October 26, 2011 – 3:21PM
If you walk into Tokyo clothing store called 109 Men’s and remove a shirt from the rack for a closer look, a chip embedded in the hanger is activated, firing up a digital display on a screen on the wall just above your head.
The display shows a selection of trousers, jeans, shoes or accessories that a style afficionado has decided would go well with the shirt you’re looking at.
As you walk along the rack picking up different shirts, a new display with selections of complementary merchandise pops up each time.
The future of cross-selling? Maybe. But there is a broader point here, and it has to do with how human beings are being pushed aside in the race to offer more contemporary retail experiences. It has implications for the kinds of skills that will be required of the salesperson of the future.
In the past decade employment in the Australian retail sector has grown by about 21 per cent, from 1.02 million to about 1.24 million.
During the same period sales jumped from $127.2 billion to $214 billion, or about 68 per cent.
This translates to an increase in sales per person employed of 39 per cent, which is roughly the same as the hourly cost of employing those workers. Since the average number of hours per employee has fallen slightly, sales per hour worked have increased by just over 44 per cent.
Sounds pretty good but actually in real (inflation adjusted) terms it translates to a very modest 1 per cent annual growth rate over the 10-year period. As the retail technology revolution has gone into overdrive in other countries, the traditional assumption that hiring more people translates into better service and higher sales is making room for another, more contemporary and iconoclastic school of thought â€“ namely, that less is more.
Fewer people can be better than more on the condition that they are qualitatively distinct.
What does â€œqualitatively distinctâ€ actually mean? New technologies in retail, as in any industry, causes the kinds of skills that are of particular importance in a retail salesperson to become more specialised. Customers now increasingly arrive at retail stores armed with better information about product characteristics and prices than the sales associates themselves. The latter may no longer be needed, trusted or relied upon to supply such information.
And in the case of store 109, the associate isn’t even given primary responsibility for up- or cross-selling.
So how does a salesperson add value at all?
By honing two kinds of skills: the first set of skills are the â€œsoftâ€ or â€œpeopleâ€ skills to improve the shopping experience and provide a sense of place.
The second set of skills are troubleshooting skills. When something goes wrong, or the technology can’t deliver the goods, it’s up to the human salesperson to pick up the ball. This is exemplified by the assistant who prowls the self-service checkout lane at your local supermarket, or the personal banker who can get you around roadblocks in conducting certain internet banking transactions.
Doug Stephens, president of US consulting firm Retail Prophet and a leading proponent of the new school of thought about retail service, puts it this way: â€œCustomer service as we know it is evolving to become less about functional skills and more about cognitive reasoning and emotional intelligence â€“ the really hard stuff!â€
The salesperson of the future then, whether in a bricks-and-mortar store or an online store, will not be a generalist. Rather, he or she will be relatively highly skilled compared with today’s all-rounder. A people person and a problem solver, able to take over from where the technology leaves off.
We will need fewer of these people but they will be more highly evolved, trained, valued and paid than today’s sales army.
Michael Baker is principal of Baker Consulting and can be reached at email@example.com and www.mbaker-retail.com.