Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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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.”
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.