(Reuters) - Major retailers are looking to stimulate anemic sales by hiring thousands of more workers this holiday season to improve customer service on their sales floors and handle the fast-growing use of their stores to fulfill online orders.
The move comes as several analysts note that retailers have lost sight of basic in-store customer needs as they scrambled in recent years to compete better with Amazon.com Inc (AMZN.O) by cutting costs through store closures, offering more mark-downs and pouring millions into building out e-commerce platforms.
“In the last two or three holiday seasons, retailers have been so focused on digital, that perhaps they haven’t paid enough attention to their stores,” said Carol Spieckerman, president of retail consultancy Spieckerman Retail.
As online purchases become a growing percentage of total sales, retailers want to be better prepared for the spike in online order volumes during the holidays with stronger on-the-ground support.
Last week, Target Corp (TGT.N) said it would hire 100,000 temporary holiday workers, up from the 70,000 workers it has hired in each of the last four years.
“I think brick-and-mortar (stores) are throwing down the gauntlet and saying, we are going to have more customer facing employees to try to hopefully take advantage of the competitive aspect that might be hard for online retailers to duplicate - that service and expertise in stores,” said Christian Magoon, chief executive officer of Amplify ETFs.
ChargeItSpot, which provides cell phone charging stations at retailers such as Nordstrom Inc (JWN.N), Neiman Marcus and Under Armour (UAA.N), said it found in a survey that 63 percent of consumers thought store associates are “extremely important” when they shop, said Douglas Baldasare, chief executive officer of ChargeItSpot.
From helping customers find the right size of jeans to answering questions on the durability of specialty gear, store employees help build sales, Baldasare said.
Extra workers could also help stores combat the frenzied atmosphere that comes with holiday shopping.
“If you have customers walking around and cannot get help, that’s a big problem,” he added.
The brick-and-mortar retailing industry has been trying to recover from years of declining sales and mounting losses.
Macy’s, J.C. Penney (JCP.N) and others have closed hundreds of stores amid cut-throat competition that includes a growing number of online shopping sites.
The list of retailers filing for bankruptcy this year is set to eclipse the 20 bankruptcies filed during the 2008 financial crisis, according to AlixPartners, which advises distressed companies.
By adding more workers, retailers are also offering consumers hassle-free shopping experiences, giving customers more accessibility to pick up and return goods ordered online.
Retailers need to minimize the wait time in a line to pick up online purchases if they hope to compete with online rivals effectively, Lisa Disselkamp, LaborWise innovation architect at Deloitte Consulting LLP, said.
Joel Bines, managing director at AlixPartners, said for a few years seasonal hiring at retailers was focused on their fulfillment centers.
“This year and in years to come, we’re going to see a higher percentage of that shift back to the store as retailers are looking for seasonal labor who can help with all of the operational tasks associated with buy online pick up in store, curbside pick up and inventory replenishment,” Bines said.
Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Bernard Orr