Connecting the online and in-store environments to spark growth

Retail expert, Jean Pierre Lacroix, shares his views on the future of retail and the opportunities available to merchants to enhance the experience they offer // By Mario Toneguzzi

The importance of retail staffing has emerged in these times as a new, and increasingly more important, trend in the store’s future.

Jean-Pierre Lacroix, President and Founder of Shikatani Lacroix Design (SLD), says engaging with front-line associates has never been more important, with turnover costing retailers between 50 per cent to 400 per cent of their annual salary to replace.

“Retailers are challenged to fit into the new normal as they struggle to balance operating costs and supply chain disruptions with a shortage of skilled workers,” he says. “The only way to reopen stores and drive an increase in sales is to shift from prioritizing the customer to focusing on supporting the front-line associates. The critical challenge is making the front-line job more exciting and engaging while finding ways to offer more fulfilling careers since retailers cannot compete on wages. The high staff turnover rate has led many employees to misunderstand their brand. Ultimately, there is a disconnect between what executives thought was relevant versus how employees felt. For example, Starbucks executives shifted how they hire and train to make safety a higher priority and spend more time in the field to ensure they create the right experience for their associates. Like so many retailers, Starbucks’ ongoing corporate thinking was written well before the pandemic but needed to shift to reflect the new employee reality and recruitment dynamics.”

Integrated experience

SLD has been around for 32 years and is a specialist in brand transformations for retailers.

Despite its recent challenges through the pandemic, Lacroix describes the retail industry today as extremely healthy. However, the health will be predicated on ensuring that the retail experiences are relevant to the customers. There has to be a higher integration of the physical and the digital as part of that experience - to deliver a seamless experience customers are looking for and expecting from retailers today.

“They’re going to have to retool their staffing model so that these front-end employees provide advice and knowledge,” he says. “Retail staff have got to be far more knowledgeable because the customers are coming into the stores and have done research online. Customers should be able to bring that knowledge from online and integrate it with the store when they come in - through a bar code or through some kind of technology. A lack of integration between the online and physical environments is causing the biggest gaps in retailers’ digital transformation efforts.”

In-store opportunities

Lacroix says online remains less profitable for retailers. So, the physical store remains the place to grow market share, for consumers to see new offerings a retailer may have, and to build a positive platform for the customer to build that brand loyalty.

“Retail’s not going away,” he asserts. “There’s going to be fewer stores. There’s no doubt about it. Specifically in the US. The US market remains over-stored, significantly over-stored. But we aren’t so overstored in Canada because of our geographical distances. As a result, in the US, we’ll see a re-sizing of the channel strategy for retailers.”

The retail expert believes retailers in the future are also going to look at different store formats for the same brand. For example, an urban concept will look quite different than a suburban or rural concept, appealing to a different consumer base and profile. He calls them “persona-targeted’ retail formats that target the store’s trading area and the customer profile, tying into the offering and the experience. Lacroix says that, as a result, securing talent and getting staffing right will become much more critical for retailers and brands going forward.

“There’s going to be a big transformation there,” he suggests. “This is across all industries. Most companies have invested heavily in digital transformation, including automation, back of house, cloud base, AI, and ecommerce. All of that heavy lifting happened pre-COVID and continued throughout the pandemic. What didn’t happen is investment in retooling the employees and the role the employee plays in a new store concept. And so, you’re going to see a triage of roles. A lot of the low value, high friction parts of the customer journey - payment, finding out if the inventory is in the store, all of these things that you’d traditionally need to talk to a clerk about - is going to go away. Technology is going to eliminate all of that. It’s going to allow the employee to provide the key advice and relationship building elements of the customer journey that are critical to them. Points of view. Advice. Insights. Personalization of information. Follow up customer service. Removing anxiety points which only humans can do. These aspects of service will play a more important role.”

Training rethink

To execute on this vision, however, retail staff will need to be trained differently. Currently, most retail employees are trained to stock shelves and answer operational questions. Lacroix believes that brands that will succeed in retail are brands that will empower and train their employees differently to build those relationships and provide that advice for customers.

One of the major challenges facing retailers today, as well as some other industries, is finding people to work for them. It’s a huge problem and it’s only going to get tougher because the role of a front-line employee in retail is basically a temporary job, a part-time job. A very small percentage of people working in retail see it as a career.

“So, the industry has to put a lot more effort into the recruiting and retention of their employees and demonstrate that a career, at Walmart for example, is a career that has progression opportunities that allow for evolution and growth within the organization, and show them that they don’t need to be a clerk for the rest of their life,” he says. “I believe the industry has done a poor job there. And that’s part of the reason they’re struggling to find employees and, more importantly, talented employees. They’ve got to be ready to reward those individuals. However, many retailers unfortunately view labour as a cost. The moment they start to think of labour as a growth marketing vehicle, I believe they will rethink their current investment in their people. That’s the big mindset shift that retailers need to undergo. Those frontline staff, they’re not overhead. They’re marketing. They’re part of a potential growth engine.”

The role of technology

Moving forward, the role of technology in retail will be to eliminate low value or friction points. When you think of a customer shopping experience, there are key friction points that technology can eliminate. For example, lineups to complete a purchase. It’s the biggest killer of relationships.

Most consumers coming to a store have done their research and homework. That information should also be real time at the shelf level.

“Low value, transactional services are going to be replaced by technology,” says Lacroix.

When it comes to technology, in recent years it’s manifested itself into all things digital as retailers have embraced the ecommerce world. The growth in ecommerce accelerated noticeably during the pandemic. And while sales occuring on digital channels have stabilized as we move out of the critical COVID period, they remain a key component of a retailer’s overall strategy. And going forward, as Lacroix points out, retailers will want to empower their customers with choice, and connecting their growing ecosystems to develop a truly integrated omnichannel experience.

“The idea is to give customers options,” explains Lacroix. “They need to be provided with the ease of navigation to be able to look at what they’re buying, to be able to fill the basket and eliminate the steps of that journey online. But they need to be given options as well so they can choose where they collect their product. Give them those options so that they are in control of their own journey. And then link that experience to the store. There’s currently what I refer to as a broken loop. Retailers have done a phenomenal job of digitally transforming their offering on mobile and online from a back-of-house perspective. But there remains a gap in connecting those things to the store experience.”