The Demise of Retail: Snapshot from an HR lens - Part I -

We are back after the summer break, getting into the Fall season; and the Service/Retail world has been pushing - with big bangs - to diffuse what we have been hearing quite a bit about these last months (or years): the closing of stores and banks The Retail Meltdown, the Rise of Amazon and online shopping, the death of Brick and Mortar Store, and yet, the boom of the Food and Beverage industry. The common key factor? It is all about the the Service Industry, so the answer seems simple enough: People, as in customers and employees. But, not so fast! There is nothing simple about the  people-service industry complex, and much less about the retail outlook since not all retail businesses are equal. People can be ambiguous, and the symbiosis between HR and Service Industry workforce is hardly attainable. It would seem obvious that HR plays a major role in the rise and/or fall of the Service industry. The only caveat? It takes awareness.

Or, is it a false perception that HR in Retail appears, as always, to be put on the back burner? True, recruiting is an on-going business, and staff development is constant while remaining within the strict boundaries of the business of the moment, strategy obliging. But again, we discover in the 2017 LinkedIn report  that the Service industry  presents considerable skill gaps, and such includes the Retail business. Ironically - or concerning enough - it also represents a sizable and growing proportion of the US workforce, projected to reach over 75% of the US working population by 2018.

Here is the Big HR Issue in the Service industry: Its Revolving Door.

Job cuts in Retail (2017) are 51% higher than last year (SHRM) . Turnover is of course easily attributed to involuntary departures due to store closing, mergers and acquisitions, downsizing, restructuring, and the like. Nonetheless, the reality is that US Retail turnover varies from 18% at the corporate level to 65% at the store level. (2016 data). When attrition flies high, the concept of 'total ownership' evaporates in thin air: nobody is ever responsible for attrition. It is far too easy to say that in these times of business volatility, where the average tenure is four years, it is often admitted in the Service sector that (high) attrition does happen, and is unavoidable. Nobody seems to be able to put a halt on it. Supervisors attribute high turnover to lack of engagement, many HR managers blame the scarcity of acceptable candidates, and employees refer to compensation.

Misconception of Better Service Delivery Or Conscious Choice for Lesser Quality?

It's all about the bottom line. Factually though,  things come full circle: the business reality of the Service sector links customer consumption - a clear output of satisfaction - to quality of service delivery. According to this Cornell research study a higher perception of the value of the product - in this case service delivery - impacts customer satisfaction. In the case involved, a higher priced menu is perceived as more satisfactory than the same menu offered at a lesser price. Similarly, who does not feel better when the bank teller, the healthcare worker, or the grocery store butcher "knows what he/she is doing", meaning exhibits knowledge, efficiency and an engaging/reassuring attitude?

This MSI (Marketing Science Institute) report demonstrates the correlation between customer  satisfaction - evidently generating repeat business and profits - and employee satisfaction - predictably leading to high turnover - . Better yet: predictive analytics are applicable to turnover and customer satisfaction, and more importantly, that correlation is nonlinear (Estelami and Hurley). Consequently, reducing high turnover is no panacea to decline in customer satisfaction. The key is in preventing high turnover. 

Would it then be a stretch to consider that the abysmal closing of Service businesses is not solely due to the transformation of the Industry?

Stay tuned for the rest of the story...

En Synthèse....  

De toute evidence la disparition progressive des magasins de détail est lié au développement de l' e-commerce. Les boutiques ont aussi du mal à se mettre au pas. Mais tout n' est pas dit. Comme il faut de tout pour faire un monde, les RH ont leur rôle à jouer en la matière; ou  plutôt, ont leur mot à dire, pourvu que l' on prenne conscience du problème...Si problème il y a....
Une chose est certaine: le profil employé du commerce de détail est en mutation dûe à l' automation et l' e- commerce. Les RH doivent se mettre au pas...à plusieurs niveaux...

Bon à Lire sur le Sujet:

A suivre...


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