Round and Round

Retail is a strange beast. Many companies with physical storefronts are feeling the squeeze of today’s economy, and many may not survive because of the ease and effectiveness of online shopping. I don’t claim to understand all the ins and outs of it, but my husband and I have worked retail for a number of years so I do know a thing or two. I’ve noticed a certain pattern, and I feel like I have to just write it out some in order to help my mind wrap around it. Because the more I look at it, the less sense it seems to make. This is not aimed at any one company in particular, but retail in general.

So the company makes money by making sales. The company makes sales when consumers buy their product. Consumers buy their product based on interactions with salespeople employed by the company.

Figure 1. salesperson => customer => sales => company $

When sales are good, the company can employ more people, who are able to sell to more customers, which makes the company more money.

Figure 2. more sales = more money = more salespeople => more sales

When sales are down the company needs to reduce expenses. Top of the list is the number of hours they pay their employees to sell their products. So wouldn’t having fewer people selling lead to smaller sales numbers?

Figure 3. fewer sales = fewer salespeople => fewer sales

Someone please explain to me how this solves the company’s problem. Because I don’t have an advanced degree in economics, so I’m seriously not seeing it.

I know that there are many, many consumers who don’t need someone to talk to them in order for them to make a purchase. They go in having done their homework, they know what they want, and they will go home happy, having spent their money on exactly the thing they came for. But what if there was something they didn’t know about? Something that would work better for the same price or even just a little bit more? What if they didn’t think to pick up an additional related item? Even if the add-on amounts to less than $5, often it could be higher, and those small additions can significantly increase a store’s sales numbers when there are enough of them.

Personally, I have the personality and vocal projection ability to talk to six or seven customers at the same time about a certain product. But my recommendations do tend to change based on my customers’ individual circumstances. I’d much rather talk to one person at a time, two if I must, so that I can make sure that they’re getting exactly what will work best, so that I can personalize a recommendation for them where they leave feeling good enough about their experience to spend a little more than they might have otherwise, and likely come back to talk to me (or someone like me) again and again. In order for me to do that, though, I’d probably need another person or two to talk to the other four or five customers who might have different needs or preferences.

I know retail is difficult. A store can’t always predict when they’ll need those extra salespeople in the building. Customer flow varies throughout the day, week, month, year. I get that. But there are trends. And I can’t help wondering if there’s a better way to increase sales numbers than cutting the hours of the salespeople. Has anyone else in retail experienced a different way? Seen a different solution? Because I’ve seen this same thing happen over and over, and while it makes sense on one level (employee wages are the easiest and largest area to reduce company expenses), it doesn’t seem to play out to the company’s advantage in the long run.

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