Retailers are finally catching on to employee experience - but there's a knowledge gap ahead

Jon Reed Profile picture for user jreed March 1, 2018
If your employees are unhappy or poorly trained, forget about customer experience. At NRF 2018, Nudge Rewards made their case on how to solve the knowledge gap between customers and employees. It's all about the app.

Nudge Rewards app screen shot, NRF 2018

As I wrote in my NRF 2018 retail review, it was good to see retailers finally get serious about employee experience - the overlooked key to customer experience.

But employee experience invokes its own set of problems. See: the potential "knowledge gap" between product-savvy consumers and store associates.

We've created a retail knowledge gap

Even digitally-wired retailers struggle with this. As you empower customers across channels, store employees face new struggles. Take it from Scott Baldt, Senior Director of Omni-Channel at Off Broadway Shoes and Rack Room Shoes. As he told me in How Rack Room Shoes turned omni-channel pursuits into ROI:

In a lot of ways, we’ve created a knowledge gap... In some cases, we’ve armed the customer with more information than we have the associate. So that’s one of the things that we’re focusing on right now is to make sure that all sides of the equation have access to the right types of information to make that as smooth as possible.

I met one vendor at NRF 2018 that is tackling employee experience head-on: Nudge Rewards. During an interview with co-founder Jordan Ekers, we got into why Nudge Rewards is betting their business on employee engagement.

The "frustrating delta" between store associates and consumers

"Employee experience" is the hip term, but we should keep in mind this doesn't just apply to employees. As storefronts re-invent with pick up centers, all kinds of workers might come in contact with customers. Nudge Rewards' mission: empower any retail associate that comes in contact with a customer, as well as their managers.

Ekers explains the frustrating “delta” between the empowered customer and the disempowered store associate:

Over the last four or five years, retailers have invested so heavily in improving customer experience investments. So we as consumers, we can buy something online; we can research online; we can have something shipped to our door, and so we have these amazing expectations for what it means to be a consumer in all of these touchpoints.

But we still value the store interactions:

At the end of the day, 65, 70 percent of consumers still want to walk into a store and have that human interaction. We now live in a world where you have the knowledgeable consumer, and what we often call the inadequate or under-supported employee. The delta between the customer experience and employee experience is a frustrating experience which is not optimizing every customer that walks through the front door.

"The way brands engage with employees is archaic"

The hope? Putting better retail tech in the hands of workers:

Our belief is that software can help make the average employee exceptional.

That's a strong statement. So how it is done? One thing we do know: email isn't going to get it done:

82 percent of frontline employees in retail do not have an email address.

That gets more problematic with Generation Z:

These are the digital natives. These are the people where software plays such integral parts of their lives. When you look at the way that brands are still actually engaging with employees, it's archaic.

Even as customers get more demanding, the old ways persist:

The way brands currently mobilize their team is literally emailing the store manager, then there's that verbal communication from the store manager to the team. So the team now, cross your fingers, is hopefully executing what you want them to execute on. The reality is it's an entirely broken communication cascade. Employees have inconsistent knowledge; therefore they're delivering an inconsistent experience

Nudge and the smart phone training solution

But there's a silver lining: employees have a powerful training device with them at all times (their smart phone). And, as Nudge Rewards will attest, they are eager to upskill if given the chance. Enter the Nudge Rewards app:

We built a solution that allows retailers the ability to effectively communicate with frontline employees around any outcome in the business to improve the customer experience. So an example could be, if a retailer is rolling out a new product launch, through Nudge, they can issue a challenge out to their thousand locations to say: whichever location can drive the highest sales in the next month can win a prize.

Then, through Nudge, they can actually deliver content directly to frontline staff through their own smart phone. It's a great way to train them on what the product is, what the promotional details are, and the best practice on how to sell something.

Frontline associates and managers get started by downloading the Nudge app on their Phone, Android, or Blackberry. Once installed, push notifications do the rest. But what about results?

For any app, results start with adoption. On average, Nudge sees 70-80 percent adoption. Since it's a voluntary app, that means employees are choosing to download the app:

It demonstrates that appetite and that desire to actually engage with the brand.

These numbers support Ekers' view that brands can - and should - communicate better:

If you actually look at all employee engagement surveys across the largest retail companies in the world, one of the biggest pieces of feedback from the employee frontline is they feel disconnected, and that the brand doesn't properly communicate with them.

The smart phone is the brand's trojan horse of employee engagement:

If retail brands are hearing from their employees that they want to be more connected, there's no better mechanism than their smartphone because they're completely addicted to it.

Ekers almost lost me when he started talking about gamification and incentives. Nudge has built-in "challenges" within the software that reward people with points for consuming information and learning about different products. But there's a difference here. It's not about individual competitions:

We have a philosophy that mobilizing a team is more powerful than mobilizing an individual 100%. So rather than just rewarding a sales rep for nailing it, we set up challenges where teams compete against each other.

That addresses my biggest gamification concern: elevating rock stars at the expense of team morale.

Now the rockstar is sharing the best practices. It's a part of our other belief that is every business has their exceptional performers. We can understand who those exceptional performers are, and surface their best practices. We can then actually elevate the entire capability of the team.

The wrap - turning cell phones from a productivity enemy to an engagement tool

Nudge is aggressively pushing into analytics and crowdsourcing employee input/intelligence. One key effort is comparing overall Nudge "Scores" to a store's sales (transactional performance). Ekers' team is seeing a correlation:

If you look up the Nudge Score at the location level and compare it to the transaction performance at that location, there's a direct correlation between a high Nudge Score and their performance. So we've actually created this data which is a median indicator to anticipate the performance of a team.

Typically, employee satisfaction surveys are yearly, slowing down the incorporation of input and the chances for course correction. Nudge's Employee Pulse reaches out to employees monthly, pulling their input.

I remain cautious that a technical tool alone can solve employee engagement. Issues of front-line compensation and retention plague retailers; more effective store associates will expect more in return. Still, there is logic in Nudge's efforts to turn the phone from a productivity enemy to an engagement device:

Four years ago, retailers wanted to ban these devices... Now they've recognized that rather than an employee going on break and looking at Facebook, why not take advantage of that moment of free time to actually have them learn something about the business, to improve their performance?

As of NRF 2018, Nudge Rewards counted 30+ customers in retail and food service, and growing fast. The numbers Ekers gave me were impressive: Nudge retail customers are seeing 50 to 60 percent lifts in product sales. In food service, there is a a four to six percent lift in average check.  To get a better feel for those results, I hope to do a use case on one of them. For now, I can't quarrel with Ekers' mission:

There is no better place to get ideas to improve the business than your frontline. They're the ones that interact with guests on day to day basis. They're the ones that are experienced in customer objectives and problems. We just need an effective way to ask, "Hey, 30,000 employees, what problems are you experiencing on a day to day basis, and how do we help you solve them in an effective way?"

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