The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — When Stacy Smallwood was a department manager at Neiman Marcus 15 years ago, she spent half her time breaking up fights between store clerks sparring over clients.
“Have you ever been to a nice store and you’re like, ‘dang it, that girl looks really fun and I wish it was her helping me?” said Smallwood, who now operates her own luxury boutique, Hampden, in Charleston, S.C. “But she can’t help you because you got stuck with Roger, and Roger is always pushing stuff on you and you don’t even like his personality.”
This scenario is why Smallwood decided that at Hampden, her store associates wouldn’t earn commissions — they’re paid annual salaries between $35,000 and $50,000, and share monthly bonuses when they hit a common sales target.
Commissions have their place in the retail world. But the high-pressure sales tactics they encourage are one reason consumers are choosing to do their shopping online instead. Too many brands train their staff to prioritise completing the sale above all else. And with the convenience of e-commerce these days, customers may instead want to learn about a pair of shoes from a knowledgeable sales associate, then buy them at home.
That's if they can find a sales associate at all. As online players continue to steal market share from once-bustling stores, retailers have scrambled to cut costs, with customer service often one of the first areas to face the axe.
At many stores, customers are confronted with underpaid, poorly trained staff. Hourly workers at mass-market brands are kept in the dark about basic product information, and can come off as uninformed or even rude. Luxury boutiques silo staff in their departments, and the quest for commission warps many customer interactions.
If they're not getting traffic, they'll cut staffing, but it's a catch-22 — if you don't have the staffing and the traffic comes, it's hard to give good service.
This creates a vicious circle, as shoppers who have negative encounters with sales associates are less likely to return. That in turn leads retailers to cut investments in stores further.
“If they’re not getting traffic, they’ll cut staffing, but it's a catch-22 — if you don't have the staffing and the traffic comes, it's hard to give good service,” said Gabriella Santaniello, founder of A Line Partners, a retail consultancy.
To win back customers and boost store traffic, retailers must go back to the basics of customer service, starting with creating an efficient and motivated team of in-store associates. Even with a leaner brick-and-mortar budget, it’s possible to cultivate a smart, engaged staff.
Be generous with incentives
To offer excellent customer service, first retailers must find the right sales associates. That’s easier said than done in today’s tight labour market. The US unemployment rate for retail workers is 3.5 percent, the lowest since the US Labor Department began tracking the number in 2000.
To attract talent, companies can start by offering superior wages, health and retirement benefits, plus incentives like paid time off and tuition reimbursement. Hiring managers must also be aggressive to find the right talent, which could mean poaching the best associates from rivals, said Ray Riley, co-CEO of Progress Retail, a firm that teaches customer service tactics to retailers.
“Typically the best retail workers are already employed, so getting out there and finding talent is an essential part of any good store manager,” he said.
[If] I make you feel really good about the purchase that you've made, you're going to come back and even look for me.
Improved sales from a happier workforce and lower turnover can make up the cost of higher pay. Low morale contributes to bad service — and one negative interaction is enough to keep a shopper away forever, said Art Suriano, a retail customer service consultant,
“If I’m working in a store and you come in and I make you feel really good about the purchase that you’ve made, you’re going to come back and even look for me,” he said.
Wholesaler Costco for instance is famous for its generous benefits — up to seven weeks of paid holiday, according to Glassdoor surveys — and high wages: the average hourly wage for employees is $23, according to Business Insider. The result? An upbeat staff, and a share price that has risen steadily over the last five years, even as many competitors faltered.
Rethink commission structure
The question of commission versus salary is trickier. Smallwood credits her motivated — fully salaried — staff for Hampden’s 30 percent brick-and-mortar sales growth in the last year.
“I invest in them because they're investing in me and my company and my brands, and then in turn that will come out in the customer service that they give their clients,” Smallwood said.
Smallwood argues that when employees are driven by sales, they miss the opportunity to genuinely help customers.
When you have to sell a certain amount to be able to eat, certain behaviours that are not favourable often follow.
A number of new stores in fact are moving away from making sales at all, instead acting as showrooms and driving sales online. Some have even stopped carrying inventory, such as the Nordstrom Local concept, where customers can pick up and try on their online orders and enjoy on-site tailoring.
Associates on commission could also make snap judgements about shoppers’ spending powers that reflect badly on the retailer.
“If they don’t think you’ll buy anything, they might not even bother greeting you,” said Alysa Teichman, vice president of business development at Ylang 23, a Dallas-based fine jewellery boutique. “When you have to sell a certain amount to be able to eat, certain behaviours that are not favourable often follow.”
Commissions have their pluses; luxury department stores have long used the model in order to maximise sales and employee productivity. The incentive doesn’t need to be scrapped, it just shouldn’t be the primary motivator, Santaniello said.
Associates must know more than the customer
A 2017 survey by Tulip Retail published on RetailDive found that 83 percent of surveyed shoppers believe they’re more knowledgeable than store associates, but 79 percent say being able to engage with knowledgeable store associates is important.
Companies should spend more time educating employees about new products. At Sephora, employees attend training sessions every month, and regularly receive free products to try out.
Elyse Walker, a boutique in Pacific Palisades, Calif., receives 50 to 100 new boxes of garments every week and encourages sales associates to reach out to their clients directly to make personalised recommendations.
Stuff like this is low-hanging fruit.
At Hampden, every purchase order is uploaded onto a company-wide Dropbox, accompanied by photos, and associates meet alongside the entire company every morning to discuss merchandising and other topics. Hampden even subsidises employees’ phone bills so they can stay in touch with their best customers.
“Stuff like this is low-hanging fruit,” said Santaniello. “Buying offices could easily send information to the stores that [sales associates] can download and see the lookbook and understand the product in the stores.”
Offer a career pathway
One of the most effective ways of limiting turnover is to offer a career trajectory beyond walking the store floor, said Riley of Progress Retail. These jobs can range from manager positions to entry roles on the corporate ladder.
Gap, for instance, offers employees a formalised career development ladder with an HR department that prioritises hiring from within. About 18 percent of executives at the vice president level and above started their careers working in stores. This year, Gap hopes to fill 20 percent of corporate entry-level positions with store employees. Starbucks also boasts stories of its baristas becoming store managers and then regional directors.
Canadian retailer Aritzia offers a corporate development programme for its store associates, but its retail leadership will also visit stores to recruit talent on site.
“You can walk around our support office and count so many people in various parts of our business who were former retail employees,” said Pippa Morgan, executive vice president of retail at Aritzia.
Even at the sales level, goals and achievements can motivate employees. At Elyse Walker, entry-level sellers can become “stylists” after they hit a certain sales target. That title comes with a raise, a shopping credit and a spotlight on the website.
Abolish cliched greetings
Walk into just about any store, and chances are you’ll be greeted with “Hello, can I help you find anything specific today?” or “Let me know what I can help you find — we have more sizes in the back.”
“I tell my employees to never say the nasty retail words,” Hampden’s Smallwood said. “You know what [shoppers] will say back: ‘No, I’m good.’”
Why is it that customers feel like they need to tiptoe around associates? That's not working.
Though seemingly harmless, this ubiquitous message today evokes the same non-engaging knee-jerk reflex from shoppers.
“Women know what they want,” said Aritzia’s Morgan. “Why is it that customers feel like they need to tiptoe around associates? That’s not working.”
Store associates should be encouraged to make actual conversation with shoppers. If a woman walks into the store with a stroller and two kids, maybe the initial question is, “Oh, how old are your kids?” Maybe the greeting is “I like your handbag,” or, to out-of-town visitors, “Where are you going to dinner tonight?”
Hampden’s hometown of Charleston, for instance, sees millions of tourists come through every year. So, Smallwood had the idea of providing a small city guide within the shop of associates’ favourite restaurants.
Ultimately, the most compelling customer service is one that offers shoppers a connection — something that, despite initial protest, everyone craves, she added. This means that when hiring for store associates, experience is not the most important factor, it’s warmth and sociability.
"If you can build a relationship with a shopper in the store that saves them the hassle of going through the racks or online, that alone gives them a reason to come in again," said Elyse Walker, of her namesake chain of stores. "We all wake up to 12 emails every morning of what's new. But when you have someone you know who says to you, 'This new Valentino just came, this new high-rise Mother denim just came in, that is a valuable thing."