Merchant Innovation

Forget $15 Per Hour — Retailers Must Revamp Everything Else

As the sharing economy absorbs more and more verticals like an economic blob, the status of the American employee is increasingly being pushed onto unsteady ground. Just where do drivers for Uber or pickers in an Amazon fulfillment center stand when it comes to their legal relationship with the company they “work” for?

Retail work has always been seen as somewhat of a transient employment prospect — from the teenagers working summer breaks to the single parents who pick up extra shifts to cover the bills — but what if investing in retail workers can not only keep them in the system longer, but produce a skilled crop of customer service experts in the process?

It appears as if Walmart, one of the few remaining pillars of the brick-and-mortar retail world, is taking an experimental step down that path. In a Wednesday (April 6) brief, the Walmart Foundation and Aspen Institute announced that a $5.5-million grant would be put to use for research into how the modern American retail worker has fared upon the shifting sands of the eCommerce revolution as well as what can be done to develop more attractive career paths that hopefully lead to a new generation of talented employees that don’t see retail work as a temporary launching pad to something better.

“Through our collaboration, we’re working to encourage innovative practices among retailers that are succeeding today by investing in their workers and building their skills,” Maureen Conway, vice president of policy program and executive director of the Economic Opportunities Program at the Aspen Institute, said in a statement. “The lessons learned from the retail sector have relevance beyond retail, and will meaningfully contribute to the broader national conversation about the business practices, local programs, and public policies needed to promote a strong economy and provide expanded opportunities for all workers.”

Because the Walmart Foundation and Aspen Institute partnership is just an expensive promise at this point, it’s hard to tell just how committed the retail giant is to reinvesting in its sprawling workforce, many of which have been very vocal about some decidedly anti-worker practices in the past. The statement discussed vague plans to improve opportunities for career advancement, store-to-store mobility and retention strategies for those low-level greeters and cashiers who aren’t likely to shoot up the ranks, but it’ll be months before the research is out and many months more before anything actionable is likely done with the information.

Perhaps it’s not incumbent upon retailers alone to look after the economic well-being of their employees. California’s recent decision to bump the state-wide minimum wage to $15 may seem like a step in the right direction, but do higher wages alone translate into happier employees more likely to stay in retail? Costco has seen success with a minimum hourly rate of $13 and an average of $21, but waiting for that to propagate from wholesale merchants to big-box sellers like Walmart will take many years and many more legislative battles.

Therein lies the potential wisdom of the Walmart Foundation’s decision to spend $5.5 million not on increasing wages, but on researching what else can be done to make retail work more fulfilling than it may be at the moment. What constitutes a minimum wage is a sliding scale based on the costs of living in the larger economy retailers like Walmart have no control over, but what they can control is the benefits, working conditions and mobility opportunities they offer.

Look no further than the mess Starbucks found itself in two weeks ago when a labor advocacy group sent out a hoax email claiming that the company’s annual shareholders meeting had been postponed due to “exigent business needs” — a tongue-in-cheek reference to the coffee chain’s much-maligned practice of putting their baristas on shifts with little prior notice, The Seattle Times reported. The meeting eventually went off without a hitch, though CEO Howard Schultz still had to address the issue when asked a direct question about it from one of his shareholding baristas in the crowd.

“We understand the issues,” Schultz said. “We think they’re critical. I can promise you we’re digging in on this and trying to solve it.”

While this might sound like corporate lip service, the record actually backs Schultz’s claims that Starbucks isn’t seeking every opportunity to exploit low-paid workers however it can. After all, it’s been nearly two years since Starbucks instituted a new benefits package for employees that offered partial and full tuition assistance for college students admitted to Arizona State University‘s online program, which joins other perks nominally reserved for corporate employees, such as free restricted stock options and health insurance.

It’ll be a slow process, likely even slower than the national fight to raise minimum wage. But if things go as planned, Starbucks and Walmart may be able to foster a new culture of retail employment that isn’t seen so much as a sterile transaction of labor and paychecks, but rather one where employees don’t up and go at the first sign of better opportunities elsewhere.


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