Readin’, ‘Ritin’ & Retailin’

The peak selling season for the winter footwear his company manufactured was Oct. 15 to Dec. 1—a six-week window. “We only had so many people who could get to so many stores,” he says. “I was doing a lot of traveling during a short period of time.”

And so Nash sold his footwear company in 1999 and started a new company: Not manufacturing footwear but offering a system by which retailers and manufacturers could use the web to train store personnel. The company—KnowYourStuff.com LLC—was one of the first to recognize the market for web-based training for retailers. Today, it’s joined by many competitors as the retail industry appears finally able to take advantage of web-based training.

A survey last year by the National Retail Federation found that 80% of members were moving toward alternative education outside of traditional classrooms, some via the web. Those survey results and a number of other developments point to growing acceptance of web-based training systems in retail locations.

For instance, encouraged by the survey, the National Retail Federation Foundation and Sun Microsystems Inc. have formed a joint initiative to offer e-learning systems to NRF members. Announced at the National Retail Federation’s annual convention in New York in January, the program has been well received by retailers big and small, says Kathy Mance, vice president of the NRF Foundation, although it is not offering any content yet.

Passion

Similarly, the Worldwide Retail Exchange, a supply chain automation organization, recently signed a deal with Click2learn Inc. to offer web-based education to members on such procurement topics as group purchasing, auctions and private label orders. And a number of high-profile developments—such as Circuit City Stores Inc.’s recent three-year renewal of a contract with e-learning provider DigitalThink Inc. and Famous Footwear’s rollout of a program from Docent Inc.—offer evidence that the market is ripening.

“I’ve been surprised to see an amazing amount of passion on this topic,” says Bob DeLaney, director of Sun’s retail division and one of the point persons in the NRF program. “The retailers think this whole training issue will give them a competitive edge.”

A number of factors have come together to spur retailers’ interest in web-based training. One is the perennial problem of retail personnel turnover, as high as 300% at some retail outlets. That turnover creates an ongoing demand for training, not just in how to treat the customer and handle the store technology but also in company policies, procedures and practices. Another is the shift to providing a high level of customer service, which requires a well-trained workforce. And a third is the growing technological sophistication of stores, many of which have broadband connections and browser-equipped PCs. “The technology fills a need retailers have and that is the need to improve training as the industry shifts to a customer-centric environment,” says Jeff Roster, senior retail analyst with Gartner DataQuest. “That requires the retail sales associates to have a better understanding of how to serve customers and of the products if they are going to fill customers’ needs. A web-based tool makes a lot of sense.”

Retailers benefit from faster, more efficient training of employees in a number of ways, participants say. For starters, it’s an easy and effective way to test language and computer skills, some say. For another, it is an efficient way to train new employees in a high-turnover industry. The cost of recruiting and training a retail employee can be up to $2,000. “When people stay only 60 days, that can be very costly,” says Don Gilbert, the NRF’s senior vice president of information technology. Circuit City’s orientation training now takes place 30% to 50% faster thanks to being on the web.

Because it is so easily available, e-learning also can help sales personnel develop skills more easily than other systems. That means they are more knowledgeable and can sell more. And that means that competitors will have a harder time wooing them away because the prospect of earning more with their present employer is high. “Learning equals earning,” says Jeffrey S. Wells, senior vice president of human resources for Circuit City, which has three web-enabled terminals for learning in each of its 604 stores. “The more a store associate learns, the more that person can earn.”

Generalized specialties

Furthermore, ease of learning allows sales associates to be trained to sell more than one specialty. At Circuit City, store personnel are now assigned to particular categories, for instance, audio, video, or small-office/home-office. “We will encourage cross-training and cross-functional knowledge so everyone can sell everything in the store,” Wells says. The goal is for a fifth of all stores to have personnel cross-trained by September. “Then we won’t have to worry that Bob is away and he’s the only one who knows about big-screen TVs,” Wells says. And that not only serves the customer better, but alleviates scheduling problems as well, he notes.

An investment in easy-to-use and widely deployed training systems also communicates to the employee that the employer cares about its staff, some say. “It gives the employee the feeling that company is investing in them, giving them the skills to build a career with that employer,” Gilbert says. “It also means the employer keeps the employee longer, which means the employee is more productive.”

There are also cost savings. B&Q, a U.K.-based home-improvement and garden supplies retailer, says it realized a five-figure savings in the first year of implementing an e-learning system from Docent and it expects that savings to increase to six figures this year. The savings have come from not needing instructors on site and from reduced time that training now takes. For instance, B&Q says a health and safety training session that used to take four hours now takes one and a half hours.

But participants caution not to lose sight of the ultimate goal of all retailers: Serving the customer. More knowledgeable sales personnel attracts customers, they say. “It’s all about driving a better customer experience,” Well says. “Customers will want to come to us because we have better people; they’re more capable, more knowledgeable and understand the customer’s needs better.”

Web-specific

The web makes such benefits available in ways that were not possible before, participants say. One advantage of web-based learning over traditional methods, say retailers, is that a corporation can develop one package that all employees learn from. And that provides consistency in training. “We have 927 stores and when you rely on the store manager to provide the education, you get 927 varieties of knowledge transfer,” says Susan Miller, director of training and development for Famous Footwear, a division of Brown Shoe Corp. That is a particular problem when turnover at the store manager level itself is 40%. Famous is implementing an e-learning platform from Docent, upgrading a system that has been in place for two and a half years.

Another advantage is that the web format requires certain content and approach to teaching that make education more acceptable to employees. And so they are more likely to use the opportunity and to retain what they’ve learned. “Store associates don’t want to read so you have to give them something that’s more fun, easy to get into and interactive,” Miller says.

Employees retain more of what they learn because they can do it at their own speed and when they want, Wells says. “Retention is better because the education process is interactive,” he says. “It’s no different from surfing on the Internet. You can follow links to where you want to go, so you’re engaged in the learning process. You’re not a passive learner.”

Famous Footwear’s training program, dubbed “Steps to Success,” offers four levels of education. Steps 1 and 2 are for sales personnel in stores. Step 1 deals with orientation and corporate history and presents success stories for motivation. Step 2 has 19 modules and goes into operations more deeply, including such topics as how to use the cash register, what’s available in the different departments and loss prevention. Each segment of Steps 1 and 2 is no longer than 20 minutes and each presents material in a bulleted fashion, with no more than five bullets to a page. “Steps One and Two talk to you,” Miller says. “There’s not a lot of reading and it’s interactive.”

More floor time

An employee who completes the segments can print a test that the manager administers to determine that the employee has absorbed the material. Since Famous Footwear is just implementing the program with Docent, it has not measured effectiveness yet, Miller says.

Circuit City offers 138 different courses in six phases, starting with orientation. Since it implemented its e-learning program in the fall of 2000, 90,000 employees have enrolled in 1.8 million courses. Circuit City saw a spike in usage in February ahead of a certification program, Wells says.

In addition to being more acceptable to employees, web-based training can be more acceptable to store managers as well. “Managers are always in the training mode,” Gartner DataQuest`s Roster says. “But they’re also expected to execute corporate strategy, get product on the shelves, make sure the store is secure and, by the way, train X number of associates every month. This can make their jobs easier.” Furthermore, he notes, the sound-bite nature of the training means sales personnel will spend less time off the floor taking training; more selling makes managers happier.

Web training also is ultimately cheaper to maintain and operate than more traditional methods. “One of the best things about the web is that updating information should be easier and faster,” Miller says. “Retail changes so fast that printing new books and getting them out to everybody gets costly.”

Attention from the big guys

E-learning participants like Docent and Sun provide the technology infrastructure and rely on others for the content. The National Retail Federation hopes to offer a broad range of training material to members and plans to peer-review content before offering it. “We’d like to provide members some guidance, some filtering of content,” Mance says. “By using the peer review approach, we’ll be picking out the best of breed.”

Companies like DigitalThink of San Francisco provide infrastructure and content or design of the presentation. In Circuit City’s agreement with DigitalThink, Circuit City creates the content based on its objectives, then DigitalThink puts it into the appropriate format for presentation to the employees. Bellevue, WA-based Click2learn also provides infrastructure and content.

When planning its program, the NRF Foundation, which already offers education programs for retailers, believed that, in Mance’s words, “we’d be the training department for the little guys.” But planners were surprised to learn that large retailers are interested as well. “We didn’t think the big guys would come in,” Gilbert says, “but they are interested in the NRF review and stamp of approval.”

But while the NRF’s survey last year revealed that retailers are interested, not many have adopted alternative forms of education outside of corporate headquarters. The problems often are lack of facilities or resources and the lack of bandwidth or sophisticated equipment to handle web access. “The percent of stores that have web access is disappointingly low,” says David Mandelkern, executive vice president and chief technology officer of Docent.

But that may be changing as retailers are focusing this year on replacing POS systems. “All the retailers we talk to have new POS systems as their one, two and three top priorities for the coming year,” says Craig Laviano, director of retail learning solutions for DigitalThink. “They’re making huge investments in infrastructure.” Thus the bandwidth may get into the stores and the e-learning systems can ride along on it.

Long winnowing

Other retailers, though, have made commitments to e-learning and invested accordingly. Circuit City, for instance, ran broadband connections into its stores for e-learning and equipped training areas in each store with three PCs with browsers. It also reconfigured its training rooms to provide a quieter, more private area for employees to work on the terminals.

Many vendors host content at their own servers, alleviating retailers of the maintenance costs. The key expenses are fees to access the material or licensing the software. Laviano says a typical retail chain will pay around $300,000 for the DigitalThink system, although many get in at a lower price on a pilot basis while some major retailers’ costs extend into the seven figures. Costs are based on number of stores, number of employees and the amount of course material the retailer wants. Famous Footwear pays $100 per store each year to access the Docent system. Because of turnover, the company didn’t want to pay per employee, Miller says.

Famous Footwear chose Docent after a long winnowing process, Miller says, that started with 400 potential vendors. A training employee and an information systems employee spent three months reviewing companies before narrowing their choices to 15. They judged each on the basis of the system’s ability to be customized, how easy it was to use, whether Famous Footwear could create its own look and feel around the system, the depth of tracking ability each provided and how compatible each was with existing systems. Three finalists were then judged on the basis of the relationships that they had with other retailers, their stability and their likelihood of staying in business.

Apart from the issues of bandwidth and in-store technology, many observers say cutting through the thicket of competing claims by vendors may be the biggest drawback to implementing an e-learning system. Yet most are hard pressed to find any reason not to pursue an e-learning initiative. Says Gartner DataQuest’s Roster, who worked in retail himself before becoming a research analyst and consultant: “I’m not usually a cheerleader on these kinds of issues, but it’s hard to see a negative. The concept of web-based training hits on all cylinders.”

kurt@verticalwebmedia.com

E-briefings for new products

Apart from its usefulness as a way to train employees on store policies and procedures and as a sales training tool, web-based learning is valuable to manufacturers introducing products. “Web-based education will make new product rollouts more effective because there will be more knowledgeable people who are trained faster selling it,” says Bob DeLaney, director of Sun Microsystems Inc.’s retail division, which is undertaking an e-learning initiative with the National Retail Federation Foundation.

Circuit City Stores Inc. is offering manufacturers the opportunity to present new products to store personnel in a format it calls e-briefings. “They talk about one product, explain why it’s exciting, how it differs from other products and what makes it state of the art,” says Jeffrey S. Wells, senior vice president of human resources for Circuit City.

Besides being able to deliver a consistent presentation in a cost-effective way, part of the advantage of web-based briefings is that headquarters can track who has taken briefings in which stores to make sure that an adequate number of sales associates have received training before a product rolls out.

The system should be attractive to manufacturers as they plan their rollouts because they will want to place new products with retailers who have trained associates ready to sell knowledgeably. “Our training system will become part of our competitive advantage,” Wells says.