After four years of change we need new ways to reward store associates

I spent part of last week with senior buyers and CEOs of retailers in the mass merchant and specialty retail sectors. It was interesting seeing the guarded optimism the group had for the year ahead.

After four years of challenging change, retailers’ internal costs are under control. External supplier negotiations and direct sourcing has lowered shelf prices so that they are globally competitive without eroding margins to unsustainable levels. Store volumes and footfall is pretty healthy.

All we need now is a slight increase in volume, a slight increase in mix, and a couple of 1% or 2% price increases and EBITDA (earnings before tax, depreciation and amortisation) will be significantly improved. What we’re seeking to happen locally is the classic end-of-tightening-cycle behaviour we’ve observed in the US throughout 2012.

However, one area that retailers still need to boost is rewarding store associates to change their behaviour and bring service alive in stores. This should be a priority for traditional retailers so that they strengthen competition with pure online competitors or better harness their own store’s new omni-channel services.

Tom Herbert-Doyle is one of our most creative associates in CROSSMARK. I’ve known Tom for a decade. As I’ve got older I’ve needed to actively set my mind to “listen” to truly allow new and innovative approaches to shopper marketing opportunities filter through my very experienced (read jaded) soul.

Outside of work, Tom hosts a global online radio show, lives social media, and thinks with the right hand side of his brain. Below is a piece he wrote, unprompted, for our monthly client eNewsletter:

Gaming has come of age – not the gaming done at a pokie machine in the back room of a pub – I’m talking about the kind that used to be the resort of teenage boys huddled over small grey boxes making plumbers jump on turtles and mushrooms. I’m talking about video games.

With the launch of the Wii and now the rise of mobile games, the reach of video games and gaming culture has spread outside its once insular culture and into the mainstream. I imagine everybody reading this will have played a type of video game in the last couple of weeks, regardless of the device.

This concept of gaming has now started to expand out beyond our devices and into other elements of our lives, making its way into how we interact with brands (Nike+), retail stores and food outlets (Foursquare) and even as far as treating patients in hospital (Fruit Ninja Kinect, Neuroscience Research Australia). In Germany, attaching a high score mechanism to a bottle recycling bank increased recycling from two deposits a night to over 100.

This is commonly known as ‘gamification’ – bringing the gaming concept, including achievements, scores and levels, into other aspects of our lives.

An area where this has a perfect fit is tailoring games and gaming concepts into engagement models for our brands – whether it is targeted at the retail staff selling them or the customers buying them. Retail staff incentive and performance programs are the most obvious places to start as they are inherently competitive and adding layers of gaming into them is a logical step.

Creating virtual ‘badges’ for achieving additional targets, presenting results in a ‘high score’ leaderboard and creating levels within the program for high achieving staff bring the commonly known gaming paradigms into the program. We even developed an iPad app game for a client that supported in-store training by letting the staff member take control of their own store with high scores rewarded with currency to buy products from a catalogue.

Omni-channel, new products and new ways of engaging with shoppers have all been born over the past four years. Perhaps we need to think of new ways to train and reward retail associates for those new skills.

As CROSSMARK CEO, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia and across the world. His international career in sales and marketing has seen him responsible for businesses in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands.