The Impact of Employee Engagement and Labor-Saving Technology on Retail CX

Today’s consumers are more worried about finances and plan to spend less—putting the pressure on retailers to drum up more traffic and drive conversion rates. And with more than half of those consumers preferring to shop in person vs. online, the key to converting non-purchasers into paying customers will rely heavily on the in-store experience.

There are several factors that can make or break an in-store experience. Things like cleanliness, availability of merchandise, and price play a part—but the real differentiator is service. And the key to providing exceptional service starts with ensuring you have an engaged front-line staff.

Why? When customers receive quality assistance, they spend more. In fact, brands with highly engaged teams outperform their less engaged counterparts with 8% more in comp sales and 5% higher overall customer satisfaction.

How retailers can improve the employee experience

With employee engagement having such a big impact on a brand’s bottom line, retailers can’t afford to ignore the employee experience (EX)—especially in today’s volatile job market. To drive EX improvements, some retailers have implemented labor-saving technology (LSTs) in an effort to automate more tedious tasks. And many brands are placing more emphasis on their hiring and onboarding processes, which are key to establishing a sound relationship with associates and will have a big impact on their engagement and employment retention. To help you establish successful employee engagement efforts—from hiring + onboarding to ongoing support + retention, we collected feedback from 500 front-line employees in the service industry. In this blog, we’ll reveal how brands can support (not alienate) employees with labor-saving technology, what employees have to say about companies’ onboarding practices (spoiler: it’s not great), and ways retailers can promote retention with current employees.

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Incorporate labor-saving technology to support—not replace—front-line employees

With this year’s record-breaking labor shortage and rising levels of employee burnout, many retail brands turned to automation solutions to help fill the void of real-life employees and drive down labor costs. Unfortunately, many of these tech implementations happened in haste and failed—hurting customer satisfaction and alienating employees who were undertrained.

Automated solutions—like self-checkout, self-serve kiosks, and AI-powered inventory tools—can be a great investment, but hitting your staff and customers with a barrage of new systems all at once can have negative consequences. Follow these best practices for successful implementation:

• Create a digital strategy that introduces new tech slowly + thoughtfully
• Properly train employees on the adoption of LSTs—and provide ongoing training when necessary
• Avoid launching during busy times (i.e., in the middle of the holiday season)
• Empower employees to give their feedback, not just after implementation but as investment decisions are being made
• Set your employees up for success so the new tools you’re providing serve as an asset, not an obstacle

Tech investments for retail brands to consider

No matter the stage of your brand’s digital transformation, these top 3 enhancements should be on your radar:

1. BOPIS option | The pandemic boosted the popularity of BOPIS (buy online, pick-up in store) for health-concerned customers wanting to spend minimal time inside a store. Though in-store shopping is making a rebound, BOPIS will continue to be a preferred option for many—especially customers unwilling to pay delivery fees. If you do provide this service to customers, speed is key—wait times need to be under 6 minutes.
2. AI-powered inventory management | With supply chain issues expected for the foreseeable future, product availability will continue to be a pain point for retailers. Inventory tools powered by AI can help create efficiencies across touchpoints, ensuring in-stock information is always up-to-date both online and in stores.
3. Self-checkout | When it comes to labor-saving technology, self-checkout is arguably the most divisive. As a customer, you either love it or you hate it. And those two camps are nearly split down the middle, with 55% preferring to check out with a cashier. Before your brand goes all in and pulls an Amazon Go, consider your customer base. If you completely eliminate cashiers, you could alienate your customers who are less savvy with new technologies.

Brands are falling short with their onboarding efforts—and it’s impacting retention

An employee’s onboarding experience is an opportunity to make a good first impression. Unfortunately, many brands aren’t delivering—nearly 40% of new hires report not being satisfied with their onboarding. And when an employee is dissatisfied with this process, their intent to remain drops to almost 50-ppts. Meaning, you’ve just spent time and money on someone who likely already has plans to quit.

And these shortcomings are happening even before onboarding, too, with 30% of job prospects dissatisfied with communication during the interview process and 25% citing issues with the clarity of compensation and benefits.

When asked about the key elements to a great onboarding experience, panelists cited a welcoming team, understandable training, and clear expectations as the most important factors. Additionally, new hires reference pay, scheduling/hours, and fulfilling work as reasons they’d stay with a company.

To improve your hiring + onboarding efforts and drive retention, be sure you’re communicating with the candidate/new hire throughout the entire process—especially when it comes to pay and benefits. Providing a clear and concise onboarding process—that includes manager touchpoints—will set solid expectations from the start. Also be sure to schedule time for new hires to meet the team and encourage a welcoming environment.

Protect your greatest asset—your current employees

In an industry already plagued with high turnover rates, this past year’s labor shortage has deeply impacted retail brands. Organizations are now battling it out to not only fill job openings but keep employees in those roles.

To combat burnout and drive retention efforts, follow these 3 guidelines:

1. Identify what matters most to employees | Engagement efforts should start by understanding what your employees expect from you and prioritizing their needs. Ask the right questions and act on that feedback.
2. Focus on fulfilling work | Do you know the number one reason employees stay at their job? It’s not all about high wages or elaborate benefits. Employees want their work to be meaningful. Whether that’s making customers happy or moving up in the company, rewarding work matters most.
3. Provide perks beyond wages | To remain competitive in this job market, retailers need to get creative on payment offerings and work opportunities. This includes providing more frequent pay cadences, commissions, sign-on + spot bonuses, financial incentives for cross-training, and flexible schedules.

How the employee experience impacts your retail business

For customers who prefer in-person interactions and want the support of an on-site experience, they expect a differentiated in-store experience. Empower your front line to provide the service those customers expect—because when customers are happy with the assistance they receive, they spend more.

This all starts with an engaged field team. Because when an organization treats its employees well, they’re more satisfied with their jobs, more loyal to the organization, and provide better customer experiences. And when excellent services are delivered by a highly motivated staff, customers feel more connected to the brand in a positive way that drives long-term loyalty.

To learn more about how engaged employees are essential in today’s competitive market—and other top trends impacting the retail industry—check out our new consumer report.