The luxury industry is experiencing a difficult year. With a few exceptions, the majority of the brands are reviewing their sales forecast, expecting lower performance compared to their original budget.
It’s undeniable that for the last few years, luxury brands have been worrying mainly about how to create Chinese/Russian friendly products (not necessarily very innovative ones) and build huge and futuristic stores. We can’t say that the same commitment has been dedicated to the key elements of people recruitment and development.
Let’s be frank: in the stores we have seen a little of everything. “Great standing” and “personal image” seemed to be the keywords for hiring sales staff. Therefore, a good-looking sales person with some language skills was enough to become a brand ambassador (or even a store manager).
We can’t say that image isn’t important in luxury. It is. However, selling is not exactly the same than walking on a runaway. When it worked, it worked for a while. Sales people didn’t have really to sell the products: customers from all over the world (mainly from emerging markets) were just buying them. They needed recognisable products (if possible at lower price) to receive acknowledgment from others.
Tourists’ turnover was so important that there was no big effort from the brands to retain local customers. “Increase the price: Chinese and Russians will buy anyway” (some brands increased a continuative bag price of 50% in less than 5 years).
However, when the touristic flow stopped, Russian and Chinese started becoming more savvy and even more sophisticated, luxury brands started holding accountable the store teams, asking for customers retention actions that were not taken too seriously until the tourist flood was enough to achieve great sales results.
Now, how do you expect sales team to act if they have not been hired with the right values, properly trained and followed up?
It happened in Europe, in the Middle East, in the USA. It even happened in Hong Kong where the thin line between success and failure has been marked for year by the shoppers from Mainland China.
When hiring sales associates, luxury brands have often focus on the “what” (the experience in other luxury brands) more than on the “why” (the purpose and values that the individual might have matching the company ones).
Even if they know that the service performed in other brands would not be in general superior to theirs, luxury brands prefer in general to hire a candidate from a competitor than a potential coming from different sectors.
The process is simple: hire the person based on his/her CV, give basic induction training program, some basics on products, procedures and computer system. After a couple of months the store manager finds out that sales associate has a nice CV, but not meeting company performance standards. The store manager informs the HR and together they decide to look for a replacement.
Store teams are often understaffed. Hiring process take longer than expected and the new candidates do not seem really much better than the people already working in the store.What happens is that after a while the store manager start thinking that he would have to train again the new person on all the basics, procedures and systems. It would take time (and he has no time) and no assurance that the new sales associate would be performing better than the previous one. Therefore, the store manager switches his view on the poor performer: “Well, he’s not that bad after all”. In the reality, the performance didn’t change or improve. It just changed the perception of it. The management just took the worst business decision: compromising for mediocrity.
With mediocrity it’s impossible to engage customers, create loyalty and achieve great results.
I believe it’s time for the brands to focus really on the retail activities starting with a more strategic HR approach on people.
“Get the right people on the bus and wrong people off the bus. Once you have the right people on the bus (your business), in the right seats (jobs), then you can decide where to drive it” Jim Collins describes brilliantly in his book “Good to great”.
Too many times the role of the sales associates is relegate as the last in line in the business. Often is considered a trampoline for other positions. As luxury brands are investing so much in retail development, should not be the “sales ambassador” a key strategic function for their business? Should not be the “ambassador” among the people who better represent and convey the values of a nation, a company or a brand? Should they reconsider the job descriptions and better identify the right profiles to hire?
Are you taking “on the bus the right people?”
I’ve met a lot of amazing sales associates around the globe, passionate and in love with the brands that they represent. At the same time, there are currently still many “intruders” in the profession. People not passionate about clients in store and indifferent towards the brands they sell. It seems like they just want to get hired by luxury brands to get an employee discount on products. They just bring down the reputation of a difficult job that requires passion, resilience and perseverance, making it even more difficult for those sales associates that proudly wear daily the uniform of the brands they represent.
“Are you sitting the right people in the right seats?”
It’s natural that the career of a sales associate should have a development. Now, when this goes towards positions like the Store manager and Retail manager that is quite understandable and follows a linear process. However, when the companies consider a promotion the sales associate development towards a staff position (like a visual merchandiser or an assistant buyer) out of the store I get particularly lost.
“Are you sitting the right people in the right seats?”
When moving to positions like VM or assistant buyer, the sales associate has a salary increase and also the possibility not to work weekends. In other words, the company is implicitly saying that a staff function is more important than the sales associate’s. But is not the sales associate that generates business for the organization?
Therefore, it’s the company itself saying on one hand that the sales associate job is one of the most important for the brand, but on the other side considers the sales associate function the lowest in the retail value chain.
That’s why people with potential often want to move out of retail. They don’t see a future there.
Brilliant people with great customer relations skills are moved out of the stores, while in store remain several of those sales associates less prepared and with less customer relations skills. No wonder why so many brilliant people move out of luxury retail after a while. And no surprises if luxury retail experiences a high personnel turnover.
Don’t you think it’s a sort of paradox? Companies invest millions in creating beautiful products and amazing stores to let the less qualified people to interact with their customers?
Would not be more convenient invest a little less in store design (important but often imperceptible to the eye of the consumer) and more in people? Designing real talent programs, with proper periodic training programs to improve the relational competencies of the sales teams and following up on the training would be a real step forward. Not all the people working in retail are just motivated by a sales commission.Often they want to learn and grow.
Considering the importance that retail has for luxury today and that the majority of the positions available are within the store, the sales associate role should become a landing point and not a trampoline.
Creating the conditions to attract the best talents and make them stay (happy) in retail would be the ultimate goal for luxury brands.
As an old refrain of 1975 AC/DC says: “It’s a long way to the top if you wanna rock’n’roll” . That sounds like the perfect anthem for luxury retail today.
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