Wrong-Way Retailing

This article will take you down a slightly different path. Instead of the thinking of yourself as a hiring practitioner, become a customer. Now, fast-forward to the drive home tonight. Ready? Look up ahead. There’s a mall! Let’s stop and do some shopping and relieve some pent-up stress. Have you noticed that some retail stores are a little more fun to visit? That some clerks are a little more helpful and seem to know more about their product line? That some places really care about helping you? Does this kind of personal treatment encourage you to buy more? Shop there more often? Recommend the store to friends and relatives? Good. You have first-hand experience of what hiring the right retail employees can deliver: larger sales, more return business, greater customer loyalty. Retailing is a tough business. Retailers have to sit and wait for buyers to find them. Nowadays, plenty of people blame poor retail sales on the economy, but a recent Time Magazine article described how retailers are often their own worst competitors (Bill Barol, “Just Take the Money!” Time Magazine, July 2003). Barol cites examples from some of the nation’s largest retailers, illustrating how they organize store layouts, build attractive displays, create self-checkout systems, and conduct major ad campaigns to increase business ó only to have employees treat customers like a pimple on prom night. Yep, the same retailers that spend heavily on physical layout persistently hire clueless or rude employees. Barol advises retailers “not to let their ads write a check their stores cannot cash.” In other words, don’t waste money bringing customers to the store if employees aren’t selected for customer service. Why does this happen? Retailers and customers are often running on different tracks. To illustrate this point, we put together a few strategies retailers use to sell merchandise. It would be interesting to see how much you agree with them. What Do Customers Want? Rank-order the following eight strategies according to what you expect from a retailer. It will be easier if you start with “8” being the most important, then “1” as the least important, then “7” as the next most important, then 2 as the next least important, and so forth. Do not use the same number twice. __ a) Store easy to get around

__ b) Salespeople who know the product line and can answer your questions

__ c) Attractive displays and layouts

__ d) Friendly, helpful sales people who care about your shopping experience

__ e) Merchandise always on sale

__ f) Being treated as an valued individual

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__ g) Well-organized and efficient

__ h) Salespeople who sincerely appreciate you shopping there Done? Now, let’s examine your responses. First, add together items a + c + e + g. We’ll call that the “M” score. Put the M score here ___. Now, add up items: b + d + f + h. We’ll call that the “E” score. Put the E Score here ___. The “M” score refers to the Mechanical aspects of retailing. These are things that virtually anyone with money can imitate. The “E” score, of course, is your Emotional buying experience. Which of the two numbers was greater for you, M or E? If you are like most people, your “E” score will be much larger than your “M” score. But where do most retailers put their dollars? You guessed it ó in the M category. Anyone can compete on a merchandising level; however, it takes a truly savvy retailer to compete at an emotional level. For example, I shop at two home improvement stores, Lowe’s and Home Depot. Both stores sell roughly the same kind of merchandise and both tend to be located within a mile or so from each other. Although, I prefer the way Lowe’s presents their merchandise, I spend more money at Home Depot. Why? If I have a question, Home Depot employees can usually answer it; almost everyone working at HD smiles and greets me in a friendly way. Even if it is not their department, HD employees often go out of their way to help. I seldom have that same experience at Lowe’s. HD seems to understand the emotional retailing experience better than Lowe’s. What do you think would happen if Lowe’s provided a better emotional buying experience? Training to the Rescue? When I was in the training occupation, I regularly shopped at Ukrops, a local chain of about 27 food stores in central Virginia. Ukrops competes with national brands such as Winn Dixie and Kroger. In spite of the fact that Ukrops did not sell alcoholic beverages and was closed Sundays, the chain consistently prospered in the same locations where some of the major chains failed. Why? Because Ukrops’s employees treated their customers like family members. When I asked Ukrops management about what kind of training program they used to develop such quality people, they told me, “None. We hire them that way.” I immediately rethought my career. Troglodytes in Sheep’s Clothing If you agree that buyers prefer to shop where clerks deliver superior customer service, that superior customer service is profitable, and that service skills are very hard to train, why can’t retailers figure this out? There can be only three explanations: 1) management does not care, 2) management is clueless, or 3) management cares, but does not know how to fix it. We won’t worry about the first two management groups. We’ll just watch their profitability “mysteriously” decline as they reshuffle merchandise around the floor looking for a better floor layout. Sayonara! Now, for the third group. Like other articles I’ve written on this subject, there is no such thing as an easy or one-size-fits-all hiring process ó the same is true for retailing. For example, clothing clerks need a fashion sense, plumbing clerks need mechanical ability, warehouse clerks need physical ability, and so forth. Just as we have differences in clerical job requirements, we also have similarities. Employees are expected to show up for work on time, be conscientious, not steal, treat customers as a valued commodity, and keep their hands out of the till. That makes hiring retail employees slightly more complicated than it looks. For example, an employer needs first to answer:

  • How complicated is the product? How much learning is involved?
  • What kind of special knowledge is required (mechanical, decorating, and so forth)?
  • How should customers be treated?
  • What kind of temptation will the employee face?
  • What impact will turnover have on sales?
  • And so forth…

Now, it should not take a rocket scientist to understand that 1) single-test data cannot be trusted to measure all these things, 2) interview data cannot be trusted to measure all these things, 3) you have to know what you are looking for before discovering whether the applicant has the skills or not, and 4) you need to use several hiring tools to get what you need. Multi-Trait, Multi-Method “Multi-trait, multi-method” is a term given to a hiring system that measures several traits using several tools. The goal is to measure everything that is important ó and measure it at least twice. That way you make the fewest mistakes.

  • Learning and problem solving: These skills can initially be measured using behavioral interviews, but accurate data requires pencil and paper tests. Is more, better? Nope. Learning test scores tend to fall along a bell curve: too little for the job, just right and too much. Too much can lead to high turnover; too little can lead to performance problems; and just right balances the hiring market and job requirements.
  • Special knowledge: Special knowledge, of course, will depend on the job. This can be measured using pencil and paper tests and behavioral interviews conducted by topic experts.
  • Customer service skills: Anyone who has used a pencil and paper test to predict interpersonal skills knows two things: 1) you can trust bad scores to predict bad behavior, and 2) you cannot trust good scores to predict anything. Determining if an applicant has good customer service skills takes a combination of behavioral interviews and short realistic simulations where the applicant interacts with a “customer.” If you are familiar with behavioral interviews, think of simulations as controlling the situation, watching the behavior, and evaluating the results ó all in real time.
  • Assessing temptation: This requires more subtle tools. Of course, we could just ask someone if they planned to steal as soon as they got the chance or we could ask them if they ever stole anything in the past. However, these questions would all be transparent and easy to fake good. Fortunately, honesty can be reasonably measured by evaluating mental constructs like conscientiousness and neuroticism ó but that takes a behavioral interview and a special pencil and paper test.
  • Turnover: Turnover can be predicted or minimized using a combination of realistic job previews and biographical data. A job preview presents applicants with a real-life idea of what the job is like. This gives applicants a chance to opt out of the hiring process. A weighted bio-data screen is more complex. It is built by comparing historical data of people who stay with those who leave and analyzing the differences. It can get deep, but it is very accurate.

Conclusion In any business where goods are similar and prices competitive, the only thing that can set one company apart from the next is the kind of emotional experience the buyer has. Depending on the job, completing a decent validated retail hiring battery should take no more than 30 to 60 minutes to complete. Looking for one standard retail hiring test? Sorry, that will only happen when there is one standard retail hiring position. You do the math. Good employees + better buying experience = more business.


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