Retailers, keep your staff: Five lessons from cosmetics king Napoleon Perdis

As reported by Fairfax, Perdis said stores need to “bite the bullet”, invest in staff and improve the consumer experience or else customers will have no reason to shop in store.

”Department stores are going to have to bite the bullet further with increasing their staffing levels so that customers feel there is a reason to go in to them; it’s expensive upfront but not expensive long term.

”At the end of the day there has to be a major incentive for a woman to go in the department store and feel beautiful,” Perdis says.

Perdis, who has a distribution deal with David Jones, is back in Australia after a trip to the United States where he signed deals with department stores Bergdorf Goodman and Neiman Marcus to stock his beauty and cosmetic lines, an historic deal making him the first Australian to break into the United States luxury cosmetics market in almost a century.

His comments will no doubt be a thorn in the side of retailers who are struggling to maintain customer service levels alongside falling sales. But as several experts on SmartCompany have attested, keeping staff is crucial when battling against online-only competitors.

Here are five lessons you can take away from Perdis’ comments and by focusing more on your own staff:

Simply keep them employed

It’s been a tough period for retailers with Christmas sales down 0.2% in December, but Retail Doctor Group chief executive Brian Walker says Perdis is right: in the long term, businesses can’t afford to cut back on staff.

“It’s well documented the cost of losing staff – you need to develop a differentiated experience to online.”

“If it’s not a differentiated experience (one that is aspirational and inspirational) consumers will compare it to the convenience of online shopping,” he says.

Invest in staff training

Walker says it’s not as simple as just maintaining staff numbers, the staff also need to be properly trained.

“You’ve got to have the right staff. It’s not as simple as just keeping people, you must ensure they are well trained and motivated with a good focus and have a good rewards system in place.

“Customers are looking for relationships and quality service from an in-store experience,” Walker says.

Spend money now, save money later

Perdis and Walker agree: properly training employees should be seen as an investment as much as it is an expenditure.

Perdis says Australian department stores desperately need to train their staff beyond using a cash register. “You have to actually reinvest in humanity to give you the returns,” he said.

Various research suggests a large portion of the cosmetics sector has moved online, making the investment all the more important.

Find other ways to cut costs

Walker says retailers should look for other means to cut costs which don’t impact the quality of their staff.

“Businesses must zero in on productivity and the metrics of the business. They must make an effort to understand customer feedback and identify why they are losing sales,” he says.

“This could be things such as competition, product knowledge or sales training. Your business metrics must be in line with your business strategy.”

Have a presence online and in-store

Research indicates consumers want to be able to shop online and have a physical experience. Walker says hope for traditional bricks-and-mortar stores is not lost, but they have to adequately cater for the consumer.

“When you look at online businesses the top 20, particularly in the US, have physical stores as well because they service different needs.”

“Consumer insights show us that 85% of consumers want a physical experience. People want to be able to touch the products and speak to people – they want to have an experience.”

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