Why the In-Store Workforce is the Retailer's Most Powerful Asset

By Allison Gans, Louis Lim and Allan Schulte

Bangkok Post

Why the In-Store Workforce is the Retailer's Most Powerful Asset

By Allison Gans, Louis Lim and Allan Schulte

Published on December 28, 2015
min read


This piece originally appeared in The Bangkok Post. In a retail world focused on omnichannel strategies, product and service innovations, IT investments and technology-enabled stores of the future, winning retailers are taking a new look at their store labour models and budgets. Store associates represent one of the biggest contributors to the success or failure of brick-and-mortar stores. In many ways, they're a retailer's most powerful asset. Survey after survey reveals customer service in stores is the top factor affecting customer advocacy. Across retail sectors, a store associate's availability, knowledge, advice, assistance and friendliness exert a stronger influence on a shopper's likelihood to recommend a retailer than product assortment, the shopping environment and even price. On the flip side, poor service is a major contributor to customer defection. When Bain & Co surveyed shoppers on the subject, more than 25% of their top frustrations were due to bad experiences with sales associates. Local companies and multinationals have accelerated plans to improve omnichannel offerings in Thailand, with retailers such as Central, Tesco Lotus and Big C recognising a pressing need to integrate physical and online stores to meet the demands of their empowered, omnichannel consumers. As these and other retailers build omnichannel strategies requiring them to balance the needs of digital and physical channels, and as they grapple with rapidly rising labour costs and service requirements, they feel an increased urgency to revisit store labour, which represents more than half of a typical retailer's selling, general and administrative expenses. This comes at a time when store associates' jobs have grown more demanding, with new responsibilities such as searching online for out-of-stock merchandise and new technologies such as mobile checkout platforms or smart kiosks. Also, retailers' ability to spend on store labour is now under intense pressure from wage inflation, declining traffic to physical stores and the need to fund digital investments. *Read the full article in The Bangkok Post.* Allison Gans is a Bain & Co partner based in New York, Louis Lim a partner based in Singapore and Allan Schulte a partner based in Thailand. All are members of Bain's Retail practice.

This piece originally appeared in The Bangkok Post.

In a retail world focused on omnichannel strategies, product and service innovations, IT investments and technology-enabled stores of the future, winning retailers are taking a new look at their store labour models and budgets. Store associates represent one of the biggest contributors to the success or failure of brick-and-mortar stores. In many ways, they're a retailer's most powerful asset.

Survey after survey reveals customer service in stores is the top factor affecting customer advocacy. Across retail sectors, a store associate's availability, knowledge, advice, assistance and friendliness exert a stronger influence on a shopper's likelihood to recommend a retailer than product assortment, the shopping environment and even price. On the flip side, poor service is a major contributor to customer defection. When Bain & Co surveyed shoppers on the subject, more than 25% of their top frustrations were due to bad experiences with sales associates.

Local companies and multinationals have accelerated plans to improve omnichannel offerings in Thailand, with retailers such as Central, Tesco Lotus and Big C recognising a pressing need to integrate physical and online stores to meet the demands of their empowered, omnichannel consumers. As these and other retailers build omnichannel strategies requiring them to balance the needs of digital and physical channels, and as they grapple with rapidly rising labour costs and service requirements, they feel an increased urgency to revisit store labour, which represents more than half of a typical retailer's selling, general and administrative expenses. This comes at a time when store associates' jobs have grown more demanding, with new responsibilities such as searching online for out-of-stock merchandise and new technologies such as mobile checkout platforms or smart kiosks. Also, retailers' ability to spend on store labour is now under intense pressure from wage inflation, declining traffic to physical stores and the need to fund digital investments.

Read the full article in The Bangkok Post.

Allison Gans is a Bain & Co partner based in New York, Louis Lim a partner based in Singapore and Allan Schulte a partner based in Thailand. All are members of Bain's Retail practice.