Glossy/Bethany Biron: How Gap is improving employee productivity to boost brick-and-mortar sales

Glossy

How Gap is improving employee productivity to boost brick-and-mortar sales
by Bethany Biron
APR 17, 2018

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Gap Inc. is experimenting with digital strategies intended to improve the productivity of its sales associates, in turn enhancing the customer experience and bolstering sales.

Coming off its fifth consecutive quarter of sales growth led largely by Old Navy, Gap Inc. is focusing new methods of using technology to help its struggling namesake brand. After closing several low-performing stores in the fourth quarter of 2017, Gap announced last week that it will implement new digital-focused policies for sales associates including using sales data to more efficiently staff stores during expected periods of high foot traffic. It’s also rolling out a mobile app across its store network designed to help employees manage shifts and make schedule changes. The updates were inspired by an employee productivity study that Gap first commissioned in 2015, which ultimately found establishing a “more stable schedule” environment aided by technology correlated to higher sales.

“We use data and customer insights to drive our business – including the customer experience inside and outside of stores — and we’re constantly learning how to read and respond to data in a way that doesn’t create imbalance,” C. David Ard, svp and global head of people at Gap said in a statement. “The apparel retail business is complex, and we’re working diligently to make meaningful improvements that benefit our employees and customers.”

As part of the experiment, conducted in partnership with professors at University of California and University of North Carolina, researchers chose 28 Gap stores in San Francisco and Chicago, and randomly selected locations to abide by an updated employee policy. The changes included eliminating on-call shifts, ensuring managers made schedules in a timely and resourceful fashion informed by projected foot traffic data and giving staff members the ability to switch shifts using Shift Messenger, a mobile app that allows colleagues to mutually agree to swap hours without supervisor approval.

The study found that, in stores with new policies, sales increased by 7 percent and labor productivity increased by 5 percent. Further, the researchers estimated that the eight-month experiment helped Gap earn a total of $2.9 million by reducing losses from low productivity, a significant return on the $30,000 Gap contributed to the program.

“Unlike the typical way of driving sales through increase in traffic, the sales increase from our intervention occurred due to higher conversion rates and basket values made possible through better service from associates,” the researchers stated in the report.

Andrew Park, vp of customer experience strategy at InMoment, said efforts like Gap’s are becoming increasingly important to retailers navigating significant changes to brick-and-mortar retail amid increased competition in e-commerce. It may also help the growing retail employee turnover rate by staffing workers in environments that maximize their potential and lower dissatisfaction. According to the National Retail Federation, the retail industry has a 60 percent turnover rate that annually leads to a collective 230 million days of lost productivity and a loss of $19 million to support new hires.

“A lot of times, companies are focused very heavily on the customer experience and forget how important it is to think about employees first. It can have great returns. It’s an important place to focus and hone in on to take care of their employees,” he said.

Image courtesy of Gap

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