and 60% of other respondents said customer-facing employees have strong impact on annual sales. About seven in 10 (69%) winners but only slightly more than half (53%) of other respondents said customer-facing employees will have a strong impact on annual sales within the next three years.

Similar discrepancies between winners and other respondents also existed in responses to whether they have a complete view of their workforce’s skills (63%/35%) or have a seamless process that drives all aspects of the business from planning and approval to business execution (54%/43%).

The discrepancy was less pronounced in the difference between winners (46%) and other respondents (40%) who said customer-facing employees have the information and the training they need to effectively to deliver upon the company’s customer service standards.

The survey also examined retailers’ overall views on store format. Almost all respondents (92%) plan to replace and/or enhance existing stores with new formats. The most commonly used store formats today are large with broad assortment (75%), small with focused, localized assortment (40%), showroom environments to support BOPIS (34%), pop-up stores (30%), dark stores that perform fulfillment only (17%).

When asked which store format is most appealing if they are planning to implement a new format, large with broad assortment was the clear leader (44%). The only other formats with double-digit responses were pop-up stores (13%) and small –with focused, localized assortment (10%).

The survey also asked respondents to list challenges, tools and inhibitors affecting several areas of their business.

Top three business challenges driving retailers to improve store and corporate planning functions
Good employees are hard to attract, train, and retain (58%).
Consumer price sensitivity constrains our margins and discretionary spend (52%).
Direct-to-consumer brands are encroaching on our core market (45%).
Customers are demanding different store experiences than we currently provide (42%).

Tools used to evaluate success of a new format (select all that apply)
Location and real estate analysis (60%).
Data cubes for analysis (53).
Model stores as a baseline (52%).
All Excel, all the time (49%).
Labor modeling tools (48%).
Core financial systems (34%).

Top three organizational inhibitors preventing the business from being more agile
Total cost of ownership of existing technologies hard to quantify, inhibiting change (51%).
Our legacy technologies cannot support modern business agility (43%).
Hard to make organizational changes in response to mergers, acquisitions and other changes to business models (41%).
Cannot automatically update plans based on business execution workflow (41%).

Top three operational challenges preventing you from reacting to changes in business environment
Our planning functions are not well integrated (41%).
Our planning processes are static and siloed, which slows down reaction time (38%).
We have difficulty defining workforce needs to support new business models (30%).

RSR conducted an online survey from January-February 2020 and received answers from 88 qualified retail respondents, 97% of whom are headquartered in the U.S. or U.K.