I’ve been following the minimum wage hike debate for years. As a store owner, minimum wage had a direct impact on our bottom line. I never wanted to pay minimum wage to my team because I never expected minimum work. Yet, in retail, there are only so many dollars to go around. Add more to the payroll and you have to subtract from somewhere else, or grow your business enough to cover the added expense.
One of the arguments often used by those opposed to minimum wage hikes is that it would lead to more automation. I can envision that reality in big corporate chains for two reasons. The first is that many retail corporations don’t do anything to train their employees to maximum effectiveness. The second is that these same corporations also don’t value their employees or expect anything out of them. (Does anyone see the vicious downward cycle in this thought process?)
The reality of automation is coming to a Walmart near you. Walmart is testing robots in select stores in Arkansas, California, and Pennsylvania to help scan and stock shelves.
Jeremy King, chief technology officer for Walmart U.S. and e-commerce, said that the robots were 50% more productive than their human counterparts but would not replace workers or impact worker headcount.
Are you buying that? Do you really think Walmart is going to invest in robots that are 50% more productive and still pay all the displaced workers at the same time?
Automation is coming to the big stores and it will have a huge effect on their bottom line. First, they get a tax break for investing in capital infrastructure. Second, they get to replace less-efficient employees with robots who have no restrictions on hours worked, overtime, vacation pay, healthcare, etc. That’s a win-win for them.
It can also be a win for you. The more they automate, the more you differentiate. Automation is designed to give a consistent, expected, reliable outcome. It isn’t designed to surprise and delight. (Then again, neither is an untrained team, like what the big corporations are using now.)
Our payroll at Toy House was not only a higher percentage than any of our competitors, it was higher than most independent toy stores. Why?
Amazing customer service from a well-trained staff is the best, most effective form of advertising and marketing you could ever conceive.
What’s more powerful? Me telling you on the radio to shop at Toy House or your best friend telling you why she likes shopping at Toy House? What’s more persuasive? Me on a billboard on your drive home or your co-worker saying you should visit Toy House?
You don’t have the resources to invest in robots like Walmart does. But you do have the resources to invest in training for your staff. You do have the resources to pay your staff more (and expect more out of them in return). You do have the resources to make your customers’ experiences so wonderful they have to tell their friends. Call it your advertising budget if you want. But put your money into your staff. That’s where your ROI will be highest.
Investing in your team will always beat automation and minimum wage hikes. Always.
-Phil Wrzesinski
www.PhilsForum.com
PS Not sure how to raise the bar on your customer service to the point that people talk? Here are two free resources from my website:
Use those as a starting point for crafting your own training program.
If you need more, I can suggest a few good people to come in and work with you and your staff, including one guy who used to run a pretty cool toy store with a huge payroll.