Taxability of unreported income all beyond the normal reassessment period- French Court of Quebec case, June 10, 2020.
Consider whether starting CPP before, after, or at age 65, would be the most advantageous
Sarah helps her clients drive sales and profitability through strategic planning, merchandising, buying, and private label consulting services.
We recently had a chat with Sarah about the changes that we’re all experiencing in retail, and how merchants can use private labeling to differentiate and thrive.
Let’s dive in!
The right retail mindset for staying competitive
We started off our discussion by talking about current retail landscape and what merchants should do to thrive.
“The brick and mortar environment is really challenging, mostly because the retail industry is deep in these uncharted waters right now, and there are a lot of unknowns for physical stores,” says Sarah.
“Merchants need to stay hungry, and go after modern retail mindsets and business opportunities.There are a lot of potential possibilities for brick and mortar. And those who are struggling aren’t embracing this kind of new market and mindset. But if you’re willing to go after it, there’s unlimited opportunities to grow your business.”
Staying relevant through private labels
“Retailers remain relevant by being brand and customer-focused,” explains Sarah.
“It’s analyzing and understanding what your brand means to your customer, and the relationship they have with each other. Why does your customer love your brand? What makes it unique in their eyes? How can you continue to best serve your customers? Answer those questions, then focus on carving out your niche in the way that aligns both to your brand and also honors your customer.”
She continues, “The evolution of this idea is having your own label. Through a private label, you’re both offering your customer product that is personalized to their wants and needs, but also exclusive to your brick and mortar store.”
Benefits of having a private label
According to Sarah, there are 3 main benefits to having your own label. They include:
Better margins – Private brands frequently deliver higher gross margins (meaning more profitability for you.)
You’re in the driver’s seat – You are in total control of all aspects of the brand — from manufacturing, product mix and supply chain, through pricing and marketing.
You can showcase what you’re all about – Private brands can be used as a channel to showcase your business’s core values in a way that will resonate with, and serve, your customer.
How to start your own label
So far we’ve discussed the benefits of having a private label. The question, how do you start one?
According to Sarah, you can start off by doing three things:
a. Look at your store’s data
“First and foremost, you want to look at what is performing in your own brick and mortar store,” she advises. “So analyze your sales to understand what your customer is reacting to and what they’re purchasing. And on the flip side, be aware of what they’re not purchasing.”
This is a great starting point to figure out who your customer is and what they’re reacting to.”
b. Figure out your place in the market
Next, Sarah says, “You want to make sure you’re looking at market trends and understanding how are things evolving in the market. Then determine where you land on the fashion pyramid.”
c. Look at your competitors
“And I think also, there’s a time and place to look at your competition. You don’t want to be blind about that by any means, but you also want to make sure that you’re being open to the fact that your competition’s customer is not necessarily the same as your customer.”
Defining your product categories
“Once you have your research performed, your trend analysis performed, and your competitive analysis performed, then you should start understanding gaps in the market and where you can fill back into,” adds Sarah.
“[This means] defining the product categories that you feel like would be a good fit for your business and customers, and then developing around that.
You also want to make sure that you’re giving the customer the opportunity to find your brand, so you don’t want to launch with one or two pieces. You want to have a small collection and really give the customer the opportunity to find your brand in your store.”
“So from that point, when you have an idea of what you want your assortment to look like, that’s when you can begin the sourcing process, the costing process, and the designing process of getting your private brand off the ground.”
Marketing and positioning your brand
As for how to market your brand, Sarah says you should “definitely call out what sets your products apart. What makes them different?”
“Really look at it from a value position versus a price position,” she adds.
“A lot of times price can be really tough to beat, especially in the Amazon world. So it’s important that you pivot the opposite direction and find a different approach to differentiate yourself and showcase the value that you’re offering your customer with your private brand. That could be the style, it could be the quality, it could be the overall experience that they’re having when they’re shopping with you.”
“The bottom line: focus on how you can remain competitive by offering value to your customer instead of a margin-draining, rock-bottom price.”
Examples of retailers with amazing private labels
Looking for inspiration to help jump start your label? Sarah shares some of her favorites…
Kohl’s and LC Lauren Conrad
“The first one that came to mind for me was Kohl’s and their Lauren Conrad brand. The partnership there has been really strong since it originated because both partners were really clear on who the customer is that they were trying to reach.”
“Kohl’s had a gap in their private brand portfolio, and they knew they wanted to reach a younger customer. And Lauren had a really clear picture of her brand and customer’s needs.”
Trader Joe’s
“Trader Joe’s is another one. They are so customer-focused. They know what their customer likes and they go after it.”
“Their customers aren’t afraid of interesting and different food options and flavors, and they build their brand around that. They’ll take a really basic item, and turn it into something special by leveraging a trendy food flavor.”
“For example, there’s matcha green tea Greek yogurt. So they’re kind of mixing those two ideas together. And in turn, they’ve really developed some pretty cult classic items. That makes them a destination for their customers.”
Final words
As for final pieces of advice, Sarah emphasizes the need to start with a clear strategy.
“I think a lot of times people get really excited to get into the fun part of designing and creating, but it’s important for you to go back and make sure you’re crystal-clear on your customer. Also be clear on your budget and what you can afford. Do the homework on costing. Do the homework on quality. And make sure that you’re building a strategy that’s going to be sustainable for you in the future.”
Cloud-based software is rapidly evolving and applied in a variety of settings. We are seeing it gain traction with companies that have warehouses and inventory to look after. Cloud-based technology has invited a shift to online inventory management.
When looking to make the shift to a cloud-based online inventory management system there are several factors to take into account. You should gauge what you want to get out of it. It’s also important to recognise that this change will take some time to get used to. Technology is constantly shifting and people and companies have to adapt as well. Before you make the jump into an online inventory management system, consider the impacts on your staff and overall business.
Innovaters and Early Adopters
There are several categories of people who adapt to technologies. Innovators are the first group of people to adopt a new technology. Next there is the early adopters group. The early adopters are often younger in age and love new technology. These are the people who pitch a tent in front of an electronics store to get the latest computer, phone or gadget on the market.
The Majority
Then we have the majority. The majority is divided into two categories: early and late. The early majority catches on to the trend after the early adopters; they form the early stages of the critical mass. This mass is what drives more followers. In a business setting, you’ll need a strong following of early adopters that believe in the cloud technology and are willing to change. They show the rest of the group that the change can be done and it is, after all, a good thing.
The late majority is comprised of people who need more convincing. They are sceptical and weary of how this option will be better than the last. It takes them more time to come around to the idea and they are not outwardly supportive of the new technology or change.
Late Adopters
Lastly, there are the late adopters. If there are people in your company who have been there a long time, they might question the use of cloud-based software. They have been subject to a lot of change over the years and people get stuck in there ways. You need to be prepared to sell them on the benefits of cloud-based technology and how it will make their job and work stream more effective. They will eventually come around but it can take them a long time to learn and implement the new cloud-based software.
Before you make the change, consider how your staff will respond. Make sure you think about how your staff will adapt and what you can do to make the transition into the cloud easier.a Rubik’s Cube with the layer-by-layer method. It can be learned in an hour.
And here’s the good news: when it comes to customer service, you’re in the driver’s seat.
You may not be able to influence the weather or control your competitors, but the level of service you provide is completely within your control. That’s why you should always be cooking up ways to wow your shoppers.
Now, I understand that this advice can be vague. (What exactly do I mean by “improving the customer service”?). So, to help your concertize the concept, I’ve put together a handful of real-life examples and action steps for taking your retail customer service to the next level.
1. The store owner who remembers — and appreciates — repeat customers
Make surprise and delight key components of your customer service and retention strategies. Repeat customers are the best types of shoppers to have and they’re very appreciative of retailers who remember them.
So, make it a point to let your frequent customers know that you’re grateful for their purchases.
One of my favorite examples of this in action comes from T-We Tea, a tea shop in San Francisco. I’ve purchased from them a number of times, and with my previous order, I found a sweet note that read, “OMG, Hi Francesca! So lovely to see your name come up! We miss you dearly up here but know you are always doing epic things!”
It was a lovely gesture and it’s certainly not something I get from other retailers (even the ones I shop with regularly). Because of this, T-We Tea will always be one of my go-to places for loose leaf tea.
Action steps
Take note of your repeat customers – Use a good CRM that lets you record customer details — i.e. contact info, purchase history, and birthday, among other things.
Put that info to good use – Once you have their information, be sure to use customer data to serve shoppers better. For instance, if you see an order from someone who’s already in your database, acknowledge them for the repeat purchase then send a sincere note of gratitude.
2. The retailer who makes an effort to upsell and educate customers
Think upselling is sleazy or bad for customer service? Not if you do it right. If you take the time to educate customers before they purchase and tailor your recommendations to their needs, I guarantee that the shopper will leave happy.
Case in point: a while back, I took my toddler shopping at our local shoe store for kids. We encountered a great associate who helped him select and try on different pairs of shoes.
The associate then came up to me and said, “I noticed your son’s feet were a bit sweaty. What types of socks is he using?”
I told him we just used standard cotton socks.
“Cotton isn’t ideal for sweaty feet,” he replied. Do you want me to show you some of the socks we have that can help?”
He proceeded to tell me about the various types of socks they carried, the materials they were made out of, and which ones would work best for my son. I ended up buying a couple of pairs, and I was thrilled with my purchase because it did wonders for my son’s feet.
Action steps
Train your associates to upsell and cross-sell – Start by encouraging them to pay attention to each customer and determine any potential needs or wants they may have.
In the example above, the associate took note of the fact that my son had sweaty feet, and then made the right call by recommending the right type of socks for him.
Make sure they educate shoppers – Upselling or cross-selling shouldn’t just be about pushing products. See to it that shoppers know the benefits of the products you’re pitching and why they should buy it.
3. The retailer who finds a way around stockouts
While the best way to deal with out-of-stocks is to avoid them altogether, you can turn an unpleasant stockout situation into a positive one with the right customer service.
Here’s a cool example from Real Canadian Superstore. A customer decided to use the store’s click-and-collect service by ordering her groceries online and then opting to pick up her purchases at the store.
According to her Instagram post, some of the products she ordered were unavailable, so one of Superstore’s employees called her up and offered substitutes.
The whole experience was smooth and efficient, and the customer was so happy with Real Canadian Superstore’s service, that she raved about them on social media.
Action steps
Have a backup plan for stock-outs – When a customer asks you about a product that’s unavailable, make sure you have a better response than “Sorry, but there’s nothing we can do.” Always be ready to recommend substitutes so you don’t miss out on the sale.
Offer to ship from your store/warehouse – You could also offer a service in which you order an item from another location or channel (i.e. your online store) then ship it the customer for free
4. The cashier who forges a local connection with shoppers
This particular example isn’t strictly about retail, but it’s still a great example of notable customer service.
I was purchasing a drink from a local cafe, and the cashier behind the counter noticed that I was holding a business card from a nearby eyebrow threading place. “Oh, you go there too? Aren’t they the best?” she said.
We then had a quick chat about why we love the business and our experiences it with. It was a brief encounter, but certainly a memorable one. I loved that the cashier established a connection by referencing something local that we both liked.
That effort didn’t take much, but it went a long way as far as customer service goes. Why? Because so few people do it. The majority of cashiers just ring up sales and spout impersonal lines like “How was everything?” or “Have a nice day.”
Don’t be one of them. Make the checkout process as pleasant as you can by making an effort to connect with the customer. Doing so could be just the thing that keeps you top of mind and gets them to come back.
Action steps
Be on the lookout for commonalities – Find a way to connect with customers through things you have in common. Do you have similar tastes? Do you frequent the same local spots? Use those commonalities to start conversations.
You don’t always have to push a sale – In the example above, the cashier and I chatted as she was ringing me up at the counter. I was already a paying customer, but she still made an effort to connect with me. Strive to do something similar in your own store. Don’t just chat up a customer because you want to make money off of them. Do it to build a relationship.
Further Reading
Connecting with customers starts with how you greet them. If you need ideas on how to welcome shoppers in our store, this post offers 20+ examples of retail store greetings you’d want to try.
5. The sales employee who takes the time to find the perfect fit
Earlier this year, I swung by the Sunglass Hut location in SoHo, as I needed a new pair of sunglasses. The associate manning the store was super friendly and offered to help after noticing that I was unsure of what to buy.
She took the time to find out what I needed and what my preferences were, and then she walked me through the different brands they had. She then hand-picked pairs of sunglasses that best fit the shape of my head, and even brought out an eyewear tray so we could easily compare different products.
It was a great experience and I appreciated the employee’s sincere effort.
Action steps
Work *with* shoppers to find the right product – Exert more effort to help your customers in need. This could mean different things, depending on your store. For example, you could accompany a shopper to the shelf where an item is located instead of just saying “It’s in Aisle 4.” Or, like the associate above, you could bring out different products to help the shopper compare items.
But be sure to read your customers appropriately – To be clear, not every customer needs an associate to show them around the store. Some shoppers want to be left alone, in which case you shouldn’t bother them. But for those customers who do need assistance, do your very best to help them find what they need.
6. The associate who puts her product knowledge to good use
Product knowledge is an essential component of customer service, so you and your staff must be on top of your merchandise and catalog details at all times. This comes in handy when you’re:
- Talking about your bestsellers
- Discussing the features and benefits of various items
- Teaching shoppers how to use a product
Here’s an example that shows an associate doing all three of these things: I was shopping around for dry shampoo, and I decided to take my search offline. As someone who’s never used dry shampoo before, I didn’t want to rely on online product descriptions or reviews; I wanted to touch, feel, and maybe even test products in person.
I decided to visit the Birchbox store in SoHo to see what they had to offer. Birchbox had a great selection, but ultimately, it was the store’s customer service that made my experience stand out.
The associate I worked with was knowledgeable and helpful; she told me which brands she liked best, what their top-sellers were, and she explained the distinctions between different products.
Then when she learned that I’ve never tried dry shampoo before, she recommended I purchase a travel size bottle instead of pushing me to buy a full sized product. She even showed me how to apply the product to my hair. I walked out of that Birchbox store with a product that I was excited to try, and I was reminded of just how powerful in-store customer service can be.
Action steps
Use the “FAB” formula – The “FAB” formula, which stands for “Features, Advantages, and Benefits” helps you and your associates easily remember what each product is all about.
Basically, features are the components or characteristics of a product while its advantages pertain to what the features can do. The benefit, which is the most important part, is what the customer can get out of the product and its features. For best results, see to it that the benefit you pitch to the shopper is unique to them.
For instance, let’s say you’re selling a pair of sunglasses. Features could include the frame size, the material that it’s made out of, or the fact that it’s polarized. The advantages could be the durability of the pair as well as its ability to reduce the glare from certain surfaces. Finally, the benefit could the fact that it helps the customer see better.
Know your top-sellers – Get familiar with your product trends and bestsellers so you always have handy items to recommend. To make things easier, choose a retail management system that has robust product reporting capabilities. The best retail systems provide you with insights that you can incorporate into your sales, marketing, and customer service efforts.
7. The retailer offering a sincere apology
Things don’t always go your or your customer’s way, and it’s during times like these that your customer service is really put to test. While the “right” way to deal with unpleasant situations will depend on your circumstances, often you’ll fare a lot better if you apologize and try to compensate for what happened.
DSW offers a great example of the right way to deal with mishaps. According to Mikaela Kornowski, Marketing & PR Executive at OFFPRICE Show, “Lost packages, website glitches, and other unforeseen issues are always going to plague retailers, but excellent customer service in light of those mishaps will be rewarded with loyal shoppers.”
“DSW’s website crashed this fall, leaving many shoppers like myself stranded mid-checkout. The next day I received an apology in my inbox with a note letting me know their flash sale was extended because of the mishap. And guess what? I bought the shoes… and a few more pairs since then!”
Action steps
Have an apology ready – Even if the situation isn’t necessarily your fault, saying sorry that a customer is having difficulties can go a long way.
Make it up to the customer – If there was an error on your end, do your best to own the mistake and make it up to the customer. Is there a way to reverse the error? Can you offer a discount instead?
Final words
Customer service is more than important ever. We’re doing business in an environment where consumers have more choices than ever before. How you treat them is a huge differentiating factor and it can turn indifferent shoppers into raving fans.
Bottom line: make customer service a priority at all times.
Managing retail staff is unique. There are many different types of employees, each with their own pros and cons. And when it comes to balancing full- and part-timers, it’s an ongoing challenge. Below, we offer some expert advice on the differences in managing your different retail employees, and how you can successfully motivate and engage your part-time staff.
The differences between managing full-time and part-time staff
First and foremost, it’s important to treat all of your staff equally. Harry Friedman of retail consulting and sales training company The Friedman Group points out that it makes no difference to the customer. “The customer doesn’t know how many hours a salesperson works,” he says.
Michael Patrick, founder and president of MOHR Retail which offers retail management training, echoes that advice. “Don’t treat [part-timers] differently than full-time; everybody’s an associate,” he says.
But, there are still some differences to keep in mind.
Commitment
“If somebody’s working full-time, they’re making a living at it,” says Friedman. Part-timers, on the other hand, have other commitments outside of this job. They may juggle school, another job, raising a family, sports and other activities.
That doesn’t mean you should discount the possibility of a longer-term and more serious commitment, though. “That’s a huge pool of candidates to move to full-time as an assistant or key holder,” Patrick says. “That population of part-timers may or may not move on. If you have a good relationship, they could be your next full-time person.”
Recognition
Full-time and part-time staff both deserve recognition for their hard work and contributions, but it’s difficult to put them on the same playing field when their roles vary so greatly. And part-time staff is often overlooked, especially when it comes to sales numbers.
“Customers are shopping on nights and weekends, so pay attention to the customer wins that [part-timers] have,” Patrick says. “The correlation is not ‘because I work limited hours, I don’t have success with customers.’”
Consistency
Full-time staff typically have a set schedule, regular communication with managers, and are involved in the daily processes of your business. Part-time staff, however, have multiple managers, receive updates in different ways, and are not always privy to the latest important information.
“[With full-timers], you don’t have to work so hard at coaching moments [and] being able to give them individual feedback, and I think that that’s what’s lacking from a part-time person,” says Patrick. “It’s hard to be consistent when they’re there. They’re going to have multiple points of supervision that might not always be the senior manager.”
How to manage your part-time retail employees
Training
Whether they’re working five hours a month or putting in close to 30 every week, the onboarding and ongoing training process is essential. Onboarding is your way to welcome employees to the team. The United States Postal Service sends their employees a welcome kit with a backpack, water bottle and other USPS swag.
Initial training to acclimate staff to your brand and their role within it is also an important step to take for all new hires. The Home Depot, for example, puts all retail employees through the same training, including information about the brand, their respective store, and their role in the company. This is a common practice for many major retailers, and smaller ones can adopt similar approaches to set things off on the right (professional) foot.
Training doesn’t stop after onboarding, though. “You have to create learning and information networks,” Patrick says. Training can take many forms: managerial feedback, on-the-job training, retail consulting agencies and firms and formal reviews.
Those reviews don’t have to be too formal, says Patrick. “Buy them Starbucks. Talk to them. Get to know them personally, and even what some of their career goals are. It’s very interesting to us that some of the best managers become mentors long after the person leaves the retailer, and the reason is they had shown interest in graduations, birthdays, those kinds of things, and what their career goals are.”
Train your management as well. These are your part-timers’ day-to-day contacts, so they should be educated on what it takes to be an effective supervisor.
Communicating
“Part-timers often feel that because they don’t get information, they’re not engaged as much,” Patrick says. “They may not see the manager or any kind of senior leads regularly, so they begin to de-value the time that they’re spending there.”
Provide lots of communication
One problem many part-timers face is not enough communication from their employer and/or management. That’s why it’s important to use several modes of communication, and to over communicate whenever possible.
“There are a number of changes that [part-timers are] not aware of. Merchandise is moved. New merchandise is coming in. Pricing or promotions are changing,” Patrick says. “Retailers are becoming much more promotional and reactive to customer data, so they will do point-of-sale, discounts, and pop-up sales or promotions.”
Daniel Diamonds, a jewelry store based in Evergreen, CO that has been in business for more than two decades, is mostly a family-run business. They do have two staff on the roster, though: one full-time and one part-time, both of whom have been loyal to the company for years. Owner/general manager Kellie Alkayam says part of what keeps them motivated as great retail employees is open and transparent employer-employee communication.
Establish and follow communication processes
You can’t assume that managers have all the information and will communicate it to every part-time employee, says Patrick. “Their schedules are infrequent; they don’t overlap.” And while verbal communication is important, he recommends using other modes as well. “Think about the touch points in the store,” he says.
- Where they sign or clock in
- Employee spaces or break rooms
- Behind the counter and by the cash register
A checklist of the recent highlights should be easy-to-find for all of your staff. “What are the five things you need to know? What’s changed? What’s moved? What’s new? Get some questions in a quick checklist,” Patrick says.
Get on their level / meet them where they’re at
The most effective retail leaders and managers know that feedback should always go two ways. Just as important as it is to provide constructive criticism to help your staff improve, you should be collecting their thoughts on how you can provide a better working environment for them.
This is beneficial both because you’re making your staff feel heard, and you’re getting direction, from the source, on how to best manage your employees. “Asking them is also a way to show respect and value,” says Patrick.
“Engagement is a way to show value, and it’s at the core of motivation regardless of how many hours an associate works in retail.” – Michael Patrick, MOHR Retail
Questions should also help you gauge how informed your employees are so that you can understand if you need to make adjustments to your communication strategies. “Retail leaders need to ask more questions about what part-timers know,” Patrick says.
Here are just a few questions that Patrick recommends:
- How can I communicate with you better?
- Do you feel like you know enough to answer all the questions you get from customers? What else can I share with you?
- When I’m not here, do you know who to go to? Have you had any conversations with them?
- How have your conversations with other supervisors gone?
- How can I support you better?
- What can I do to help you?
- How are you feeling about being here?
- What’s most challenging?
- What’s your experience as an employee here?
- Have I given you everything that you need?
- What would you add to the orientation that we did, that would make this even better or give you more confidence?
Scheduling
Part-timers have the unique stipulation that their scheduling is a bit more complicated than your full-time staff. Many times, full-timers are on a set schedule. With part-timers, though, those schedules can be more diverse. This is both an advantage and disadvantage, depending on the circumstances. And many times, that schedule flexibility is a major benefit in the eyes of your part-time staff.
“The fact of the matter is they are gonna have to work their part-timers schedule occasionally,” Patrick says. Establish, document, and distribute policies that clearly outline how your part-time employees can request time off, get their shifts covered, or adjust their schedule. Get your employees’ scheduling preferences before you hire them, so you can predict what you have to work around.
Consider implementing tools that can help you manage and structure retail staff schedules. Here are just a few:
Nights, weekends and holidays are the norm for part-time retail workers, which means there’s a definite loss of time with friends and family. Patrick stresses the importance of recognizing your team as another sort of family away from home. “It’s almost a source of socializing on its own,” he says.
Especially on holidays, Patrick suggests treating your employees for showing up, a sort of incentive. “It’s a way to say, ‘Look, I know you can’t be with your family, but this is your retail family.’”
Motivating and engaging
Encourage performance through fun competitions
Friedman points out the importance of treating every employee as someone who has the potential to be a high-performing salesperson. That’s why he recommends healthy and fun competitions to keep a performance-based focus in a motivational environment.
“One of the first things that we do is expose the numbers, not only to the individual, but we post them on the wall,” Friedman says. “Everybody knows what everybody else’s average sales are.”
If you have multiple brick-and-mortar locations, you could pit them against each other in a challenge. This helps bond your employees while also pushing them to perform at a high level. This is an approach that Friedman has applied in the past. “Challenge the other stores in the chain for a bet, maybe money, booze or dinner, or the losing team has to come in and clean my store.”
Implement employee programs
Some retailers also put employee programs into place to maintain ongoing engagement. These could be wellness programs with incentives like a free gym membership, or contributions to school tuition. Store discounts is a pretty straightforward and easy way to reward and incentivize your part-time workers, too. “[Part-timers] often work at stores that they would typically shop in,” Patrick points out.
Celebrate staff milestones and events
Just as you would celebrate customer milestones through a loyalty program, you can take a similar approach with your staff. It could be as simple as saying something along the lines of, “You hit 90 days! I hope we get to keep you for another 90.” If you want to go an extra mile, celebrate with gifts, discounts or other perks.
Personal milestones are also important. “Make note of birthdays and graduations and other milestones,” Patrick says. “Knowing who they are is a great way to build rapport.”
When thinking about threats to your retail store, shoplifting is probably number one, right? The idea of someone swiping hundreds of dollars of products into a giant bag and walking out with them is horrifying, isn’t it? Well, unfortunately, there’s a threat that might be even higher on your list: your employees.
A global study of retail theft found that employees who steal from retailers average $1890 in theft, while the average shoplifter will only take about $438. That’s pretty shocking. Of course, it should be emphasized that it is only a small minority of your employees who will actively steal from you. I would also like to add that many of your well-meaning employees may accidentally contribute to your losses by making errors during inventory count or misunderstanding policies or discounts and giving them at the wrong time. I myself contributed to loss at my retail job when, early on in my employment, I believed that a “BOGO” meant the item of great value was discounted.
Types of employee theft in retail
There are numerous ways an employee can actively steal from a retailer these days, but here are few main ones:
Stealing products
Employees might steal products from you, whether to keep for themselves or to sell somewhere on the internet. One classic method for stealing products is to hide something in the trash when they take it out, which they will retrieve from the dumpster later. Employees may also hide small items on their person or in their bags.
Gift card theft
Gift card theft is very popular these days, largely because it’s difficult to detect. There are various methods to pull off this scam, but typically, employees will issue fake refunds to gift cards they will keep. They may also give a customer purchasing a gift card a blank gift card while keeping the loaded one. This form of fraud is dangerous. At the Sak flagship store on Fifth Avenue, a clerk was able to ring up $130,000 dollars in false returns a few years ago.
“Sweethearting”
“Sweethearting” is when a cashier will opt to not ring up goods that a friend or family member wishes to take from the store. It can also be when a cashier falsely gives their store discount to their friends or family members.
Identity theft
This final method of internal theft may not be directed against the store, but is within the same grouping of activities and could cost your store its reputation. Retail employees have ample opportunities to steal customers’ identities. At the store I worked at, for instance, we used to not only take credit cards over the phone but even social security numbers if we wanted to open a credit card for someone. I had, at minimum, hundreds of opportunities a year to keep a customer’s SSN and credit card information with me.
Skimming
Employees have been skimming off the top of the cash drawer for years. Employees who know that you won’t care about a discrepancy of a few dollars in the cash drawer may take advantage of you by slowly skimming quite a large amount of cash over time.
Why do employees steal?
There are likely as many reasons as there are thieves but often, it’s a disgruntled employee. Perhaps they’re stealing for revenge on the store for some reason. Perhaps it’s because they think they deserve a raise that they haven’t gotten. Perhaps it’s because they are in a bad way financially and really need help. But not all employees steal for these reasons either. Some, like those who participate in “sweethearting,” may believe that they’re just helping out a friend with their employment perks. Some, as in my case, may not even realize that they’re actually stealing from the store.
How to prevent internal theft
The first thing to know is that it’s best to simply prevent these situations from happening. Once an employee is actually stealing, it can be a tricky situation to handle. It can even, as an episode of the crime show “Snapped” that still haunts me brutally demonstrated, be a dangerous situation for the person who confronts the thief.
1. Run background checks on all new employees.
Running a background check is a fairly standard process that will help you weed out any clear bad eggs up front. Mikal E. Belicove from Forbes has some good tips:
- He suggests that while you do use background checks, don’t use “the box.” That means, don’t ask someone if they have a criminal background on their paper application just to weed people out. Conduct interviews first and get to know someone first to avoid unnecessary discrimination.
- Be consistent and run the same process on each applicant.
- Look for patterns, rather than a single good or bad act.
- Use a professional agency.
2. Ensure that all employees are well-trained on policy to prevent accidental loss.
As previously mentioned, employees might make mistakes on the job. Whether it’s entering the wrong number of inventory or giving the wrong discount, mistakes happen and they can really add up.
Work with your employees so that they know your policies and check their work. In my case, I learned that BOGO discounts are put on the lower priced item because my manager was checking receipts that day and noticed my error. She pulled me aside and kindly let me know how to do discounts correctly. That short conversation likely saved my store quite a lot of money in the long run.
3. Institute modern inventory management and POS software to make it easier to monitor for discrepancies.
You certainly could audit receipts every day or week or month to try to discover patterns of loss in your store. But you could also just implement a modern inventory management and POS system that will pull reports for you every day. These reports will make it easy for you to notice patterns (like if the cash register has been consistently down a few dollars) and will make it noticeable when you do inventory checks what exactly is missing.
4. Count your cash drawers every day.
You do want to count your cash drawers every day to keep full tabs on how much cash is in them at all times. Running these counts will deter skimming and help you detect it, as well.
5. Use a buddy system for the trash.
Given that the trash is a popular method for employee stealing, have your employees take the trash out together. Thieves are less likely to try to stuff something in the trash bag when someone is there watching them.
This tip is a doubly good, too, because having two people take out the trash is typically safer than having one person take out the trash.
6. Have employees check each other’s bags before they leave for the day.
This tip is a bit awkward, I know. I used to have to do it. Whenever an employee left the store, the manager on duty would check their bag before they left. At closing, the employee left with the manager would also check the manager’s bag. It was always a bit awkward to hold your purse out and let someone else go through it, and it was always plenty awkward to be the person going through the bag, but it certainly made it more difficult for anyone wishing to walk out with an item in their bag.
7. Implement surveillance software.
Surveillance software isn’t just video cameras anymore. Now the cameras are equipped with software that can help them detect such activities as “sweethearting” and alert you to the problem. It’s pretty incredible. These systems are especially good for documenting instances of employee theft.
8. Keep your employees happy.
Happy employees are just better for a business. They’re more productive and less likely to steal from you. The retail industry as a whole has not been the best about seeing to it that their employees are happy, but both Starbucks and Costco stand out. Starbucks, for instance, has eliminated the gender pay gap at their US stores and helps pay for their employees’ college educations. Costco starts their employees at $11.50 an hour and hires almost exclusively from within. As a small business, you owe it to your employees to provide fair pay (even if you cannot provide Costco-level pay) and to do what you can to provide them with a happy work environment.
What happens after someone steals from your retail store?
As I hinted at throughout the prevention tips, employees could still steal from you, even given your best efforts. Once that happens, what do you do?
1. Collect and document as much evidence as possible.
First things first — you cannot just accuse an employee of theft. If you’re wrong or unable to prove it, your company may face legal retribution. Instead, carefully document everything that you can. Run audits, collect receipts, and put together the correct video footage.
Joseph Addams, a third party loss prevention agent, says that he will sometimes allow an employee to steal a few more times before confronting the thief, just to ensure that he has an airtight, documented case.
2. Call your local police station for advice.
Your local police station can provide you with advice on how to document employee theft and even give you interviewing tips. Don’t pass up this help.
3. Interview the employee.
When you finally have an airtight case, bring your employee in for an interview to confront them with your evidence. Be sure to do it when others are in the store and do not tip your employee off beforehand as the subject matter. (You don’t want to end up like the victim in that awful crime show I will never forget.) Addams has some interviewing tips to share as well:
- Prepare all the paperwork in advance, including their dismissal paperwork and, if possible, their final check.
- Keep a witness in the room. Typically another store manager or HR person.
- Begin the interview by telling the employee you just wish to review some LP procedures.
- Though you should already know as much as you can ahead of time, don’t tip your cards. Using various tactics, you may be able to get the employee to confess to crimes you didn’t know they had committed.
- If you are going to prosecute the employee legally, call the cops after the employee has confessed, but continue the interview until the police arrive. And do note: your employee is legally allowed to get up and leave the meeting with you at any time, and you must do nothing to prevent them from doing so.
4. Fire them.
Unless your employee’s reasoning for stealing is along the lines of Jean Val Jean’s reason for stealing bread in Les Miserables, you will need to fire the employee. (And if the reason is as noble as Jean Val Jean’s, you should look into what you can do to help the employee get to a better place in life.) You do not necessarily need to prosecute your employee legally, especially if the theft is marginal, but you cannot have anyone working for you whom you do not trust.
Conclusion
Internal theft can cost you thousands of dollars and is one of the biggest threats to your business. But by enacting careful policies and using the right technology, you can mitigate a great deal of your loss.
This is, after all, the moment that everything else in retail is working towards. As such, it’s obvious that your cashiers must be well trained so that everything goes smoothly.
Retailers tend to approach cashiers in two ways. The first is the way that a store like Walmart approaches it: sales associates spend the whole of a shift behind the register, ringing whoever queues, but not leaving the desk until they’re told to. The second is the way that many mall stores, like Ann Taylor, will do: sales associates will ring customers as necessary. Nowadays, those sales associates may not even get behind a desk to ring but may use a mobile POS to ring right on the floor.
Either way, all of them need to be trained to be excellent cashiers to guarantee that your store is providing top-notch customer service and closing sales well.
What to teach your cashiers
1. Customer service skills
A fully rounded training in customer service will serve your cashiers well, but if you only have time for a few things, these are the customer service skills cashiers need to develop:
General friendliness – General friendliness is essential. Your cashier will need to smile and greet customers if they haven’t previously been working with the customer on the floor.
They’ll need to display a positive and upbeat demeanor throughout the interaction to ensure the customer has a remarkable experience. Friendliness is such an important skill that Michael Connolly of Connolly’s Do It Best Hardware & Rental says that he hires for friendliness over skill.
Greeting – Depending on your store layout, cashiers can be the first people that a customer sees. They need to be equipped to get your customers’ shopping experiences off to a positive start, as well as answer their questions and direct them around the store.
Cross-selling – Your cashier will also be the last person to speak to the customer before the sale is officially closed, meaning they have a crucial chance to confirm the customer has found everything they need or to add-on to the sale.
Cashiers who haven’t been working with the customer on the floor should ask if a customer has found everything they were looking for. They should also be trained to ask customers if they’re interested in purchasing whatever small cross-sell you keep at the desk (think gift cards or trinkets). For this interaction, you may want to provide scripts, like Church’s Chicken does.
Handling angry customers – At many stores, cashiers are the first stop for returns or concerns, and thus, angry customers. So, you’ll have to be sure they’re prepared with the skills (mainly active listening skills) to diffuse situations and turn your angry customer into a happy one. Be sure to arm your cashiers with “phrases of courtesy.” Renée Evenson, the author of Powerful Phrases for Effective Customer Service, suggests such phrases as “I apologize” or “Will you?” instead of “You will” can make a big difference in dealing with an angry customer.
2. Store policy
It’s imperative that your cashiers know your policies inside and out — particularly when it comes to sales and returns. A cashier who doesn’t know store policy will cost you a lot of money in discounts, fraudulent returns, or manager hours.
In addition to knowing your official store policies though, over time (as your new cashier becomes a trustworthy employee), you also want to let them know how much autonomy they have over making decisions. After all, a good store will, in the name of customer service, take late returns or offer certain discounts when presented with the right circumstances.
3. Actual use of the software/processing the sale
Obviously, your cashiers must learn how to work your POS hardware and software in order to process a sale or return. The skills involved here will be, among other things:
- Logging into the software
- Initiating a sale
- Looking up customers and their previous purchases
- Looking up products
- Initiating a return
- Returning without a receipt
- Taking mobile and card payments
- Handling cash: giving change and checking for counterfeit bills
- Processing a check payment
- Reloading the receipt paper correctly
- Processing gift cards
- Applying promotions
4. Packaging
Packaging items is a huge part of your branding and post-purchase experience, as Costco knows. They’re famous for not bagging their items because it looks too much like a regular retail store, and they prefer to seem more exclusive. Ultimately, your cashiers will be the employees responsible for providing this part of the experience, and so they must know how to package or bag your products according to your branding.
5. Working the POS
Your cashiers will need to know how to run some of the administrative elements of your POS to varying degrees. For your most trusted cashiers, you will likely want to teach them how to close out a register and run some sales reports. Some businesses find it most efficient for all their cashiers to be able to close out.
How to train your cashiers
1. Use any training materials from your vendor
One of the first things you should do is sit your new cashier down with any training resources that your software vendor may offer. (Hey, Vend customers: Here’s ours!) These resources will provide a good baseline for your new cashiers to understand how the software will generally work. This will save you some time, but it will also ensure that you help employees of all learning styles actually get your software down pat.
2. Make it easy for them to memorize PLUs.
For cashiers in certain types of stores, especially grocery stores, it can be a real time saver to know product codes off the top of their head, rather than having to look it up every time they ring. Giving your cashiers sheets or flashcards to help their memorization during off-hours can be a helpful training practice. For reference, here are flashcards for Kroger’s PLUs.
3. Practice!
Experience is the best teacher of all, so get your cashier some hands-on experience next. You can walk your new cashier through a practice sale or two on an empty register. Also, walk them through a practice return!
4. Have them shadow your best cashier
Once your trainees have started to get basics, have them shadow your best cashier so they can see real-world “checkout” situations. Cashiers face a lot of different and often unexpected situations throughout the day and the only real way to learn is to observe or participate in them. Your best cashier can explain how policy and technical uses of the POS get applied depending on what a customer is buying or returning.
5. Start them off during off-hours (with a shadow)
Once your new cashier has spent some time watching the best, the only way left to learn is to actually get hands-on experience ringing up sales. It’s best to set them up during off-peak hours, perhaps wearing a badge that lets customers know this cashier is brand new (and asks for their patience).
You’ll also want to have someone shadow them for the first couple of sales, just to be sure everything is flowing well. And even when that person stops actively shadowing, they should remain close by when the new cashier has a question (as they inevitably will).
6. Provide customer service training
We have a numberofposts on our blog about how to train retail employees in customer service, so I’m not going to give the whole massive rundown here. But here are some tips that you should definitely use with your cashiers:
Role-playing – Role-playing is a perennial favorite for customer service training because it allows you to create a low-stakes hands-on learning environment, and ultimately customer service skills are best learned through experience. In the words of Bob Phibbs, retail expert, “the more role-playing your team has under their belt, the less likely they’ll sell from their own wallet, give bad customer service, or be stymied by some of the more margin-improving retail sales techniques like adding-on.” (Bob’s tips on role-playing can be found here.)
Teach your cashiers the essentials of greeting and conversing – That means teaching them small talk phrases, encouraging them to let customers know (in a non-creepy way) when they remember helping them last to build a connection, and finding or creating common ground with your customers. You can go over these skills in role-playing and/or give your cashiers scripts to learn.
7. Set realistic goals
You’ll want to set some realistic goals for how quickly your sales associates should be able to learn how to work the register efficiently. I say this because when I worked the floor at a women’s clothing store, there were at least a few older employees who never figured out how to work the POS software in their months of employment.
And while you do want to make sure that you’re using intuitive, user-friendly POS software, you can’t have employees intended to ring who never learn how to use your registers well. It creates more work for your other cashiers and can run up real lines and make customers needlessly angry.
Some goals you can set in order to see to it that, after you put in your very best training effort and you’re certain you’re using good software, you’re employing people who are doing well:
- An amount of time it should take to learn the register. You can be generous here, but something like 40 hours is a very reasonable amount of time it should take for someone to get up and running on easy-to-use software.
- Items/minute goals. Once your cashier is up and running, if your store is high-volume enough, you can set goals on ringing efficiency to continually make certain your cashiers are keeping up with your standards.
Conclusion
Training your cashiers is a vital process, but good training combined with great hires will result in an efficient closing experience that your customers love. A strong interaction with a cashier can leave a lasting impression on a customer and drive their loyalty.
Lisa Miles-Heal, General Manager and Chief Technology Officer of global technology company, Unleashed Software, discusses the tech gender gap, its implications and what more needs to be done.
As a woman running a global business in the tech industry, I feel a personal responsibility to encourage more women into the sector as well as recognising the business imperative in doing so – increased diversity leads to better teams and decisions, and ultimately better products and services that more closely reflect customers and their needs. Sadly, I still see an on-going problem in attracting women into the technology sector – not just in the UK, but globally.
In my experience, the reasons for the tech gender gap are not clear-cut. For many women, it’s a perception or knowledge gap that often begins at an early age. Schools, universities, industry and parents are still failing to show young people – especially girls – the diverse range of jobs and career options open to them in today’s world if they have an interest in Science, Technology, Engineering and Mathematics (STEM). STEM careers today are highly creative, requiring skills in understanding people’s behaviours, communication and team-working skills, and understanding how to develop tech-based solutions for the needs of modern-day society.
For many women, it’s the lack of successful female tech role models that is also an obstacle. For others, it’s a lack of confidence in the value of the skills and approach that they can bring to a tech role. At Unleashed Software, we have been involved in several programmes in our business birthplace of New Zealand to demonstrate to young people the exciting range of options open to them through a career in technology. It’s important to communicate that not everyone has to be a programmer or a coder.
As a tech company, we need people who can build relationships with our customers, problem-solve and manage change – skills that we have no problem finding within our female hires. I want to promote what can be achieved through technology as a business enabler, as opposed to putting the emphasis on specific technical skills. We run a highly collaborative business, not one where people sit in silence hunched over PCs.
I also speak at school careers events, recounting my own personal career journey as I am keen to use my voice as a female role model in the tech industry. I particularly like to focus my efforts on schools in disadvantaged areas, explaining how progressive and meritocratic the tech industry is. My experience has been that the tech sector is free from prejudices based on who you are, your background, or which school you went to. We need to get this message over to the kids who need to hear it.
I am very happy to say that, at Unleashed Software, our workforce is approaching gender parity. We have a ratio of 41% women to 59% men and we find it equally easy to hire both female and male graduates. This is not the case at higher levels of responsibility.
It’s interesting too when I reflect on my own company’s work. In the past, inventory management has been all about physical stock control, meaning that roles in this field were largely held by men. Today, the impact of technology now means that these roles have changed to operations management – focusing on systems and solutions where problem solving skills are essential to investigate how assets can be deployed efficiently across a business. Also, many of our customers are now female entrepreneurs so it is important our team reflects this too.
There is a real opportunity for industry and the education sector to work together to inspire all young people about technology careers to ‘future-proof’ them (and our industry) by identifying and developing the skills required and to build a rich talent pipeline. After all, the tech sector is global by nature and offers rich and exciting international careers for those who want them.
We should also be encouraging young women to be braver, more open-minded and to push themselves past the barriers of perception put up by others (and themselves). Visible role models can play a vital role in helping to break down many of these barriers. And, finally, we need to make sure that the technology sector provides an attractive and inclusive working environment in which people from all backgrounds are enabled to reach their full potential.
The Harvey Weinstein scandal is back in the news this week – and it’s a reminder that we should seriously think about how we recognize and prevent sexual harassment in the workplace.
Following a four-month investigation, the New York attorney general’s office has filed a lawsuit against Harvey Weinstein, his brother Bob Weinstein, and The Weinstein Company. It makes for sobering reading, alleging that the Weinsteins created a toxic work environment with a pattern of sexual harassment.
Attorney General, Eric Schneiderman said in a statement, “The Weinstein Company repeatedly broke New York law by failing to protect its employees from pervasive sexual harassment, intimidation, and discrimination”.
#MeToo movement
The Weinstein allegations have spurred the #MeToo movement around the world, and with it, an outpouring of grievances from women in Australia, despite sexual harassment being outlawed here for more than 30 years.
Introduced in 1984, The Sex Discrimination Act defines sexual harassment as taking place when a person:
- Makes an unwelcome sexual advance, or an unwelcome request for sexual favours, or
- Engages in other unwelcome conduct of a sexual nature.
Sexual harassment is also deemed to have taken place, as the law says, in circumstances in which a reasonable person would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.
The Act takes a broad view of sexual harassment and includes:
- Unwelcome touching, hugging or kissing, leering
- Suggestive comments or ribald jokes
- Persistent sexual innuendo or insults
- Unwelcome requests for sex
- Intrusive questions about an employee’s private life or body, along with
- Criminal matters such as sexual assault, stalking or indecent exposure.
Sexual harassment does not have to be repeated or continuous to be against the law. It can be a one-off incident.
Some of the most frequently reported forms of physical sexual harassment include unwelcome touching, hugging, cornering or kissing; inappropriate physical contact; and sexually explicit emails or texts.
Despite tough laws and a broad definition, sexual harassment in Australia is a big problem. According to the Australian Bureau of Statistics (ABS), sexual violence against women is on the rise.
In the Personal Safety study of 2016 17% of women said they had been sexually harassed in the past year, up from 15% in 2012. For men, sexual harassment was up from 6.6% to 9.3% during the same timeframe.
In light of these numbers and the growing confidence of individuals to speak out against sexual harassment at work, we may see a spike in sexual harassment complaints this year.
What employers need to do
One of the main charges in the Harvey Weinstein saga is that the company’s executives knew about the claimed abuse – but did nothing about it.
In fact, a great many sexual harassment complaints made to the Human Rights Commission here in Australia are not about the harasser. They are about the failure of the employing organisation to respond adequately to the original sexual harassment complaint.
As the Human Rights Commission says, “As an employer, you may be held legally responsible for acts of sexual harassment committed by your employees.”
The Sex Discrimination Act makes you as an employer liable for acts of sexual harassment unless you have taken all reasonable steps to prevent it from taking place.
This means you need to recognise sexual harassment, and do all you can to reduce the risk of it happening in the first place.
As a start, you need to establish the following:
1. A clear, plainly worded sexual harassment policy
Make it clear that you have zero tolerance for harassment in any form, and make sure your sexual harassment policy includes:
- Your company’s position on sexual harassment
- A clearly worded definition of sexual harassment and specific examples of where sexual harassment may happen e.g. work conferences, celebration events like the Christmas party, work trips, etc.
- A statement of what is not sexual harassment such as behaviour that is mutually acceptable to the parties concerned
- The consequences for employees who breach the policy
- Responsibilities of direct managers and co-workers
- Information on where employees can get help, or make a complaint
2. Effective communication of the policy
As we always say, it’s not enough to have a strongly worded workplace policy on sexual harassment, or any other workplace issue. You must apply the policy consistently across your business, and you must enforce it.
This means you should:
- Formally communicate the policy to all employees
- Provide training if required
- Ensure your employees sign a statement of understanding, and
- Retain the signed documents
3. An accessible process for dealing with sexual harassment complaints
You should nominate a senior employee (this could be you!) or the owner of the small business you work for as a sexual harassment complaints officer.
You also need to provide several different ways in which an employee can make a complaint in the event this senior employee is the harasser.
As sexual harassment complaints are often complex, sensitive and potentially volatile, you should ensure your complaint procedures are:
- Clearly documented and explained to all employees
- Timely and confidential, and address complaints in a fair and consistent manner
- Based on the principles of procedural fairness
- Administered by trained personnel
- Structured to provide clear guidance on internal investigation procedures and record keeping, with appropriate disciplinary outcomes
- Regularly reviewed for effectiveness, and give employees assurance that they will not be disadvantaged for making the complaint.
Your company’s dating policy comes into play, too. Companies like Google have created a ‘one chance’ policy to draw the line.
Avoid legal and reputation risks
Should an employee engage in sexual harassment in your place of work, the only way the company as the employer is not going to be held accountable is if you can demonstrate you took all reasonable steps to prevent the conduct happening.
Take the time now to update your policies, and procedures to make sure your staff know sexual harassment in your workplace won’t be tolerated and will be investigated.