3 Ways to Improve Retail Employee Performance

Conventional wisdom among many brick and mortar retailers is that labor is a cost of doing business. But conversely, some of the most forward-thinking companies in retail see their employees as an investment— assets that drive sales revenue.

This investment mindset has been shown to improve retail staff performance. By investing in your employees’ careers, they’ll repay you with less turnover, better customer service, and most importantly, increased sales revenue. Here are three ways to improve your retail employee performance and in turn produce tangible results for your company.

1. Educate employees on operations.

There’s no doubt that customer service training is essential for a quality retail staff. However, two recent surveys found that operations training may be just as important. A survey, performed at Borders stores, showed one out of six customers were mistakenly told an item was out of stock when they asked for help. Researchers estimated Borders’ profits would have been 25% higher without these stocking errors.

One way to give your co-workers an excellent sense of how their store runs is to train them in all areas of operation. From checking out customers to ordering inventory and stocking shelves, employees who know how their store works can keep it running smoothly.

2. Decentralize decision making.

Most retailers still maintain a centralized management structure. Retail planning is coordinated and communicated in a clear hierarchy, with lower level employees having limited decision-making power.

By allowing your retail associates more autonomy, you can empower them to make better decisions for their location and give them a sense of ownership in their role. Companies like Trader Joe’s, who allow employees to make inventory decisions for their stores, are more responsive to their customer needs, and more likely to increase satisfaction and sales.

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3. Hire employees with the right attitude.

Instead of primarily focusing on relevant experience or where a candidate went to school, pay close attention to their attitude towards the job and the company.

Nordstroms, consistently regarded as one of the best retailers to work for, simply hires nice people and then trains them how to sell. Likewise, the Disney Institute follows the motto, “Hire for attitude and train for aptitude.” If you have an effective training program, you can teach good people how to be champions for your brand. It isn’t as easy when you hire people that don’t fit your culture.

Focusing on the right inputs is essential to improving employee performance. Short-term sales contests might give you a bump in profits this quarter, but will they decrease turnover? By viewing your labor force as a long-term investment rather than a cost to watch, you can create a virtuous cycle that improves employee performance and your bottom line.