Photo by Alex Kotliarskyi on Unsplash
Associate Experience Is Becoming the Norm for Retail Success
In the retail business, survival often hinges on staying ahead of the curve. In the old days, customer experience and sales were the key indicators of success. Today, the game has changed, and an important term is beginning to resurface with newfound potential. The associate experience (AX) is stepping up as a critical ingredient in retail success.
Retailers must now focus on the well-being of their workforce more than ever. With the dramatic changes in social dynamics and economic factors post-pandemic, retail employees have been quitting at record rates. Although companies can focus their efforts on understanding the habits and psychologies of certain generations, investing time and effort into enhancing the overall workplace atmosphere and employee attitudes could potentially yield more significant benefits.
And while TikTok trends might not be a magic-pill solution for making employees happy, there’s no denying the importance and value of the associate experience. “Associate” includes everyone in the company, highlighting partnership and shared responsibility. Through this lens, everyone has a role in shaping the company’s strategy, impacting each person’s unique career journey.
This approach moves away from the term “employee,” which implies a power divide and the need for one group to change. Employee engagement initiatives often fail to deliver the desired boost in productivity and retention rates. Companies invest heavily in these programs, but they usually only yield short-term improvements in engagement scores because these efforts create an unnecessary divide between management and workers. As a result, companies may experience temporary engagement spikes that quickly deflate, causing employees to view these programs as manipulative.
Instead, understanding that each associate’s experience is unique, almost like a strand of DNA, creates meaningful engagement. It’s not about sparking temporary surges in engagement scores, but about fostering a culture where every associate feels valued and invested in the company’s success. This approach is transformative, creating long-lasting and sustainable change — the very promise of engagement programs.
Let’s face it: Retail associates are the face of the store. Their behavior and level of knowledge can make or break a customer’s experience. A happy and motivated sales team can create a positive atmosphere, which can lead to customer loyalty and repeat purchases. However, if a company has a bunch of unhappy employees, it might just throw potential sales down the drain.
Keeping employees satisfied has another big benefit — it helps diminish staff turnover. Replacement hiring is costly and disruptive. Retailers can cut down on these expenses by fostering a positive work atmosphere. When companies enhance AX, associates can eliminate tedious work and focus on tasks that add more value — a win-win for both the employee and the retailer. One way smart retailers do this is by providing their associates with the right tools to make their jobs easier. This strategy is crucial, especially for executing tasks like Buy Online Pick Up In Store (BOPIS) order prep that are critical to a store’s success.
Sales associates who feel valued and engaged may also be more motivated to ensure customer satisfaction and boost sales, and they may be more capable of offering product recommendations and upselling. A focus on AX can therefore lead to an increase in sales and revenue. Additionally, they may be more likely to embrace new digital tools, which is essential with the rise of e-commerce and omnichannel retail strategies.
A brand’s reputation is crucial in this digital age. Customers can share their experiences online, and associates play a vital role in shaping these experiences. Happy employees provide excellent customer service, contributing to a positive brand reputation. In contrast, a poor AX can lead to negative reviews, damaging your brand’s image and profitability.
One such example of this practice is seen with PepsiCo. According to the National Retail Federation (NRF), PepsiCo, with most of its 70,000 North American employees involved in operations, places a strong emphasis on the associate experience. The company is dedicated to “removing friction” from jobs, simplifying tasks, and facilitating overall employee well-being. It also offers educational opportunities, allowing employees to continuously improve themselves personally and professionally.
Last January at NRF 2023: Retail’s Big Show, PepsiCo North America’s CEO Steven Williams shared the company’s approach to workforce management and investing in wellness and upskilling. “This is an important topic,” Williams stated. “One reason we’re so interested in it is that we are a truly end-to-end, seed-to-stem business. Most of our workforce is either making, moving or selling the merchandise… So, this is a very, very important subject for us.”
“We’re committed to having a workforce that is not just diverse but inclusive. It doesn’t matter where you come from, what your background is, or who you love — you need to be able to succeed to be your best self.”
Steven Williams, PepsiCo Foods North America, NRF
PepsiCo also stands out for its commitment to diversity. With a history of breakthrough hires, the company continues to strive for a diverse and inclusive workforce, creating an environment where everyone can thrive and be their best self.
Discussion Questions
How do societal and economic changes influence the shift from customer experience to associate experience, and how can these factors be leveraged for long-term success? How can we turn the idea that improving workplace atmosphere and employee attitudes is more beneficial than focusing on generational habits into actionable strategies? What parameters should be used to measure the success of these efforts? Drawing from the PepsiCo example, how can the principles of “removing friction” from jobs and enhancing employee well-being be applied universally in diverse retail settings for a comprehensive positive associate experience?
Poll
Loading …BrainTrust
Dave Bruno
Director, Retail Market Insights, Aptos
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
If workers feel valued, empowered and engaged then they’re much more likely to give good customer service and to help advance the business. It really is as simple as that. Some great businesses, like Costco, recognize this; sadly, many others do not. Talking to workers and understanding their needs, concerns, and ideas is critical in creating an environment with is conducive to success.
As a general rule I resist oversimplifying things, but in this case, I think we can safely say that simply giving associates the tools they need to increase their compensation and advance their careers would go a long way to delivering better associate experiences.
Didn’t we used to call this ‘culture’…? And didn’t we say that culture eats strategy for breakfast? It’s a little more complicated than AX = UX, but not much.
All the words in today’s discussion sound appropriate. But, one doesn’t change the employee situation by changing the name from salesperson to associate. The average turnover rate for all industries in the U.S. is between 3% and 4%. In 2023 the turnover rate for retail was 76%.
In retail, retail associates will never have a partnership or shared responsibility, or a role in shaping the company’s strategy. The mold will never be broken that labor is a cost and not as asset.
Let’s simplify the whole process, as Dave Bruno says, “simply giving associates the tools they need to increase their compensation and advance their careers would go a long way to delivering better associate experiences.”
It all comes down to the manager. It is often said that it is not the company you work with but the person you work for that makes or breaks your career and your professional happiness. Making sure you have the right next level management team in place that knows how to motivate, inspire and provide real time feedback is a critical component to employee experience.
Most retail and quick service chains are rife with turnover. Go to a restaurant regularly, and you will see this first hand-good luck getting to know anyone. If workers are treated well and compensated fairly this will change. Sadly I do not see a path for this to happen, because why invest in a workforce that is not invested in the job? Stereotypical Catch-22.
Our data has been showing this for at least a decade. Retailers know it. It’s just very hard to provide what’s needed within the framework of our current store model. Store contribution (an individual store’s P&L) is already less than we’d all like. So the dilemma, which the industry has been sitting with for years is how to tweak the model so they can do what’s needed without destroying earnings.
it’s not a small ask
There are a lot of moving parts, but the associate experience has always been critical to retail success. And always will be.
They are living, breathing representatives of the brand. The role associates play is immensely important.
With a significant number of retail employees opting to leave the industry in the past few years, retailers have suffered from staff shortages. The staff shortages have changed the power dynamics in retail. Employees now wield more power and influence in retail organizations. The successful retailers realize this and are providing their staff better tools and significantly more benefits than ever before.
Let’s face it: store associates are also the face of much of your online experience too. It is imperative that they be taken seriously, trained provided with tools, and accommodated as needed.
This should not be a “shift from customer experience to associate experience”, it should be, ‘customer experience AND associate experience.’ Front-line store staff have the greatest ability to drive shopper conversion and set the tone for the store experience. AX maybe a new acronym, but the idea is not new – keeping your employees engaged, motivated and happy has been a long standing aspiration of many if not most retailers. An important place to start is by truly understanding what the work environment experience is like for the associate – not what head office thinks it is, but what it actually is. There’s too much lip-service around AX and not enough action. Leaders need to spend meaningful time in their stores to acquire the insight they need. Then they need to create financial incentives, provide tools and programs that are designed to encourage associate development and performance.
I’ve preached for years that the employee experience is where customer experience starts. The way employees are treated is the way customers will be treated.
And I love the idea of removing friction. We try to make easier customer experiences by removing unnecessary steps, so why not do it for employees?
Hasn’t it always been that happy employees (or associates) make for a good company and good customer experience? This is not a new concept, just one seldom put into practice. As such, the mindset shift from customer experience to associate experience will require some effort.
The most companies can do is foster a supportive and inclusive culture from top down; especially and including middle management and long-tenured employees who’s day-to-day actions often rub against the grain of change. The least companies can do is say employee experience matters and do nothing different.
As with all mindset shifts in corporate environments; leadership, accountability and demonstrated results are key. It’s long overdue that companies focus on employee experience beyond just calling employees valuable assets. It’s rather unfortunate that it took a pandemic to bring light to real employee/ associate experience.
Most team members want to work for something greater than themselves, whether a point of pride in workmanship, a place that aligns with their values or to build something great. Some, but fewer are happy with a paycheck, and stability.
It’s important for leadership to go beyond extracting value and taking a posture of bringing everyone along for the ride. This requires high communication, making large goals clear and attainable, empathy and support, and doing everything to help teams make it happen. Focusing on inputs (placing risky but valuable bets, doing the work, the planning, creating the tools necessary, and executing) are more important than the outputs. The outputs come by focusing on the inputs.
In my opinion, the shift to associate experience reflects a response to post-pandemic changes and a focus on workforce well-being. Economic shifts and social dynamics impact how employees engage with their work. To leverage this for success, companies should prioritize fostering a culture where every associate feels valued. This approach goes beyond generational habits, creating sustainable change. Metrics for success should include reduced turnover and enhanced employee engagement. Drawing from PepsiCo’s example, principles like “removing friction” and promoting diversity can universally apply, ensuring a positive associate experience across diverse retail settings. This aligns with societal expectations and contributes to long-term success.