The Impact of Today’s Labor Dynamics

As a best practice, we regularly conduct a comparative analysis, based on tens of thousands of data points, of all programs industrywide to ensure that we have the best market intelligence to assist in program design and execution. Our objective was to understand current pay scales and incentives (if any), observe shopper engagement, and gain feedback directly from the frontline so that we can offer the best possible comparison point to what we know today and inform our approach and modeling for what we believe will happen in the future. 


Not surprisingly, we discovered that the pay rate for markets varied, presumably to manage cost. Moreover, from the representatives’ perspective, we found that there is also quite a bit of confusion on pay for performance and/or commission models. 


Through our experience, we benchmark turnover rates across similar programs and are seeing many brands experiencing “bleeding budget” issues related to increasingly higher turn-over rates for part-time and seasonal staff. We believe that this deteriorating trend will continue – and accelerate – over the next year and beyond, given the current trajectory of the labor market, overall macroeconomic realities, and an increasingly more sophisticated, digital-savvy connected shopper.  


In competing for high quality talent at retail in this new and dynamic age of retail, we believe that following must be top of mind: 

  • Wages have risen 2.9% in the last twelve months

  • Unemployment is at a record low

  • New, highly flexible work models have been introduced by companies such as Uber, Lyft & Door Dash

  • Amazon, CVS and other major retailers are announcing plans to systematically increase their hourly rates over the next 12 months

  • Legislation is being debated to continue to pressure companies to drive up wages for their staff

The implications cannot be understated. Today’s shoppers expect to be engaged. The present and future of retail is about shopping versus buying. Shoppers now and in the future come to retail for experiences – informed, passionate, entertaining, memorable and personalized experiences. Retailers are trying to create Amazon-proof models to stay viable. They are increasingly viewing their stores through a changing paradigm – it’s no longer about sales per square foot – and smart brands are tapping into evolutionary thinking in how to partner with retailers to address the pain points that these disruptive changes create while ensuring that physical stores deliver a strong return on investment. We are all facing the reality that consumers don’t simply look at retail in silos – it’s all shopping – so it’s more about the experiences that will lead to a sale where and when the shopper chooses. In measuring overall ROI, this will require a gravitational shift from a purely transactional sales paradigm – which is how “assisted sales” or “demo day” programs have been historically defined – toward more of an experiential brand marketing offering.   


By way of comparison, consumer engagement programs designed to deliver highly engaging direct-to-consumer experiences in “non-traditional retail” pay average hourly rates averaging between $18-$20/hour, far above the average for retail. As the expertise required to deliver compelling consumer experiences increases, there is an obvious convergence on the labor market that presents new challenges in recruiting from the available talent pool. In short, we believe that there is a need for re-thinking and re-invention in designing and executing in-store retail sales enablement programs. Given the realities and trends referenced above, as an agency we are constantly investing in and interpreting available data to ensure that the very best talent available for the client’s budget can be attracted and retained, that the coverage strategy is smart with the greatest opportunity to impact sales, and that investments are centered around enabling the talent who are ultimately an extension of the brand.

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