Viva People Science Industry Trends: Retail

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Welcome to the fourth edition of Microsoft Viva People Science industry trends, where the Viva People Science team share learnings from customers across a range of different industries. Drawing on data spanning over 150 countries, 10 million employees, and millions of survey comments, we uncover the unique employee experience challenges and best practices for each industry.

In this blog, @Jamie_Cunningham and I share our insights on the state of employee engagement in the retail industry. You can also access the recording from our recent live webinar, where we discussed this topic in depth.

Let’s first look at what’s impacting the retail industry today. In summary, we are hearing about market volatility, supply chain constraints, changing consumer behavior, technological advancements, labor pressures, and rising costs. According to the Deloitte Retail Trends 2023 report, the top-of-mind issues for retail leaders are:

Growth versus sustainability: Retailers need to balance the short-term pressures of profitability and cash flow with the long-term goals of environmental and social responsibility.
Consumer confidence and retail sales: Retailers need to cope with the uncertain and volatile consumer demand, which is influenced by factors such as inflation, health concerns, and government policies.
Leadership quality and brand strength: Retailers need to demonstrate strong and visionary leadership, as well as to build and maintain a distinctive and trusted brand identity.
Technological innovation: Retailers need to leverage technology and data to create personalized, seamless, and omnichannel customer experiences, as well as to optimize their operations and supply chains.

These issues require retailers to be agile, resilient, and innovative in their employee experience strategies and execution. The retail industry also faces some specific challenges in attracting and retaining talent, such as:

Rewards: Retail jobs often pay comparatively lower wages and benefits to other industries and can lack recognition and rewards for employees' hard work.
Wellbeing: Retail employees often deal with high-stress, low-flexibility, and high-risk work environments, which can affect their physical and mental health.
Growth: Retail employees often perceive limited opportunities for career advancement, skill development, and learning, which can lead to disengagement and attrition.

According to Glint benchmark data (2023), employee engagement in retail has declined by two points between 2021 and 2022. It’s clear that retailers need to invest in improving the employee experience, especially for the frontline workers, who are the face of the brand and the key to customer loyalty. So, how do they do this? Here are three examples of how retailers we’ve worked with have addressed the needs of their employees with the support of Microsoft Viva:

1. Create a compelling future

We worked with the leadership team of a MENA (Middle East and North Africa) based retailer to recognize that there was a connection between their ability to communicate the future of the direction of the organization effectively, and the degree to which employees saw a future for themselves in the organization. The team committed to clarifying how the business initiatives they were rolling out connected to future work opportunities for their teams.

2. Build bridges with frontline employees

According to the Microsoft Work Trend Report (2022), sixty-three percent of all frontline workers say messages from leadership don’t make it to them. A global fashion brand recognised after several years of employee listening that the actions being taken by leadership were not being felt on the shop floor. We worked with them to adopt a simplified action taking model with one clear commitment from leaders, that was efficient and effective in terms of communication and adoption. They also increased their investment in manager enablement to support better conversations within teams, when results from Viva Glint were released. This simplified approach led to improved perceptions of the listening process, and greater clarity at all levels on where to focus for a positive employee experience.

3. One internal team, one goal

Through an Executive Consultation with leaders of a UK retailer, it was identified that wellbeing was a risk for the business that unless addressed, would severely impact their priorities. With that in mind, the team created internal alignment - to prioritise wellbeing through both training investment and policy changes, resulting in a thirteen-point improvement in the wellbeing score year over year.

Conclusions

To succeed in this dynamic and competitive market, retailers need to focus on their most valuable asset: their employees. By investing in the employee experience, especially for the frontline workers, retailers can boost their employee engagement, customer satisfaction, and business performance.

A downloadable one-page summary is also available with this blog for you to share with your colleagues and leaders.

Leave a comment below to let us know if this resonates with what you are seeing with your employees in this industry.