Retail Rundown: The Value of Engaged Associates | Cathy Hotka, Jack Bennett & Connie Cartmill

Cathy Hotka:
Hello, Retail Rundown listeners. I’m Cathy Hotka, your host for the week. Joining me today, our guests, Connie Cartmill and Jack Bennett.

Cathy Hotka:

Jack, Connie, thank you for joining the show today.

Jack Bennett:
Great to be here. Thank you.

Connie Cartmill:
I’m thrilled to be included in this conversation today. Thank you for having me.

Cathy Hotka:
This is going to be great. You guys are both fun. I’d like to spend today discussing the store and, just as important, the changing role of store associates. Associates on the floor are the face of every retail operation. Not only do they keep retail operations running, they also shape customer perceptions and hold valuable potential as brand ambassadors. Gallup research shows higher employee engagement results in higher profitability, higher customer ratings, fewer safety incidents, less turnover, and less shrinkage. So let’s kick off the conversation by discussing who’s getting it right. Jack, can you name a company that you think is doing really well in employee engagement?

Jack Bennett:
Yeah, of course. I think you hit it right on the head. It’s so easy for organizations to say, “We’re a people-first organization,” or “Our store associates are our favorite,” but it’s much more difficult to actually implement that methodology. And I think throughout the pandemic, we’ve seen those already best-in-class organizations become even better. The ones that come to mind are the ones that if you go from one store to another store, you have the exact same experience that’s really memorable. Lululemon comes to mind. Best Buy is another one that’s had an incredible turnaround. One of our customers, Buehler’s, has also done some really great things in the grocery space.

Cathy Hotka:
That’s amazing. Connie, when you think about employee engagement, which companies come to mind for you?

Connie Cartmill:
Yeah, I completely agree with what Jack was speaking to. I have a bias towards brands that are just so focused and completely aligned on an authentic experience that supports their brand story, and that they take that strength and they apply it to the associate and the customer experience in the store. I think starting from that focus and that foundation of strengths, who comes to mind for me is … well, I’m pretty excited about some of the brands that come from DTC roots. When you think about Warby Parker or Yeti, I’ve just recently discovered [Vooray 00:03:28], Outerknown, Fabletics, they all come to mind because they started with the customer at the center, and then now they’re taking that customer-at-the-center appreciation and value and applying it to associates in the store. I also really love those brands that are authentically original. Vans absolutely stands out to me, Levi’s. I think they’re showing the way that they can be traditional, but they can evolve and stay true to who they are.

Cathy Hotka:
I think that’s a really important point about knowing who you are, because the brands that stand out for me know exactly what their purpose is. So I’m thinking Best Buy certainly, Tractor Supply, The Container Store, companies that understand exactly what it is they’re selling and they know how to staff around that. So let me ask one thing, one of the things that a lot of people are talking about these days is customer-obsessive engagement. How is it that we can encourage associates to really engage with customers and create that experience? Jack [crosstalk 00:04:44]

Jack Bennett:
Sure. I think it’s interesting, for one of the first times in I think as long as I can remember is the customers are now at a point where they want to be engaged more than ever, and probably due to the fact of self-isolation, retailers closed, not traveling. Any opportunity to go out and speak with new people is an exciting experience. So what’s great is, for the first time, we have customers that want to have longer and more in-depth engagements with their customers. Connie mentioned Warby Parker before. And of course, being on Zoom meeting after Zoom meeting, my eyes started to go bad, so I needed to go and get glasses. And two hours later, I left with three pairs, which I alternate every day. But it’s that type of experience where it’s not just about buying a product or filling a specific need that I went in there for. It’s about creating an experience that I’m retelling months later because it was just an amazing time with that organization.

Cathy Hotka:
Yeah. And that’s what happens, people brag about those experiences. Connie, what about you? Have you had one of those?

Connie Cartmill:
Yeah, I’ll add that I think the engagement of associates in the store really comes from a place of inclusion and co-architecting how work was going to get done. And there were so many phenomenal, phenomenal stories of working through COVID when you didn’t always know what was coming next. So tapping into collective intelligence and … I’ve always said associates in the stores, they’re always the MacGyver of situations, unknown situations. So continuing to include store teams, asking questions, most importantly listening, and adding that into architecting the workload I think will take a lot of brands a long way.

Cathy Hotka:
You mentioned something that got me thinking about store execution because, during the pandemic, it was very difficult. People had to figure out how to change their operations on a dime. We heard at the last Store Operations Council meeting that the Home Depot stood up curbside across the enterprise, which means internationally, in a week. So store execution got really complicated during the pandemic. Is it still that complicated now?

Connie Cartmill:
Yes and no. I think that … dual answer. While some of the short-term complications are receding, such as capacity restrictions, social distancing in some states, reporting of COVID exposures and completely changing a store schedule based on exposure and a time that they could no longer work, while that is improving, hallelujah, what’s here to stay are these new services and this … what I call the silver lining to COVID. It’s not going away. The curbside, the fulfillment from stores is only going to continue to ramp up. The band-aids that were probably put in place, the band-aids need to be replaced in a more permanent way. So I would say, yes, it’s not the job that it was, pre-COVID.

Cathy Hotka:
Yeah. And I’m guessing that those band-aids that need to be replaced, as you said, that those processes need to be more sustainable and profitable than they were when things were slapped together at the beginning.

Cathy Hotka:
So store operations got really complicated during the pandemic, and retailers put in all kinds of new processes to keep customers and associates safe. Is it still complicated now?

Jack Bennett:
Yes. I think the complication of store operations will always remain. It’s just going to be a different driver for it. I think it was most complex because so many organizations were dealing with challenges that they never had to face before. Curbside and omnichannel are the biggest levers for that. At Ceridian, we did a survey at the end of last year with 300 retailers, and it was something like 52% had adopted advanced operation technologies during the pandemic to account for those, as Connie was talking about, those band-aids. And now it’s going to be a matter of getting those type of operational methodologies ingrained in their new normal so that they can have formal processes, formal procedures. Customers are expecting it now, and employees will then embrace their new skills that they have to adopt.

Cathy Hotka:
I think that’s the big deal. And ideally, when we have associates with these skills, they stay longer, they’re more productive, and they’re more profitable. So let me ask a different question. One of the things we found early on last year was that retailers had a barrage of often contradictory messages to associates, and associates had a hard time keeping track of what was the truth. We’re open seven days a week. No, we’re open six days a week. Early morning is for seniors. No, it’s not. It’s for everybody. And it was really a mess and confusing for associates. Many companies installed new communications platforms. How big a challenge do you think communications with associates is now?

Jack Bennett:
Yeah. Pre-pandemic, communications were always a challenge. How do you align every store, every employee to be on the same page? Then you layer in the complexities of different jurisdictions and governments making announcements that are contradictory to what the organization is saying. It was very complicated, and I think that’s only going to go forward. The one thing that we can rely on most employees and associates to have is a smartphone. So organizations that leverage technology to interact with the individual associate for broad system announcements is really pivotal to ensuring that, at least at a baseline, you’re getting those employees to reshare that same message. I think where baseline organizations and advanced organization separate is that that level of culture of embracing the store management, the district management, so that you’ve got an entire top-down communication tree, where even if you send a system broadcast where everybody reads the same information, are they acting on it, and are they adopting that communication message?

Cathy Hotka:
So, Connie, how does that strike you?

Connie Cartmill:
Yeah, I completely agree. Well said. Communication to the field in a waterfall method has always been a challenge, and it’s like the game we all played when we were kids. Whisper something into your neighbor’s ear and let that go around the circle and see what the message comes out at. So I completely agree with Jack that direct to associates is ideal. And the ideal situation is a phone in their pocket. And quite frankly, if it’s not a company-owned phone that you have in their pocket, they’ve got their own phone that they’re using. So it’s happening anyway. So in an ideal situation, over-communicate. I think that in times of learning, whether it’s learning because you’re in a pandemic where everything is new, or learning in a new season or a new employee, over-communication is key. I also think there’s this friction between agility and predictability, and stores operate best with predictability. And in the absence of that, and in the need for stores to move faster and be more agile today, communication is the bridge between those two things. So definitely, technology will help in this area.

Cathy Hotka:
That’s terrific. Speaking of associates, there are retailers who are having difficulty attracting associates. Some associates just don’t like the danger potentially of being in a public kind of job. What are some of the moves that retailers can make to compensate for this? Jack, I’ll throw it to you.

Jack Bennett:
Thank you. I think there are several things that employees are looking for when they’re searching for new organizations to work for. And it’s really putting the individual associate in the driver’s seat, as far as which companies they see as a good fit. Connie mentioned it earlier, the idea of inclusivity. Having a really strong DEI program is resonating really well with Gen Z and millennials. Again, going the extra mile and making those strides and changes over the past year with DEI, we’ve seen a lot of positive feedback from associates toward those organizations that adopted a program.

Jack Bennett:
The other thing is having differentiators across their competitors, so whether it’s a more flexible working pattern, whether it’s access to their pay slip or whether it’s access to their pays in advance of their traditional pay date, or whether it’s some sort of flexible vacation or sick time that goes above and beyond just having competitive pay. I think what we’re seeing now is, yes, pay will always be the most important thing. Of course, money speaks. But now there are so many ancillary benefits that employees are looking for retailers to adopt.

Cathy Hotka:
That’s a really good point. Connie, what do you think?

Connie Cartmill:
Yes. I think I’m going to come back to what can be some proactive moves retailers can make to compensate. My favorite word: predictability. And that’s in doing advanced schedules. One of the challenges is how everyone balances and lives their life. And not only for flexibility, but knowing in advance, two, three, four weeks, what your schedule’s going to look like. And in a time of needing more labor, this is absolutely necessary. And being able to forecast out, so using better tools to predict. And I know it’s been a very unpredictable period.

Connie Cartmill:
I think there’s also the aspect of workload. Anybody who glances through Glassdoor at associate comments … and I know, take them with a grain of salt. But honestly, they’re like a tabloid. There’s always a little silver lining of truth within workload in the store. So in this new world of fulfillment, how are we planning the workload? And who’s going to get the work done? My favorite was called start, stop, and continue. Analyze the workload in the field on a regular basis. Don’t wait for an emergency. There are things you should start to make their life easier. There are things you should stop because they don’t bring any value. And then there are absolutely things to continue. And please include your store associates in that conversation. They’ve been the referee for a few months now, the referee of masks in the store, the referee of social distancing. So let them be the referee for how they divide up work.

Cathy Hotka:
Connie, who’s the right person at corporate to be doing this analysis?

Connie Cartmill:
Yeah, it’s a partnership. And if I have noticed anything changing in the world today, it’s that CEOs, chief product officers, and head of operations are partners now. And operations isn’t the execution department any longer. Planning how projects are executed and partnering with the field will bring the best execution. So in the best organization, removing the silos and having everyone part of leading the team and how you’re going to lead the team, to me, is critical.

Cathy Hotka:
Jack, this is really sort of a 180 from where we used to be with associates. I mean, five years ago, there was this thought that associates were transferrable, that they were cogs in the wheel. It didn’t matter much who they were or what they knew or how long they stayed. It sounds like that is over forever.

Jack Bennett:
I sure hope so. I think back to my own personal experience, there was always that big disconnect about the culture at the corporate office versus the culture in the stores. And I think Connie hit it beautifully where, when you’re reading those Glassdoor ratings, and now you’re having a really bridge between operations and HR and talent, is those cultures are being merged. And the corporate environment are trying to find ways to bring in the individual associates to make them feel a part of something larger than, say, pushing paper or ringing up another customer, because it is now entirely different. And I do hope, as one of the silver linings to this pandemic is the focus on the individual employee has really blossomed. And as we’ve seen, the companies have succeeded, customer satisfaction rates have never been higher, and profitability within organizations has also increased, too.

Cathy Hotka:
I think that’s really a silver lining of all of this, is we had a really rough 16 months there, but I think we’re going to come out of it with a better understanding of what makes for a great experience, what makes for a happy employee, and a successful company.

Cathy Hotka:
So, Connie, one of the things that we’re seeing is that if we’re going to have store associates who stay longer and who are worth more, they need to understand company values, they need to have better skills, they need to be included in decision-making. How do retailers help with training and professional development of these important people?

Connie Cartmill:
Yeah, that’s an excellent question. Education is the key. I love this move towards skills-based hiring and rescaling. Some really great stories came out. Aritzia stands in my mind, that they didn’t furlough anyone. They moved them over and trained them in a very short period of time to take calls from customer service, from e-com. So as an associate, make my development the reason I stay, so create an opportunity for me, show me the path. The path of going from a store to a role in HQ, there are not enough stories about that. And so I think that starting there, I’m very encouraged by the number of posts that I’ve seen from organizations of recent, for learning and development positions. More talent conversations. Put me on an education path. And it’s bubbling out there now. There just has to be a process so that the field can integrate and district managers can become more coaches learning development training than they are just, “Did I get all my orders fulfilled from my district this week?” I love it.

Cathy Hotka:
That’s a whole culture shift.

Connie Cartmill:
Yes, it’s a massive one. And not to be taken lightly, because not done well can have the opposite effect for the associates in the store. But invest in me, and I’ll invest in you.

Cathy Hotka:
Good point. Connie Cartmill, Jack Bennett, you guys are fantastic. What an interesting discussion, and thank you so much for joining us.

Connie Cartmill:
Thank you. What fun.

Jack Bennett:
Thank you. It was my pleasure.