Co-authored with Marshall L. Fisher and Serguei Netessine
As they fight for survival in the era of online shopping, brick-and-mortar retailers are turning to an age-old strategy: cutting expenditures on workers. In the U.S. department store segment, for example, head count per store has fallen by more than 10% over the past decade, while wages per employee have dropped by 4%. And payroll isn’t the only thing being trimmed: Training budgets have been chopped as well. A survey by Axonify, a provider of training software, found that nearly one-third of retail store associates receive no formal training—the highest deficit in any of the industries surveyed. Understaffing stores and undertraining workers was never a good idea, but it’s especially bad now, because it takes away the biggest advantage traditional stores have over e-tailers: a live person a customer can talk with face-to-face.
