Retail HR Circle: How will technology disrupt the retail workforce?
Last week I had the pleasure of talking to the HR Retail Circle, and I began by telling them about my retired neighbour Jones, who recently announced that he’s looking into a new career as a Doddle Neighbour. He expects to cover his entire weekly beer and darts expenses by running parcels across our estate!
Jones’ heart-warming entrepreneurial story also personifies the technology revolution which has transformed the retail industry over the last two decades. This revolution is not purely an ecommerce story either – augmented reality fitting rooms, personalised in-store marketing and click and collect are all rapidly becoming part of the everyday physical shopping experience too.
E-commerce and digital innovation have caused headcounts to shrink in some areas of retail, but despite this the sector is still one of the UK’s largest employers, with a workforce of around three million. The reality is that, even with an increasing number of self-service points and automation in stores, vast numbers of people will still be required to advise customers on their purchases.
With such an enormous labour force, it is perhaps surprising that virtually all of the benefits of new technology have so far been focused on the customer and have mostly bypassed frontline staff. Much progress has been made in the fields of browser-based HR systems, in-store tablets and turbo-charged intranets, but by and large the staffroom noticeboard remains the most effective means of reaching the troops.
It’s actually not fair to tease retailers for persisting with legacy technologies (or none at all). With tens of thousands of staff, it was simply not economic to licence traditional enterprise IT products for every individual within the business. However, the arrival of cheaper cloud-based solutions has opened up the market and changed the competitive landscape – large retailers will no longer be able out-invest their smaller rivals in this area as they have previously.
I believe future progress relies on delivering ‘marginal gains’, the concept popularised by British Olympic cycling coach Sir Dave Brailsford. Brailsford is credited with turning the team’s fortunes around, not by introducing big, bold initiatives but rather by making lots of seemingly insignificant improvements such as shaving a few grams off the weight of a bike.
Applied to retail, forward-thinking companies are waking up to the fact that globalisation is no longer reliably delivering ever-lower product costs and back office outsourcing opportunities to maintain company profitability. In the absence of inflation, sales growth has to be earned the old fashioned way – and that’s against a backdrop of falling footfall across many UK high streets. It’s all about squeezing marginal gains from every part of the organisation and, due to historic under-investment in employee engagement, that’s where the greatest opportunities exist.
Some retailers are now exploring how new ways of working can deliver both better sales and job satisfaction on the front line. This means instant, mobile, information flow to create more open cultures and more efficient sharing of information, the ‘gamification’ of sales targets and promotions, and in-store fulfilment technology that allows them to use ‘dead’ time to support web orders.
For example, one of our customers has made its sales promotions more engaging by running friendly competitions between its stores. The aim is to encourage staff to sell more special offer items, with daily results pushed direct to their mobiles in real time and individual and team winners celebrated more widely within the company. This ‘gamification’ of the sales process has already produced some encouraging results, and anecdotal evidence suggests that shaking things up in this way also created a ‘halo effect’ that brought additional benefits to the business.
Beyond achieving this halo effect, I personally believe in productivity enhancing tools for frontline employees for three big reasons. Firstly, the best brands are constantly innovating in terms of bringing new products to market and it’s very hard for the average consumer to keep track of what’s hot and what’s not. Knowledgeable, passionate customer services assistants can add enormous value to the experience of customers who don’t have the time or interest to curate the perfect basket of products entirely on their own.
Secondly, even customers who don’t need help do expect a minimum standard of service in stores – that means properly stocked, cleaned and organised shop floors. It will be a long time until these tasks are automated or eliminated, so we will continue to rely on conscientious staff to take responsibility for these for some time to come (and by reliably, I mean consistently and not just when the regional manager has an inspection booked).
Finally, investing in state of the art tools for workplace improvement is the right thing to do for all of a company’s stakeholders. Higher productivity means higher returns for shareholders and a higher potential distribution of value to labour. And, as we’ve discovered, helping employees to be more productive might just make them happier too.