Brand Strategy

Want To Build Your Retail Brand? Train and Hire More Employees.

Don’t fire. Hire.

Yep, it seems counter-intuitive in these cost-slashing days, but hiring and training more employees to work your retail business can increase sales, customer satisfaction and profits.

James Surowiecki, in the March 26 New Yorker, “The More The Merrier” cites a Harvard Business Review study that analyzed four low-price retailers.  Costco, Trader Joe’s, Quick Trip and a Spanish supermarket chain named Mercadona all have higher labor costs than their competitors, but are more profitable than most of their competitors.

A similar study published at the Wharton School arrived at a similar bottom line resulting from hiring more employees: “Stores that were understaffed to begin with benefitted more, stores that were close to fully staffed benefitted less, but, in all cases, spending more on workers led to higher sales.”

The author cites two examples of major American retailers whose cost-cutting, employee-firing strategies were flops: Circuit City and Home Depot. The electronics super-store chain is out of business, while Home Depot has replenished the ranks of orange-apron employees.

If your brand is about retail customer service…employees are a huge part of your brand.

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