High-end Retail Companies Experience Workforce Exodus as Over Half of Employees Intend to Depart Their Positions
In the world of elite shopping, everyone acknowledges that a retail store isn't just a place to purchase goods; it should be a full-fledged brand immersion experience. The retail staff, serving as the front-line brand representatives, wield significant influence over this experience.
However, a comprehensive survey involving 12,000 employees across 12 luxury brands globally revealed widespread dissatisfaction among luxury retail employees. A startling 51% of them are intent on departing their current employers in search of positions that accord them more autonomy, appreciation, and a better work-life balance. As per consultancy CXG.
The quality of the luxury customer experience (CX) is closely linked to the employee experience (EX). An unhappy employee inevitably leads to an unhappy customer.
The research conducted by CXG suggests that luxury brands are failing to meet the expectations in the realm of EX and should rectify the issue before it negatively impacts CX. In fact, as per Bain, the luxury goods market shrank by 2% this year – the first time since 2008.
“Our research indicates that the luxury retail sector is at a critical juncture. Luxury brands must refine their Employer Value Proposition (EVP) strategies to attract and retain top talent capable of delivering exceptional luxury experiences,” said the founder and CEO of CXG, Christophe Caïs.
Employee Experience Insights
CXG has recently published a 50-page report titled "The Advisor Effect: Driving Retail Success by Re-Imagining the Role of the Client Advisor," which explores the results of its Voice of the Team survey and proposes strategies for luxury brands to boost employee engagement and recruitment.
Broadened Job Duties
Retail employees are confronted with growing demands to excel in digital retail skills, as well as demonstrate exceptional emotional intelligence to cater to and anticipate customer needs.
In addition to serving clients on the sales floor and handling e-commerce customers remotely and through social media, retail employees must:
- Engage digitally in marketing and clientele cultivation online, offer personalized recommendations remotely, manage product returns and exchanges, create social media content, and analyze data to identify trends and customer preferences.
- Establish personal relationships with clients by understanding their lifestyles and preferences, enabling them to deliver personalized, concierge-style services, and offer after-sales support.
- Act as brand advocates through storytelling and expertise in the brand’s evolving product line and overall luxury industry trends.
- Meet sales and business development targets and implement customer retention strategies.
The report explains that the job responsibilities of luxury client advisors have expanded substantially. Modern advisors now need to engage in digital interactions and relationship management, while mastering storytelling and customer relationship capabilities.
“This evolution requires a balance of emotional intelligence, adaptability, and technical prowess to enhance customer experiences,” the report concludes.
While luxury brands increasingly demand digital proficiency and engagement from their employees, CXG’s research finds that soft/emotional skills set an employee apart from their peers and contribute to remarkable customer experiences. However, such skills are hard to identify during the recruitment process and challenging to teach.
“Advisors who are passionate, proactive, team players, relationship builders, and conflict resolvers who can easily adapt and exhibit empathy are most likely to succeed,” the report suggests.
Grievances
Perhaps, the discontent among luxury retail employees arises due to employers placing an excessive emphasis on quantifiable hard skills and undervaluing intangible soft skills.
Over 30% of luxury employees surveyed expressed dissatisfaction with their job, only 38% believe they work in a motivating environment, and fewer than one-third (31%) believe they have growth prospects with their brand.
Just over 40% feel a sense of disempowerment at their jobs, while 33% feel undervalued, and more than half (61%) seek a better work-life balance.
The Luxury Institute, specialized in luxury industry research, supports the high levels of employee discontent and provides context relating to challenges faced by front-line luxury goods associates in the post-pandemic era.
“They are dealing with customer anger and mistrust stemming from low-quality goods, exorbitant pricing, and poor client experiences,” shared Luxury Institute founder and CEO Milton Pedraza.
“They despise the robotic, scripted training or the lack of any training. It’s a perfect storm of negativity, and the associates are the targets,” he continued.
Seeking an Exit Strategy
Feeling these frustrations, 51% of all those surveyed are actively seeking alternative job opportunities. This trend is especially prevalent in the USA and France, where 60% in both countries are planning to leave their jobs.
“These high turnover rates are detrimental to the industry considering the pivotal role of client advisors in the customer journey,” the report concludes.
It underscores its point by revealing that 68% of a brand’s Very Important Clients (VICs) follow their client advisor if they move to a new brand, according to Bain.
Consequences
The potential exodus of such a large number of retail employees will have severe implications for luxury brands, considering Bain reports that 53% of luxury goods revenues are presently made through direct-to-consumer retail channels, more than double since 2010.
According to retail expert John B.R. Long, these circumstances couldn't come at a worse time for luxury brands.
“Luxury is presently experiencing a downturn, and during tough times, demands on employees intensify, particularly on the front lines,” he said.
"Given that the industry operates on a commission-based system, this means that employees' earnings from commissions are reduced, leading to a more competitive atmosphere within the store as associates contend for fewer transactions, customers, and earnings. CXG proposes an alternative approach for rewarding retail employees, moving away from solely commission-based pay based on sales volumes, towards a 'hybrid' method that incorporates sales metrics, customer satisfaction scores, repeat purchase rates, and other indicators of customer loyalty.
As per CXG's Caïs, eliminating the pressure to sell high-priced items allows sales staff to prioritize long-term customer satisfaction, cultivate loyalty, and enhance team performance.
Beyond Financial Rewards
Beyond the privilege of working with prestigious luxury brands, access to high-profile clients, and the opportunity to handle exclusive products, employers must also offer opportunities for career advancement, such as global opportunities and advanced training and development programs.
The report stresses that employee retention necessitates a comprehensive, multifaceted approach beyond conventional compensation packages and basic career progression.
"Luxury brands must equip their advisors with the necessary skills to excel in every aspect and simultaneously cultivate an environment that is so enriching and rewarding that they would never want to leave," the report suggests.
Trust is Key
However, CXG studies reveal a 'fundamental misalignment' between luxury brands' perception of the work environment they offer and the associates' perception of the work environment they experience. This misalignment drives approximately half of luxury brand retail associates to seek alternatives to their current roles, whether shifting to another luxury brand or a different industry.
Like retail employees globally, luxury sales associates seek expanded career growth opportunities, along with both financial and non-financial rewards, including recognition, flexibility, work-life balance, and more meaningful and purposeful careers.
According to Pedraza, CXG's findings are not surprising due to the low trust levels between employees and employers across various industries and institutions. The only solution, as Pedraza concludes, is for employers to commit to rebuilding high trust among their team members through concrete actions, rather than just reassuring words or empty promises."
Luxury brand employees, tasked with delivering a full-fledged brand immersion experience to customers, are feeling overwhelmed by the broadened job duties required in the digital age. These duties include mastering digital retail skills and emotional intelligence, engaging in digital interactions, offering personalized recommendations, and acting as brand advocates. However, the survey by CXG revealed that 31% of luxury employees believe they have growth prospects with their brand, only 38% believe they work in a motivating environment, and 61% seek a better work-life balance. Luxury brand retail operations, therefore, need to refine their Employer Value Proposition (EVP) strategies to attract and retain top talent capable of delivering exceptional luxury experiences, as suggested by CXG.
