Are Employees Building up Online Stores and Sabotaging Profit Margins?

retail employee management

retail employee managementWondering how to increase profit margins? A lot of attention is being given to online retail growth during the pandemic.

But what if that growth isn't coming entirely from consumer demand and different needs during a pandemic, but employees teaching shoppers how to game the system?

Last year my buddy Matt, who really liked Pottery Barn furniture, was redoing a second bedroom. He went to the store to buy all of the furniture for it and when he approached a helpful retail sales worker, she taught him how to game the system.

She told Matt to go to the Pottery Barn site and add a few items to his cart and wait. “A coupon will arrive for 20 percent off. But don’t do anything with it.  Wait for the right offer.”

He was to add some more product, close out his computer and wait. Sure enough, two days later an email arrived offering 25 percent off. He remembered not to do anything but wait. He received a 30 percent off plus free shipping coupon a week later.

The brand lost margin.

The employee lost a sale...

Yet last week Williams-Sonoma was reported they were going to be closing up to 25% of their stores.

The CEO said the focus of their stores is still physical but is aligning more resources for online.

One has to wonder if they are looking at how one is depleting the other.

Sheila, another friend, when looking to purchase a $1500 chandelier from another brick and mortar store, was told something similar by another young salesperson. She was told to put the fixture in her online cart and close out.

She was told to keep checking back to see if the price went down or until she received a coupon. She purchased the chandelier last month for half off the original price – again with free shipping.

Why would a retail employees give away the profit by doing something like that?

Because they are frugal and are drawn to savvy ways to save money.

What is happening is no less than the rewiring of how people buy. But also the seeds of a new culture.

It seems some consumers are willing to do whatever it takes to get a cheaper price.

So what’s the answer?

At its core, there has to be a fundamental education of retail employees, regardless of their age.

They need to know how to engage customers without discounts.

Their job on the sales floor is not to find ways for their shoppers to game your system; it is their job to sell the products at the in-store price.

It is their job to enjoy building a sale and seeing it to its close.

It is their job to encourage discovery in the store, not discovery of a discount.

A foundation of how exactly to execute a branded shopping experience must be taught over time with practice and role-play.

Beyond that, managers must inspect what they expect and know what their employees are actually saying to shoppers.

And those marketing managers who have created those online incentives that take people from your store to your site need to stop patting themselves on the back for how smart they are.

Your Retail Sales Strategy needs to understand that those offers are not only taking away your profits but they are teaching your current brick and mortar shoppers to bypass your store and game the system on your website.

See also: Retail Customer Service: Beware Disgruntled Employees

In Sum

Young people can quickly figure the ins, the outs, and the workarounds of most systems. Let me be clear, this is not about any one generation, it's about human nature. Heck, I know I did when I got $139 plates for less than $20. 

That knowledge - if left rogue - will lead to a fatal hit to your margins as a retailer.

You have to train each sales associate to believe that actual customer engagement will create an in-store purchasing environment shoppers will want to return to again and again.

Without detailed training, they will continue to send your shoppers online - and maybe even to a competitor with a better deal.

You have a choice.

Do you want to put your retail employees on the right path to making sales in store, or are you content to let them game you out of the margins you deserve?

Can I solve this problem for you?

Yes, here's how, let's get started.

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