A zero-sum game in retail?

by Graeme Anderson | People Insights Partner

Nov 12, 2020

Have retailers forgotten the power of culture and people?

It’s a big question, and not an easy one to answer. For years retailers seem to have put margins and profit per square metre ahead of culture and people. Yet the reality is that profits come to those who deliver great service through great people.

Often that means going back to basics, and considering what the customer really wants. But if retailers continue to have conflicting motivations, prioritising margins over experience, retail will remain a zero-sum game.

So what needs to change, and where does it start?

The true driving force

The corporate culture of many traditional retail businesses has become the catalyst for soulless environments.

By culture, I mean the conduct and behaviour of everyone involved in an organisation. How they work towards shared objectives. How the business behaves, acts and decides.

Retail is a service-led industry, and any service-led industry surely lives and dies by the quality of its interactions with customers. Yet few retailers create an environment that allows the people who work in stores to thrive in their roles.

Most have forgotten just how important the employees who actually deliver the customer experience are, but that is where the focus should be.

“Any service-led industry surely lives and dies by the quality of its interactions with customers.”

It’s a simple formula that has long been understood: engaged employees mean happy customers, which means sustainable business.

Of course, there are more components to a successful business, but putting employees front and centre is a strategic choice that must be made in the mission to deliver great customer service.

The bigger picture

Let’s take a step back for a moment and consider how that lack of focus on people, combined with poor workplace culture, is affecting the economy in general.

Trust is the most important ingredient in any relationship. Do we trust a person or a company’s character? Do we trust their competence to deliver a great product or service?

This seems to be missing from the current physical retail landscape, and may be one of the reasons for its decline. Even before the pandemic, the UK trailed behind other major European economies in productivity metrics, with only 8% of employees actively engaged at work.

On average, employees spend about a third of their time at work. Unfortunately, we see lots of people who don’t want to be there, yet turn up every day to pay the bills.

Surely retailers can offer more than this.

Imagine a world where everyone does a job they enjoy, and wants to show up to work every morning. Can you imagine the service they would provide to their customers? And what this would do for your brand?

This is not the reality for most, but there are some great companies already achieving this, and they are adding much more value to people’s lives than simple financial compensation.

So, what can be done?

Ultimately, the essence of work is solving other people’s problems. The biggest and the smallest companies, from the start-up innovators to the giants of the tech world, are solving other people’s problems and adding value to their lives.

The best companies are the ones who serve the most people.

“Imagine a world where everyone does a job they enjoy, and feels compelled to show up to work every morning.”

We are on the cusp of the fourth industrial revolution. This is a significant shift in society, as we embrace the use of data and machines. Why? Because humans make mistakes, we’re fallible, and machines can perform certain tasks much better than we can.

This will create opportunities for people to do the jobs that humans should be doing , including providing exceptional experiences to other human beings.

From a retail perspective, we believe that this exceptional experience is what’s missing, and we feel a responsibility to make a positive change that impacts the world.

That is why we focus on our people. And why our philosophy is to create a culture that allows them to truly thrive.

A winning culture

Creating a winning culture isn’t easy, especially when there are so many competing demands in business.

But it’s also not a distant, magical aspiration. It’s a science that can be implemented by those who truly believe in it.

Our approach begins with a compelling purpose that captures the imaginations of those who work for the business, and of those we do business with.

This is followed by a clear strategy for creating a strong employee experience, staying conscious of the culture, the physical and online spaces we operate in, and the technology that we use to get the job done.

Our approach is also grounded in proven psychological research. We work to understand who we are and how we impact those around us. We know that human beings have basic psychological needs that must be satisfied, and we have a moral duty to fulfil these needs in the workplace.

As I mentioned earlier, I believe any service-led industry needs to have a strong, strategic plan for harnessing its most important asset: its people. We do this because we know that if we get it right, then the service we provide to our brand partners and to visitors in our venues will become part of our brand identity.

Consumers will come back to us, and recommend us to their friends and family for generations to come.

Business is more competitive than ever under today’s challenging conditions and while others can replicate, refine or tweak your business model, they can never reproduce a unique winning culture.

Learn more about the disconnect between brands and retailers, and the radical new approach brands are taking to overcome it, in our report, Retail: The Quantum Shift.