As retailers jump on the omnichannel bandwagon and implement initiatives such as ordering online in-store and outfit their stores to understand new performance metrics such as customer flow conversion, the question around the water cooler (or Nespresso machine) is, “How do we measure associate success?”
The question has come to the forefront for three main reasons:
- As the industry moves away from measuring store success and brand engagement solely on sales and margin, how can it simply measure associate success based on the same antiquated metrics? Some brands even have non-sales initiatives – like community exercise classes- they implement as part of their engagement with shoppers, so how do we measure success if we are only looking at sales?
- In addition, knowing that stores are here to stay, associates have become an increasingly important part of communicating the brand vision and ethos, as well as providing experiences, both of which do not always translate directly to sales. With this comes a larger investment in associate education, technology and tools, meaning it’s crucial to accurately measure success not just for the people signing the checks, but so the associate knows how to be successful and ultimately choose to stay and grow within the brand.
- Lastly, the investment in new employees can be very costly. With retail turnover rates averaging about 5 percent a month/60 percent annually, and a Center for American Progress (CAP) study statistic stating it costs, on average, $3,328 to find, hire and train a replacement for a $10 per hour retail employee, what’s the math come to for your store(s)?
Aside from costs, a study by Professor Marshall Fisher of The Wharton School of the University of Pennsylvania and Expertcity found that engaged, educated associates delivered 69% more sales than their less-than-enthused counterparts.
Below are some new ways retailers can look at employee performance:
Yes I know I just said sales was so … yesterday. However, what should also be layered in is sales associates’ generation of online orders as well. Some retailers give attribution for online sales initiated in stores to the online division, and the associate doesn’t get recognition. Sales isn’t going away as an important metric, so the measurement needs to capture the entire picture.
Interactions and Duration
Using full path analysis and chipping employees with tiny Bluetooth sensors, we are able to understand the number of associate/shopper interactions, their duration and where they occur in the store. Being able to set interaction goals and layer in the duration (otherwise the store greeter will always be #1) of interactions as a secondary metric provides more color to how associates are engaging with customers than sales can alone. It also allows more targeted coaching: are they not making sales goals because they need coaching on how to close the sale, or do they need coaching on approaching customers in the first place? Maybe they tend to interact the most in shoes, but could try walking customers to the apparel section more.
Guiding Customers into the Fitting Room
There is a positive correlation between getting customers to try on product and conversion – I’ve seen positive correlations as high as 0.7. Of course, this is not as easy as simply measuring fitting room use and subsequent daily conversion rate. On the subject of fitting room utilization, I have two preliminary ideas:
- Track employees walking customers to a fitting room, or interacting with a customer and then “starting a fitting room” for the customer while she continues to shop the store.
- If you take the RFID plunge that is being bantered about in the retail hallways, precision gets even better. You can then see the items entering the fitting room and which ones are converting. On top of that, you can rate employees on the conversion rate of articles they bring for the customer to try in addition to what the customer picked out initially. We all know once the customer puts their clothes back on they are reticent to go back into the fitting room, so this is a useful thing to look at.
Cutting-Edge Technology & Experiences (aka Did You Waste Your Money?)
Retailers are clambering to put in the newest, coolest technology in stores, and offer services and experiences in attempts to “wow” the customer. Measuring associates’ use and engagement is not only an important metric for them, but can also clue you in on whether it was a sound investment in the first place. This varies by retailer initiative, but here are some common extras to look at:
- Measure how many customers an associate can get to sign up for a run group. You invested in the coach and the free drinks, but are your employees helping you reach out to customers? If they are and no one is signing up, either Marketing needs to work harder, or perhaps a new initiative should be tested.
- Are sales associates helping consumers start sessions on that fancy touch screen you just invested (likely way too much) in? How many sessions? Did the customer touch the screen once and walk away or did the associate manage to get them to engage? A lot of sessions with low duration across associates in several stores could actually point to a content opportunity or an unsound investment, both added insights.
- Measure MPOS use. If shoppers are not getting rung up using MPOS devices and there is constantly a long queue at the main POS, it’s a red flag that associates need training on it, or want to get more customer sales but don’t want to take the time to close the sale lest they miss out on another new customer. If no one is using it and queues aren’t long, perhaps it wasn’t the right investment to make in the first place.
In closing, as associates need to be propelled from simply a person garnering as much sales as possible to a brand ambassador in this new omnichannel world, they need to be armed with a clear vision of what constitutes success, and receive tailored coaching to get there.
I’m aware I did not answer questions like, “What is a good interaction number?” or “How do I implement these new KPI’s without making the employee feel like we are Big Brother?” Both great questions, and fodder for my next blog post. In the meantime, if you have suggestions of your own, questions or just want to share experiences, please use the Comments section, below, or reach out to me via Twitter @Lauren_isRockin.
It’s a brand new retail world and I want to hear what my fellow first explorers are finding.
Join the #retail #inspiringretail and #SmartStore conversations on Twitter @Lauren_isRockin & @RetailNext, as well as at www.facebook.com/retailnext.