Meanwhile, PayPal acquires mobile payments firm Paydient.
Staff turnover, the rapid introduction of new products and demand for knowledgeable sales associates are driving a move to web-based training in retail.
When Woody Nash headed up the New England Overshoe Co. he noticed an interesting phenomenon: Every time he or his staff would meet with retail sales personnel to explain the features and benefits of the products his company made, sales would increase. “We would see a spike in sales after we did the training,” Nash says, “but it was frustrating because we couldn’t be in all places at all times.”
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.
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.”
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.