Last week, we were told by one report that UK consumers are so keen to put their hands in their pockets, 31% of them will end up in debt over the next few weeks.
This statistic seems to conflict with a recent government report which revealed that, in the past two years, vacancy rates in a number of retail-heavy towns have doubled, and thousands of stores have closed. The report claims that in 2011, approximately 20 shops in the UK closed every day, leading to the worrying statistic that an average one in seven high street premises is now vacant.
At the same time, the latest retail spending figures released by the British Retail Consortium (BRC) showed sales growing by just 0.7% in November. This is the weakest growth in the UK since May, and was especially concerning in the run-up to Christmas. Compared to like-for-like figures in 2010, sales have fallen by a significant 1.6%.
So why has the retail sector continued to suffer, and what actions can be taken to combat these concerning trends?
Retail can be a challenging sector at the best of times, yet prior to 2007 many retailers had been riding the wave of economic prosperity for over 10 years. As such, when the crisis developed, there was a high proportion that had not experienced such a difficult environment, and certainly not for such an extended period. Retail managers were forced into making quick decisions and many chose to reduce their staff headcount, or had this imposed from above, in order to reduce costs. However, those who took this route left themselves with fewer people to tackle an increasingly difficult job.
The knock-on effect of this has been HR and managerial staff becoming increasingly task-focused. There is less interest in traditional training techniques such as performance appraisals, coaching and personal development planning – although, without proper training and upskilling, staff proficiency is unlikely to improve.
Training, for example, can drastically improve the confidence of personnel at all levels. In recent years, staff confidence has taken a hit, in line with the retail industry as a whole. Support staff are increasingly nervous about making decisions, and consequently, when problems occur, they quickly escalate them to managerial level. As such, senior managers are progressively taking it upon themselves to make minor decisions and are prevented from dealing with high-level issues and focusing on business profitability.
Added to this is the pressure for stores to secure rival market share. In a climate where the phrase 'survival of the fittest' has never held more truth, competition is keen. Businesses are desperate to imitate successes. But while watching competitors and copying their moves is all well and good in the short term, a lack of strategy can be catastrophic in the long term.
The best way to tackle these common issues is through the implementation of regular and thorough training programmes. To avoid wasting excess time in the classroom, training topics need to be relevant to the audience. Participants should complete all pre-training preparation in advance, so they can hit the ground running. It is equally important in this climate that training is supported by coaching in the workplace. Line managers need to know and understand the learning concepts so they can be confident role models and coaches to their staff. While time and money is tight, the arguments for investment in training are compelling: staff will be more productive, assertive, confident and accurate when making decisions, ultimately leading to a more profitable business.
While training improves the knowledge and skill-sets of the workforce as a whole, at a fundamental level, it can also help to expand the horizons of an employee, improving business ethos and raising team spirit. Once confidence is restored to the support staff, the managerial team can return to concentrating on business profitability and development, confident in the knowledge everyday tasks are being handled with assurance by other, well trained members of the team.
Quality training is a fundamental business requirement. Rather than viewing training as a purchase, it should be considered an investment, providing the competitive advantage retailers need; the ROI it provides will quickly meet and surpass the time allocated to the development process. It is vital that businesses do not ignore or underestimate the importance of training; it is still one of the best tools the retail industry has at its disposal to deal with the current economic climate.
Chris May is MD at customer management training company, FXL
