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Retail Management- The Art Of Handling The Internal Customer

Professor K.J.George

Birla Institute of Management Technology Greater Noida


Country- India

Abstract-Retail as a business is prevalent since the ancient times, in its unorganized avatar it has
mushroomed and succeeded in almost every town and city. It seemed an easy business when it
became a part of the organized business houses menu, but soon to realize that it is an easy
business but had to be done the difficult way. The paper explores the utility and importance of
the Internal Customer that is the employees. A conceptual framework to study the importance of
training, motivation and retention of the employees. To understand how to lessen the pressures
experienced by the Retail Employees and develop a tool this is effective for development,
validation and refinement of performance of the Retail employee. The study also explores the
possibility to view the Retail Customer as a partial employee and to use them for furthering the
profitability of the organization. With all companies buying and selling in the same environment
what will differentiate the men among the boys will be how the “INTERNAL CUSTOMER”
handles and uses the “EXTERNAL CUSTOMER”.

Keywords- retail, employees, train, gain, people, ERM, relationship

Retail is about detail…. It is the easiest business but has to be performed in the most difficult
way. This could be a contradictory statement. Just to put things in the right perspective, Retail is
easy because it involves buying, stocking and stacking of merchandise and selling to a customer
who has the need for it, then why would it be difficult? The retail environment is fragmenting.
Consumers want personalized shopping experiences. That means more stores, more channels,
more choices and an increasingly segmented customer base. How to maintain market share and a
competitive advantage? Retailers have to focus on customers because they are their most
valuable resource, says business guru Martha Rogers. Among all of their resources like brand,
employees, products, and customers, only customers bring in revenue, another reason why it is
difficult just for the simple reason that no two customers would be similar or to say no two stores
would be similar. It should be in tune with the WAL- MART way that every store is a chain in
itself. When being in the service industry the relevant P’s like price, place, promotion, and
product are important but the P which is the most important is PEOPLE. Here I mean both the
External as well as Internal People. Because if the people working in the stores are not motivated
and happy about their work culture than they will not be able to keep the customer happy

Strategically retail decision making involves excelling in geographic expansion, developing

supply chain, building the brand, understanding category profitability and enhancing the value
proposition to the customer. The whole action happens in the front end, how much importance or
time we give to the PEOPLE or the front end staff present there. An induction which just
primarily talks to him about his DONTS, cant come late, will have to work for 12-13 hours, no
leaves, have to shave, dress properly etc. Are we really gearing up the person who will be the
face of the organization to have a career and growth path out of what he or she is going to do?
They normally do not have any bonding with the organization. They are basically and only
working for the salary which will accrue to them in due course of time. But can we blame them?

The Internal People who are working in the front end are-

The eyes, face, ears of the organization

They face the customer
They are the ones who sell
They bring the satisfaction
They get the retention

But if we look closely what do they get in return

No Money
No Motivation
No Promotions
No effective training.

So where is the problem? Firstly The problem lies in the nature of the industry, the Retail
Industry has no dearth of work force which make the companies very complacent, that if this lot
leaves than there would be 1000’s who are ready to join may be at a lower salary structure. They
are not looking for skill sets. They want bodies not minds, and as the case is it is much easier to
hire bodies than hiring minds .Secondly it is a low wage sector so people leave and join the shop
floor because the moment they get a few thousands more they will leave their current job. Retail
front end is a sector which is LOW skills- LOW wages- HIGH work hours- LOW satisfaction.

Thirdly the problem that the company faces because of the attrition rate, as it is a low skill job
people tend to leave their job as they see no long term gain in sticking to one organization, this
has a multitude effect on the organization when it comes to training, the Company feels what if I
spend all the money on the training of this person and what if he or she does not stick to the
organization in the long run, what they fail to see is the bigger picture what if he or she is not
trained and sticks to the organization in the long run.. That will be a bigger problem
So what would be the solution to the problem?
In today’s times every retailer is talking about CRM, and ways are being devised to make sure
that the customer is happy, so why can’t we have an ERM or Employee Relationship
Leonard.L.Berry in his article “The old Pillars of New retailing” talks about the five pillars of
retailing that is
• Solve your Customers Problem
• Treat the Customer with respect
• Connect with the customers emotions
• Set the fairest not the lowest price
• Save your Customer’s time.

Let’s now look into the ERM perspective of it-

Solve the Employees Problem

Why does the individual look for a job, because he has a problem or need, the need may be
mainly two Money and Social credibility. As it is a low skill job the people with low or average
qualification comes forward to this. So what does the company have as a solution to this
problem? The focus of the organization should be how it can differentiate itself from the other
organization, the same way as a retailer wants to differentiate itself from its competitor when it
comes to the Customer.

Treat the Employee with respect

If the Company has the policy to invest in its employees, train them than why do they want him
or her to leave, the best policy is to treat them with respect and dignity. So an Employer should
• Respect their identity
• Respect their Problem- differentiate between employees who create or show problems to
meet ends or individuals who have genuine problem
• Respect their growth aspirations
• Respect their time- Help them have a healthy blend between the time for their job and the
time for their family.

Front end operations is very much target oriented, so there is always a tendency to exert
pressure which could be undue at certain times, the person in charge should strike a balance.
It’s like a bicycle tyre we need to make sure that the air pressure is precise, if it is less air the
ride will not be smooth and if the air pressure is high than the tyre will burst.
Connect with the Employee’s Emotions

There are two ways to ascertain the employability of an employee, one is to look into his IQ
level and the other is to ascertain his PQ that is the passion quotient for the job which he is hired
to do. If an individual is passionate about his or her work than he certainly would a kind of
person who is influenced by his emotions. So how does the Company connect to him
emotionally? The best way is provide the right kind of encouragement for the work he is doing,
giving him the right kind of incentives, personal needs are very much attached to an Individuals
emotions, so the company can make the employee attached emotionally by taking care of his
personal needs, which could be his further educational and professional requirement, children’s
education, his family health etc. It is like when a customer is completely satisfied by the product
he or she will think twice before switching over the same way if the employee is satisfied
emotionally about his work place he or she would like to stick to the workplace they are
currently going.

Set the fairest not the lowest or highest Salary

The biggest problem which is there in Retail is the pay structure for the Front end staff the
companies are ready to spend millions on the middle and the upper management but are not
ready to spend money on the front end staff who is the IMPLEMENTATION FORCE, the
difference in the salary of the Front end staff and the Management is humongous. Yes Retail
especially the FMCG/Grocery formats have the money crunch because of the average margins,
the rentals, the overhead cost and also the customers who are always looking for discounts. It is
not financially viable to give the highest salary because that would eat on the profits of the
Company. So what is the way out, it would be a right blend between the fairest salary and
incentives, because if we have a fair incentive structure than both the company and the employee
both are making money.
Save or take care of your Employee’s time

There is a tendency to make the front end staff over work, which is the major reason for attrition
other than low growth rate. If we take care of the Employees time than we can handle both these
problems. If an organization gives the highest salary and does not solve problems, give respect
and connect with the employee emotionally than it is no use to give a high salary. This will lead
to attrition, employees joining and leaving in short duration which will make the EMPLOYER
seem as an unfriendly to place to work with. This will have a compounded effect because as it is
Retail is considered as a high stress job. It should be impressed upon them that they are expected
to work 8 hrs a say rather than 12 hrs, this can be done by efficient utilization of the front end
staff, all retail stores are self service still we tend to have employee numbers more than what is
required. The Wall Mart concept of the 6 Feet policy is the most appropriate here, have Sales
force in the store just to assist if required, make the customer as independent as possible. Have
the least possible front end staff in the store because it will reduce cost increase profits, and in
turn that revenue can be used for the staffs who are working in the store. For the Best employee
in the store reduce the time he is working as a Sales Representative help him grow with time in
the organization, this will keep him motivated and will also keep the other interested because
they would feel that they also have a chance to move up the ladder.

We have discussed the solution to the problem through ERM; now let’s look into the best
possible structure which can be followed for the same. That is how a Company can give an
Impression that they make Friends not employees. The HR should stop using MONEY-
SALARY- PACKAGE- PAY as an attraction tool for hiring. They should use other tools to

impress on the prospective employees. So what can that be?

So where is the magic wand, who will create this magic? There is no magic portion for this as
human minds can’t be controlled by Magic, that’s what happens in Fairy Tales. So lets create a
Fairy Tale atmosphere, what is it that happens in a fairy tale. There is a problem, there is a prince
charming and than there is a happy ending which has a caption that they lived happily there after.
So the best way to have an HAPPY BEGINNING and A HAPPY ENDING is there in FIVE



There is a tendency among companies to have a thought process that, what if we spend a lot of
money on training of the store staff and they don’t stick to the organization, what the
organization fails to understand is what if these people are not trained and they stick to the
organization. Just to give an example there are two products EZEE which is used to wash warm
clothes or the expensive varieties the and EASY OF BANG which is a floor cleaner. A customer
walks into the store and asks for EZEE, the Customer Store Executive informs the customer that
EZEE is not available so he can take EZEE of BANG, a typical example of him not knowing the
product and its functionality, what if the customer is not aware that it is a floor cleaner and end
up washing his warm clothes in it?. So Training gives the Employees the edge which is required
to serve the customer in the right way. So what should the company train the front end staff on-?
• Product knowledge
• Benchmarking of local competition
• Inventory Management
• Effective sales techniques
• Handling the Customer- Communication, Complaints,
• Selection and Hiring
• Upholding of company values, vision, and mission.
• Security
Training may not inspire an individual to stay with an organization, so it does not mean that if
you are giving the best training it will help the company to reduce its attrition rate, so what id it
that will help.. HELP… Companies need to take the employees as an extension of an extended
family. The help could be in way of Insurance, Assurance, Stability, Education and Money. If an
employee working in the organizations feel that he and his family is insured from any kind of
mis-happening than it helps him to concentrate more on his work and learning. The organization
van give assurance that they will take care of his immediate needs which could be giving a place
to stay, education for his kids, could be possible that to put his kid to school he may have to pay
a sizable amount of money in one go, the company can sponsor that or can provide him or her
with a easy loan which he can pay in easy installments. It is very important that the targets which
are given to the employees are realistic, it should not be that the moment he hears about the
target he has the feeling that it is not achievable at all. Help him to achieve his targets. Help him
to get educated, mostly the front end staff is 12 grade or must have barely finished his or hers
high school, so it would be highly motivating if the employees are given a chance to learn as
they work. The Company can have a 5 day working week, one weekly off and once a week the
employee is taking classes for the course which they are doing which can in turn help them to get
growth, stability, money etc.




So by Training and Help what GAIN will the Employee have, GAIN can be measured in two
terms. Firstly it can be learning which the employee gets from it he becomes more adept to
understand about the product and also gets an inclination to know what the customer wants.
Today Retail is not about selling to the customer what the Company wants to sell; it’s about
selling to the customer what he or she wants. By the effective training method the Customer care
executive gets an idea about knowing the customers preferences. Gain is from a monetary
perspective, training will give him ideas about how he can be more useful to the company as well
as to the store, because he will understand his roles in the store it will be easier for him to meet
targets which in turn will make sure that he is getting his incentives regularly. It will also be a
Social gain for the employee because as he would be trained and educated so it is easy for him to
grow up the ladder. The gain will also be from a Employer perspective because the Employee
will be trained on CRM principles like the SIX FEET POLICY and the SUN SET POLICY
which are being followed by WALL MART which will lead to more satisfied customers which
in turn would mean more mileage to the BRAND.

Training, Helping, Gaining will ultimately lead to GROWTH. Retail front end is always looked
at as a LOW SKILL- LOW PAY job. So the main issue which emerging out because of this is
LOW SKILL means LOW PAY which in turn leads to ZERO level of JOB SATISFACTION.
Sales is considered as a low aptitude low intelligence job. So what will TRAINING, HELPING,
GAINING do to this job structure? It will make sure that the skill level of the individual is
increased which means his pay levels will also increase. As he will be more adept to do his job
his growth in the organization ladder will also be on the higher side. Because they are having
constant growth there will be PASSION for the job in hand, MOTIVATION will automatically
increase because he is growing and is also having enough money. They will no longer be just
bodies they will be a group of individuals who are really motivated to drive sales. One more
major problem which the organization faces is that of ATTITUTE, the employees do not have a
positive vibe or feeling towards their work place as they general feeling is that they are treated
shabbily. But as GROWTH creeps in the ATTITUTE of the individual becomes positive and he
start thinking about the Company in the same way as he thinks about himself.

The word LEAD is being used in two perspective. LEAD BY EXAMPLE and make the front
LEAD BY EXAMPLE- How many front end Managers spend the peak hours on the floor
selling or helping the Store personal, when we talk about MANAGERS its not the Store Manager
but the higher ranked officials. They normally come check out the store for the required SOP or
parameters and stay aloof from the hard core selling. It is very important for the higher ranked
personals to be present on the floor because than they also would understand the customers
perception which in turn will help them to train the store personals and understand what
problems are faced by them when they interact with the Customers.

Every store or organizations have people who are working at the lower end efficient passionate
individuals. The performers should be differentiated with the ordinary ones. The Efficient
performers should be put on the fast track. If you have a Customer store executive who is a
brilliant performer than he or she buddies with a senior personal than they are taught the
nuisances about being leaders because all good performers do not necessarily become good
leaders. So when you are budding them with a senior personal and making them buddy leaders
than you have ample chances to ascertain if they can be performers at that level. If in this process
it is found that they can be a good Man management person than immediately they should be
elevated to the next level. If they are lacking skills for being a leader, than they can be trained for
the required skills.

The discussion which I have highlighted has a number of solutions which I have talked about in
the paper, first and foremost is to make retail a more attractive career choice for youngsters,
wherein it becomes a priority and not a last resort. Retail has a large amount of workforce so it is
necessary that the right skill sets are taught to them either at the graduate or the post graduate
level so that when they join the organization not much time is wasted on their training because
Retailers are always hard pressed for individuals who can make a difference immediately and not
having must gestation time to be performers. The paper has tried to highlight the problems with
the solution for the same for retail to be a profitable venture for the companies.
Leonard.L.Berry in his article “The old Pillars of New retailing” Published in Harvard Business
Cathy Hart, Grazyna B. Stachow, Andrew M.Farrell “ Employer perceptions of skills gap in
retail:issues and implications for UK retailers
Camphell Fraser and Anna Zarkada- Fraser: Measuring the performance of retail managers in
Australia and Singapore
John Byrom,John Harris, Cathy Parker: Training the independent retailer: an audit of training
needs,materials and systems.