The online retailer has spent nearly $300 million acquiring three shipping software vendors over the past nine months.
Retailers have found a new category of partner in developing and deploying online training: product manufacturers.
Online training for retail employees is something of a Holy Grail-in theory, it can save retailers time and cost over classroom training for associates on products, procedures and policies. But does it, in fact, accomplish that? In efforts to get the biggest bang for their training buck, retailers are out to answer that question for themselves. They’re launching online training programs that use the web to deliver information that store associates then take out to the sales floor or call center. If successful, the programs pay off in increased product sales, so it’s not so surprising that retailers have found a new category of partner in developing and deploying online training: the product manufacturers themselves.
Automotive and consumer electronics retailer Crutchfield Corp. doesn’t have stores, but it supports web and catalog sales with a staff of about 90 commissioned sales reps in its two web-enabled call centers. New hires must complete 12 weeks of classroom and practical training, and since many of the customers who ultimately buy from Crutchfield’s web site or catalog wind up talking to a call center rep first, it’s critical that the reps be fully equipped with category and product knowledge as well as sales techniques and guidance on how to handle different customer situations.
When Crutchfield investigated putting that training online in an e-learning format a few years ago, it proved to be cost-prohibitive, says technology training manager Peter Logan. “At that time, the cost per finished hour of training was $10,000 to $20,000, and our new hire training goes eight hours a day for 12 weeks,” Logan says. “It was really expensive for us to get all the information to the vendor and then hand-hold them through the process to get the product we really want.” Logan also points out that materials already developed by Crutchfield internally, its catalogs and web site, are valuable reference sources for new trainees. “We’ve already got that content so there is no sense in trying to recreate a lot of that in product training,” he says.
Opportunity for two
Under that scenario, investing further to develop online product training makes less sense for a retailer-but it’s clearly an opportunity for brand manufacturers. They already spend on vehicles such as product spec sheets, brochures and in-store classroom training to keep store associates up to date on products and new product features, so going online with that is, in concept, an easy leap. The questions that remain are: Does it work and does it pay?
Crutchfield hopes to find out by the end of this quarter. Products and product enhancements roll out so frequently in consumer electronics that the company gets visits at least once a week from manufacturers who take to the road to demonstrate what’s new and keep call center agents up to date. In October, Crutchfield started making product training courses provided by some of its manufacturer partners available online to sales associates, placing links to courses on a new, internally-facing online resource page. Employees who to take a course do so on their own time. Their compensation is largely commission-based, so there’s a built-in incentive in the idea that better product knowledge equals greater selling ability. To sweeten the pot, some of the manufacturers sponsoring online training add a small reward for completing the program, such as a T-shirt or a cap.
Crutchfield will track any correlation between higher sales volume and course completion, by associate, and it’s not the only party eager to see the outcome. “The manufacturers are thinking maybe they can streamline their own training costs, and that maybe they don’t have to deploy an army of trainers,” says Logan. “They are just as curious as we are to see if, after people take an online course, there is an incremental increase in sales.”
But it’s not just high-tech electronics retailers who can turn to manufacturers for e-training assistance. Manufacturer Columbia Sportswear Co., which sells its outdoor apparel and gear through its own flagship store and through retailers, believes that e-training can boost its own sales.
This quarter, with online training services provider DigitalThink Inc., Columbia is testing online training in cooperation with a major retailer that it won’t identify. Columbia looked at but rejected the use of CD-ROMS to deliver the 15-minute test program, which focuses on its outerwear lines. “We felt online was the most effective way to communicate the information,” says manager of market research and sales analysis Paul Herring. “There’s nothing to ship, no materials to misplace, and no manufacturing cost outside of content development.”
Much of Columbia’s line is highly-engineered outerwear built for serious outdoor activity, so detailed knowledge about product attributes such as construction and materials is critical to sales. Herring says nothing beats face-to-face, one-on-one training, and the manufacturer regularly dispatches reps to its retail accounts for that purpose. But with potentially hundreds of thousands of sales associates across many retailers needing to know about the products, Columbia needed to find a way to extend its reach.
Don’t forget the PCs
As slick as it sounds, there was a cost to the store partner that delayed implementation: the cost of installing enough computers in stores to give associates sufficient access to the online program. Adding the PCs delayed the pilot’s implementation by two months, bringing the total development time up to about nine months, Herring says. Unlike Crutchfield’s call center agents, the store partner’s associates will be required to take the online course, but Herring believes they’ll welcome the chance to learn more. “It’s simple and it’s short,” he says of the online module. “These associates aren’t on commission, but they’re still evaluated on production per hour, so it’s important they know about the products.”
Associates will be tested online on course material, but the bigger test will take place on the sales floor over the next several weeks. Columbia and its retailer partner will over the fourth quarter measure brand sales in a selected group of stores where associates complete the online module against a control group of stores where online training wasn’t provided. Depending on results, it may add other modules focusing on a broader range of Columbia products and consider rolling out the program to other interested retailers.