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How will ecommerce impact on store staff remuneration?

Compensation Strategy & Design|Total Rewards
Beyond Data

June 27, 2018

The role of the physical retail store is challenged by the rise of customers purchasing online, so how should you react to keep up?

The role of the physical retail store is challenged by the rise of customers purchasing online. The continued growth in online sales of goods and services at a much higher rate than sales in stores leads us to believe that a store may have to re-invent itself and become more than selling, with the financial transaction becoming less of a key activity. As activities change, reward programs may be re-designed to help support the new focus of store employees. With this in mind and recent demand for data on this topic Willis Towers Watson Data Services launched the 2018 Store Manager Pay Mix Pulse covering France, Germany, Italy, the Netherlands, Spain and the United Kingdom where 48 organizations participated.

If retailers focus on the decrease of in-store-sales, we would expect a change in impact of non-store revenue related performance measures such as customer satisfaction, stock management, staff turnover, loss prevention. The study shows that currently most store managers have such performance measures in place. Half of the participants predict that the impact of such measures on the variable pay will remain the same within the next three years, the rest are either unsure or expect the impact to increase. Change is to be expected.

Store revenue is not surprisingly a performance measure for most store managers. This is an area where we may expect change if the purpose of the store will continue to be a revenue generating one, or if it will be to primarily support ecommerce activities. When participants were asked how the impact of store revenue on the variable pay will change, visions diverged. Even if a good proportion expected the impact of such a measure to remain as is, many were uncertain.

Finally if a store’s focus will be to support the sale of products online, through for example more show-room related activities or by supporting the pick-up of goods, the question many organizations ask themselves is how they will be able to recognize the online success of such efforts. Even if few store managers currently have targets that are linked to online revenue, we see that many organizations plan to introduce this within the next three years. The question then is how the organization will link online revenue to a particular store?

Answers to this and further detail on related topics are available on a per country basis in our study. Please do not hesitate to contact us if you would be interested to receive a copy or learn more about our Retail Compensation Survey offering in general.

Key insights include

Infographic image showing the key insights of how ecommerce will impact store staff remuneration
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