Are Employees Building up Online Stores and Sabotaging Profit Margins?

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Are you losing profit margins lately?

Much attention is being given to online retail growth that increased during the pandemic.

But what if that growth didn't stem entirely from consumer demand but from employees teaching shoppers how to game the system?

Last year my buddy Matt, who 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, 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 more products, close out his computer and wait. 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...

Then, Williams-Sonoma reported closing up to 25% of their stores.

The CEO said their focus is still physical retail, but they are aligning more resources 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 advised to put the fixture in her online cart and close it out.

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

Why would 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.

Some consumers will do whatever it takes to get a cheaper price.

So what’s the answer?

Wondering how to increase profit margins?

At its core, there has to be a fundamental education for 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 the 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 say 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 profit margin but are teaching your current brick-and-mortar shoppers to bypass your store and game the system on your website.

In Sum

Young people can quickly determine most systems' ins, outs, and workarounds. Let me be clear. This is not about any one generation. It's about human nature. 

If left rogue, that knowledge 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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