The business of retailing, especially in competitive product categories, can be brutal. You have to buy intelligently, manage scrupulously, and keep costs in line in order to provide more value to your customer. And the margins can still be very tight.
With this formula, personnel are viewed as cost centers, and some of the biggest retailers in the world operate on this premise. Give the employee minimum wage, no benefits, and scant direction. In many cases this makes for poor customer service, unrealized sales opportunities, and needless to say, crummy employee morale. The result is a mediocre customer experience and high employee turnover-but consistently sharp prices. Believe it or not, there are many retail executives who believe they have no other recourse.
The New York Times recently ran an article called “The Good Jobs Strategy,” referring to the work of M.I.T. management professor Zeynep Ton and the book she published with the same title. In researching retail strategies, Ton frequently saw the above formula: low wages, low morale, but also low prices. Often products were not displayed properly or promotions not conducted because employees had a “who cares?” attitude.
But during her studies, Ton came upon a handful of retailers who took a very different view that led her to her distillation of “The Good Jobs Strategy.” Pay employees a decent wage, invest in their training, and give them a sense of empowerment by allowing them to make their own decisions.
Ton spotlighted a 722-store convenience/gas station chain based in Tulsa, OK, called QuikTrip. Employees receive middle-class wages and job cross-training and are allowed to make their own merchandising decisions. As a consequence, shelves are always stocked, promotions are always executed, the customer experience is stellar, and all other operational costs are contained by the employees. Despite low margins, the company enjoys healthy profits.
It doesn’t take a genius to recognize the common sense applications here. If you give employees their dignity through better salaries and more opportunity, they perform better and lift sales. Many retail experts have pointed out that the average customer will spend as much as 90% more than they originally anticipated if they’re assisted by a friendly, helpful, and professional employee. Isn’t that worth the investment?
Consider all this in light of the all-too-familiar practice of optical managers and owners keeping employees undertrained to keep them underpaid. This is true throughout optical dispensing. But by practicing “The Good Jobs Strategy” of looking at employees as assets, optical may just be able to get itself back on a solid growth track.
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