Over the past couple of years, retail has seen many impactful industry shifts. Customers now expect much faster, smoother, and personalized shopping experiences as a hangover from the rise of e-commerce during the COVID-19 pandemic. And global issues like ongoing supply chain disruption, skyrocketing inflation, and the growing cost-of-living crisis have put pressures on retailers to lower prices, cut business costs, and boost customer loyalty. But retailers now have another pressing issue to contend with – employee engagement and retention.
The Crisis Among Retail Staff
Retaining retail employees is a constant challenge, with the industry having one of the highest turnover rates globally. There are various reasons for this, including repetitive work, a lack of incentives, and insufficient training. The Great Resignation that immediately followed the pandemic also contributed to rising employee turnover, with many people desiring a role that would allow for more freedom and remote work.
A recent survey found that one in five of the retail work force were considering leaving their company in the next 12 months, with a further 17 percent contemplating abandoning the retail sector altogether. Over a third (37 percent) of workers state that their employee experience is worse now than pre-2020, with many employers reducing or halting training, social activities, and in-person meetings.
In an attempt to retain staff in the face of these changes, retailers are scrambling to offer greater financial reward, with both Aldi and Pret A Manger already increasing the pay of store employees three times in the past year. While money is certainly an important factor given today’s cost-of-living-crisis, the underlying issues that are leaving employees dissatisfied at work cannot be solved by increasing wages.
While technology continues to be deployed across the industry to improve retailers’ bottom lines, this is more often than not implemented without the employee or customer front of mind. But with 53 percent of retail employees in the UK feeling less motivated, 32 percent feeling unhappy, and 31 percent feeling less productive, the industry should be prioritizing tech solutions that have a dual purpose, transforming the experiences of both consumers and store colleagues.
Refreshing Employee Engagement
The key to boosting employee engagement lies in digitizing physical stores and operations. Some of the activities that take the longest manually, such as searching inventory, monitoring shelves, and advising customers on stock location, can be augmented with the real-time data that digitization enables. Internet of Things (IoT) technologies play a pivotal role in this – by equipping the physical store with connected devices, such as Electronic Shelf Labels (ESLs), stock monitoring cameras, sensors, and smart displays, IoT can help to create a human centered physical store.
Armed with real-time shelf monitoring, ultra-precise location tracking, inventory level alerts, and live updates on promotions, employees can streamline their daily processes and focus their time on giving informed assistance to shoppers. For example, in digitized stores, the automation of pricing updates can make the time-consuming process of changing paper tickets obsolete. Employees at Kavanagh’s Belsize Park in London, the UK’s first fully IoT-powered VUSION 360 store, have saved up to two hours a day by utilizing digital pricing displays.
IoT technologies also facilitate seamless communication between employees within the store and across the supply chain, which enables faster stock replenishment, a greater sense of teamwork, and a more positive, stress-free work environment. By automating menial processes with IoT, retail employees can focus on building relationships with customers as well as upskilling and developing their role to create greater workplace satisfaction and team morale, which helps business leaders increase retention and employee loyalty. And a happier and more engaged workforce has positive effects on shoppers too, with customers more likely to return and spend at a store which offers enhanced, personalized in-store experiences.
While the advent of generative AI and ChatGPT has stirred up concern around automation replacing human talent, digital transformation, if implemented effectively, actually has the opportunity to safeguard and create new jobs within the retail industry. By optimizing processes with data analytics, retailers can improve profitability, future-proof their business, and offer greater economic security to their employees in a challenging economic climate.
In addition, by using IoT technology to create a more sustainable, decentralized retail model, physical stores may become local fulfilment centers for online orders, forming ‘phygital’ spaces that could one day fulfil over 50 percent of total online retail sales. This ‘local ecommerce’ model curbs the need for huge warehouses in centralized locations, instead creating new jobs in packing, shipping, and last-mile delivery within local communities.
By investing in digital transformation and IoT technologies today, retailers can not only turn physical stores into high-value digital assets to benefit their customers, but they can also create more fulfilling and rewarding experiences for employees, helping to develop a more vibrant and resilient retail industry in the years ahead.
The author, Mark Rogers, is the Commercial Director at SES-imagotag.