Challenges and trends in retail attraction
By Sarah Sturgess
Over many years, we’ve helped retailers of all shapes and sizes to articulate employer brands. We’ve also delivered attraction marketing campaigns in retail markets ranging from food and home improvement to fashion and charities. Recently, it struck me how similar the challenges they all face today are.
We help our clients to solve these problems, to be the first to champion a different approach and be at the forefront of the market. So, I wanted to share the trends that we see through our work at SMRS.
Women in retail management
-60% of retail employees are women and 85% of all purchases are made/influenced by women. Yet staggeringly, only 20% of executive teams and 10% of executive boards are female.1
-Just 46% of retail businesses’ chairmen said they have enough female executives within their talent pipelines to ensure diverse leadership over the next five years.
-The number of women hired as retail chief executive declined in 2015. Of the 45 employed, 15% were women, compared with 25% in 2014.2
The key issue is that there aren’t enough female candidates, but very few retailers seem to be doing much to advertise job shares in retail management, despite women who return from maternity being offered reduced hours. It asks a lot of questions. Why not overtly target women already in a part-time management role? Why are women not progressing into senior management retail roles – what’s stopping them? Will an increase in apprenticeships in retail, driven by the new Levy, tackle this issue by paving a new route into management?
Hot spot locations
Though high streets are the first port of call for people buying goods offline, in the last five years, offline retail footfall has shrunk between 3-5%. Only in retail parks has customer footfall actually increased, by 5% in the last two years.3
Key locations are still key for recruitment though. And whilst the top retail locations in terms of rental cost are in Central London, the best places to build a new retail outlet are very different. According to the Property Week Hot 100 ranking, the best locations when judged by potential are:
Remote. Affluent. Deprived. High concentration of retailers. All these types of locations cause big issues for recruiting retailers. The go-to solutions can often be the same: more money thrown at job boards and recruitment agencies.
Instead, these issues need tackling as unique problems with a personalised approach. Looking in an affluent area? Think broader and gain an understanding of that specific location. Instead of wasting your time and budget with a ‘spray and pray’ approach, pinpoint the most suitable talent. For example, we use postcode analysis and local market data to discover where the people you need might live. However small the number, they’ll be there.
However, if your challenge is the size and strength of the competition, take a close look at your offer, your unique proposition, who the people you need are – and then match their needs.
Currently, the retail sector has a comparatively low-qualified workforce, with only 22% holding a qualification at or above QCF level 4/SCQF level 8-92 (compared to an all-industry average of 41%). Predictions suggest that by 2022, qualifications at this level will be a pre-requisite for 34% of retail jobs and half of all jobs.5
Some retailers focus solely on the active job seekers. This audience often moves jobs more frequently for small salary increases – the result being high attrition.
Success comes to those who think carefully about the type of person who’ll fit best in their business and target them with well-crafted messages. Information on the values, behaviours and habits of a specific demographic can all be cleverly fed into campaigns to target passive audiences. They might not be ready to move straight away, but by using remarketing tactics to keep pushing different messages, and an engagement strategy to keep the conversation open, they can be persuaded if you’re the right match for them.
Big brands win
-Employer branding can increase your stock prices by 36% (Lippincott via LinkedIn)
-Employers with strong employment brands see a 43% decrease in cost per hire (LinkedIn)
-69% would not take a job with a company that had a bad reputation, even if they were unemployed (Glassdoor)
-84% would consider leaving their current jobs if offered another role with a company that had an excellent corporate reputation (Glassdoor)
Perception is reality in the world of branding. Big retail brands with lovely food or hot tech have an instant appeal to the masses and have to do very little to attract the people they want. Their challenge is likely to be volume. Many retailers don’t have this instant appeal though and are deemed less cool.
Employer branding can help to reposition this kind of business. Whilst most retailers have some sort of content out there, there’s so much more they can do to share their stories by taking a leaf out of their consumer brand counterparts. One of our clients once got the green light for a new employer brand and careers site with the argument that, “you wouldn’t put last season’s stock in the window, so why are we not keeping potential candidates as up to date as our customers?” It certainly did the trick.
Too much of the same
As many as 1.14m people aged 65 and over were employed in the UK last year, up 3% on 2014 and more than double than 2004. More than one in 10 people aged 65+ were working either full time or part time last year, four years after the abolition of the default retirement age, and one in four retail workers are aged 50 and over.6
Retail brands work hard to target their perfect consumer. But this can have a negative effect on those who’d be a perfect employee. For example, shiny tech and high fashion retailers are unlikely to be naturals at reaching the older audience – yet they risk missing out on brilliant candidates and diversifying their business.
Equally, some retailers have a great heritage in attracting older people, yet would love a broader spread of ages. We’ve profiled candidates entering our clients’ careers sites and it is absolutely the case that the retail audience gravitates to the brands they relate to and ignore the others, unless they’re actively targeted.
The government even has a taskforce responsible for getting older people into work. Andy Briggs, CEO of Aviva UK and Ireland Life, was appointed as Business Champion for Older Workers last year. I’d love to see retailers partnering on age diversity, using industry forums and government initiatives to start to share a little.
I’m astounded when retailers have clear plans for new store openings, distribution networks and omni-channel transitions, but not thought to mention it to the resourcing teams. Though it might seem obvious, better communication allows more time to think and plan.
The rate of change within the retail workforce is also set to quicken as the digital revolution reshapes the industry – helped by more leases being up for renewal and the growing cost of labour vs. the shrinking cost of technology, especially following the National Minimum Wage increase. Together, these effects could mean there are as many as 900,000 fewer jobs in retail by 2025 – but those that remain will be more productive and higher earning.7
Many UK retail employers rely heavily on EEA workers. In fact, these 1.6m people make up 6% of all retail employees. They’re also more likely to work full time and in the private sector.8 Whilst some sectors have a higher proportion of EEA-born workers, this will inevitably impact on retail as they start targeting people from this sector.
In 2015, 36% of total foreign-born employees, and 45% of self-employed foreign-born workers lived in London. Those are not all EU nationals, but it shows the skewing effect of London on foreign-born workers – and we know from our work with large retailers in the metropolitan area how competitive retail recruitment is in London already. This still means that London retail is going to be particularly impacted by Brexit at a time when tourist and consumer income will be more important than ever.
These might not be challenges for all retailers, but evidence tells us that many retailers need help to start thinking differently. To build clear propositions to candidates. To tell your story. To promote you in areas where nobody has heard of you. To compete head on with the best brands. All by taking a fresh approach, doing things differently and being the clever ones. As technology advances, attraction is about cutting through the noise – not following, but leading the way. And, ultimately, finding your kind of people when your business and the thought of moving have never even crossed their mind.
I’ve avoided naming names here, but we’re always happy to share our knowledge and understanding of the retail market, as well as case studies that show specific clients who’ve made significant progress in their attraction. If there’s enough interest, we could even get some of you retail recruiters together to share ideas and views. If lots of this is already happening in your circle of trust, I’d love to be invited in!
Until then, we’ll look out for you as we share more of our case studies and attraction approaches at these events.
1 Source: Report by Women in Retail / Elixxir “The commercial advantage of more women in the boardroom” June, 2016.
2 Source: Korn Ferry Hay Group’s annual chairmen’s report.
3 Source: Springboard
4 Source: Property Week [Rather than basing the ranking on the premise that the biggest, or most affluent, towns and cities offer the best opportunities, the ranking looks at a wider range of variables to highlight some of the secondary destinations that might not be the first thought for developers, such as ‘Headroom’ (capacity); Population growth; Residential catchment size; centre dominance in catchment and Retail mix to catchment]
5 Source: The UK Commission for Employment and Skills – Skills and Performance Challenges in the Retail Sector
6 Source: DWP
7 Source: British Retail Consortium, 2016
8 Source: Social Market Foundation