Study: Diversity works for retail stores

Discussion
Source: Publix Facebook page
Dec 09, 2016

Retailers looking to drive their revenues higher might not need to run as many sales promotions if they had a more diverse workforce, according to a study published last year in the Journal of Management.

Researchers from several universities collected data from 220 big box stores spread across 19 states in the Midwest and West. The goal was to analyze two theories of management. First, would customers responded better (spend more) because they could identify with store staffs based on race and other similarities? The second was to determine if a more diverse staff led to more creativity and problem solving in the workplace.

While the study found a correlation between the success of stores based on whether they mirrored the diversity in local communities, it also found that diversity delivers returns for stores regardless of where they are located.

“Even if the neighborhood was mostly African-American or mostly white, the stores with a diverse staff still had stronger sales,” Dr. Patrick McKay of Rutgers University and one of the authors of the report told NJBIZ. “I believe this shows that a diverse staff brings different ideas about how to serve customers more effectively, which enhances overall sales performance.”

Stores with staffs that were less diverse were hindered for two reasons, according Dr. Orlando Richard, associate professor of organizations, strategy and international management at The University of Texas at Dallas and the lead author of the report.

“Employees didn’t have creativity and problem-solving skills because everyone’s the same, and they can’t identify with the diverse community either,” he said. “So you had two negative implications working hand-in-hand.”

“As communities become more diverse, it gives companies a broader pool to select from, but that doesn’t mean that a hiring manager is going to hire people who are different,” Dr. Richard said. “They may have biases and continue to hire the same types of people, whether that be race, gender or age. They have to be proactive and be aware of the environment and also aware of what can be done within the company.”

DISCUSSION QUESTIONS: Do you agree that more diverse workforces produce better results for retail organizations? Have retailers done a good job of promoting diversity (race, gender, age, etc.) from the front line to the c-suite? What must retailers do to create corporate cultures that embrace diversity and promote inclusiveness?

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Braintrust
"Cultural, age and gender biases melt away quickly when capabilities and a genuine desire for positive outcomes are demonstrated."
"Customers feel more at ease buying when their demographic is represented in-store."
"Retail is THE interface industry between products/services and people ... Diversity is a natural outcome on the people side of that equation..."

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4 Comments on "Study: Diversity works for retail stores"


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Lyle Bunn (Ph.D. Hon)
Guest

Diversity and talent are not mutually exclusive, and talent with intent will win every time. Cultural, age and gender biases melt away quickly when capabilities and a genuine desire for positive outcomes are demonstrated. Lest you think that I am living in La-La Land, such biases can indeed be reinforced when failure to serve is evident. Businesses cannot overlook any sources of talent as areas of technology and analytics continue to emerge and be embraced by retail.

Jasmine Glasheen
BrainTrust
Jasmine Glasheen
Principal Writer & Content Strategist, Jasmine Glasheen & Associates
5 years 5 months ago
Customers feel more at ease buying when their demographic is represented in-store. This is especially true when selling cosmetics and apparel to people of different ethnicities, ages and body types. Although a good cosmetics associate can shade match any skin color and a good clothing associate can style any body type, the harsh reality of the situation is that many associates aren’t fully trained in their area. This leads to embarrassing and somewhat heartbreaking instances of associates being unable to find cosmetics for someone who is differently-complected than themselves, or customers feeling ostracized from certain stores due to their size. Not only is diversity important in hiring, but in the inventory itself. All sizes should be presented together so that plus-size customers (the majority) aren’t shuffled off to a side room to buy their apparel. Cosmetic departments need to carry all foundation shades and adequately train staff on where to find them. Diversity is particularly important due to lack of training. Many diverse customers, or customers from perceived minorities, have had mortifying experiences trying to… Read more »
Gene Detroyer
BrainTrust

I don’t know if this issue is directly applicable to a retail store. But study after study in general business shows that the more diverse a company is, from top to bottom, the better its performance.

Mohamed Amer, PhD
BrainTrust
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
5 years 5 months ago
A recent Leaders 2020 study conducted by SAP (my employer) and Oxford Economics identified five keys necessary to thrive in the digital era. One of these is that companies build a diverse, inclusive culture and environment. A more diverse workforce does produce better results across all organizations. Retail is THE interface industry between products/services and people. Diversity is a natural outcome on the people side of that equation and to better understand and create meaningful engagement with the consumer, it only makes sense for the retail industry to actively pursue and promote diversity all the way up to the C-suite and board levels. More work can be done in this area. With the ongoing digital transformation hitting all industries, and as retailers look to attract and promote the next cadre of leaders, the need for a diverse and inclusive culture becomes more pressing. At its core, retail is still a people business — from front lines at the store to merchants at headquarters, they must be in sync with and understand the implications of technology… Read more »
wpDiscuz
Braintrust
"Cultural, age and gender biases melt away quickly when capabilities and a genuine desire for positive outcomes are demonstrated."
"Customers feel more at ease buying when their demographic is represented in-store."
"Retail is THE interface industry between products/services and people ... Diversity is a natural outcome on the people side of that equation..."

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