For businesses that still maintain physical locations, customer experience is everything and the key to an impressive customer experience, is found amongst engaged employees.

The Retail Employee – a Potential Game-changer

For many decades retail stores built business strategies around the 4Ps – place, price, product and promotion. Retailers that found the balance between these four factors were more often than not successful. During the time this business strategy dominated the retail approach, the interaction between employee and customer was largely impersonal and transactional.

Rapid technological development and the emergence of e-commerce and e-tailers not only eroded this strategy, but left many traditional retail employees wondering whether their roles would soon be extinct. A report by McKinsey & Company reveals that while the 4Ps remain foundational to a successful retail strategy, organisations in this sector need to adapt to a data-driven era of differentiation.

The report points out that by utilising data, brick-and-mortar retailers can offer personalised shopping experiences that are a source of sustainable competitive advantage. While technology plays an important role in personalisation, the experience – as delivered by the retail employee – has now become a key element in differentiation.

The human experience, whether it is a friendly face that greets a customer at the counter or someone who makes an effort to help a customer get what they need, is now more important than ever. In a review paper professor Kumar Jain, from the Ecosystem Innovation unit at Jaipur University, points out that knowledgeable retail employees who have benefitted from product and company training, are key to fulfilling the personalisation experience of customers.

Interestingly, although e-commerce has expanded exponentially in the last few years, a study by PwC found that 75% of global consumers crave engagement with a real person when they are shopping. What is more, consumers are willing to pay more for a product or service when they receive excellent customer service.

To capitalise on these opportunities, retailers need an enthused and engaged workforce, but to get to this stage they also need to be cognisant of the challenges their employees face. Unusual working shifts, long hours at work, tackling customer complaints and the ongoing pursuit of sales targets are just some of the factors that make the retail environment stressful for employees. It’s no surprise then that a survey of 3 900 workers found that 45% of employees feel disconnected from their company. Additionally, just 37% of respondents feel company leaders have a vision for how human workers will contribute value in the next five years

This lack of engagement costs the global economy $7 trillion every year.

Improving employee engagement involves improving the entire employee experience at a grassroots level, with associated spin-offs for the customer experience. Although an employer will need to carefully review several factors when they execute a successful engagement strategy within their growing retail organisation, the result is worth it: effective, enthusiastic talent.

Here is why an employee engagement strategy is essential for retail.

Forming a Healthy Culture

If employees are fully committed to their roles, they will be more productive. This will be the driving force behind a company’s ability to adapt to market demands and satisfy clients consistently.

Companies with a healthy organisational culture that make employee satisfaction a strategic priority provide a vibrant and dynamic working environment. These companies are thinking in the long-term. Yes, investing in employees uses time and resources, but the numbers prove the long-term benefits.

Companies that effectively manage their culture have:

  • Employees who are 89% more likely to recommend their organisation as a great place to work.
  • 63% more successful product launches.
  • The ability to deliver nearly 20% higher returns to shareholders relative to their peers over five years.

Let us dive into the first point above – that a better employee engagement strategy means happier employees who want to work for and with an organisation.

Employee retention is about enticing and motivating staff to stay with a company in the long term. It is about building strong relationships through filling workers with a sense of the following:

  • Accomplishment
  • Pride
  • Mutual respect

This all drives long-term loyalty.

First-rate employee experiences can lead employees to choose to spend their careers with an organisation because it provides them with the best opportunity to grow within the company, and continually improve their wellbeing.

As a result, improving the employee experience should be a strategic priority for every organisation.

Reducing Employee Turnover

You cannot talk about employee retention without mentioning its polar opposite: employee turnover, also known as employee attrition or ‘churn’.

Losing some employees is inevitable, but a company’s turnover rate should be less than 10% if an organisation is aiming to thrive.

How to keep employee turnover low

You would be forgiven for thinking that simply paying employees more will lower a company’s turnover rate, as you will be removing an apparent common source of unhappiness. Unfortunately, the issue is far more complex.

For example, Workopolis conducted a poll to understand why people leave their jobs. The top reasons cited as causes for employees leaving their last place of employment included:

  • Relationship with their boss/manager: 37%
  • A lack of challenging projects: 29%
  • A better opportunity became available: 20%
  • A poor fit with the company culture or their co-workers: 14%

These statistics obliterate common assumptions about salaries being a primary reason for high employee churn rates.

Employees need more than temporary feel-good schemes and a good salary (even when this prompts them to respond positively to a survey) to invest in their work and achieve more for their company.

Finding Purpose and Meaning in Work

Workers are interested in knowing how their contribution to the workplace can drive positive outcomes for the company. This means companies need to allow for certain flexibility to allow for the different work styles of employees – an important element of employee engagement. Workers want to know that they will be given the space to address business challenges or be allowed to use their particular talents to help others. Companies seeking to build engagement must find workplace approaches that allow for this desire to be realised by workers, even if it’s in modest ways.

Collegial Relationships

People are particularly keen on authentic relationships with a manager, who can coach them to the next level. It is these connections that drive employee engagement.

These collegial relationships also inspire a change in the language around the employee experience as illustrated below:


Source: Gallup

The conclusion is clear – with the right employee engagement strategy, the current challenges are entirely under an employer’s control, and they can reduce turnover by 59%.

People and Profit

What does improved service, employee productivity, and employee engagement yield? Higher revenue. Organisations with engaged workers enjoy 22% higher profitability than companies where engagement levels are poor.

The Harvard Business Review reports that the same manager behaviours that drive engagement also drive business results. When an organisation is highly profitable, it means they have invested in employee engagement, which will contribute to sustainably growing profits.

If you’re still not convinced about the value of employee engagement, consider the impact of the Engagement-Profit Chain. This sequence starts with engaged employees setting up a series of events that lead to a chain reaction.

Engaged Employees lead to…

  • higher service, quality, and employee productivity, which leads to…
  • higher customer satisfaction, which leads to…
  • increased sales (from more repeat business and referrals), which leads to…
  • higher levels of profit, which leads to…
  • higher shareholder returns (i.e., share price)

The message in this regard is simple. If you want to drive profitability, keep employee engagement front and centre.

Key Takeaways

By taking the time to invest in a well-considered, comprehensive employee engagement strategy, you will not only improve employee satisfaction and retention, but you will also enjoy increased employee productivity, sales and overall profitability.

Are you looking to find out more about how an employee engagement strategy can drive your business forward? Talk to an employee engagement expert today.