Spend Money, Sell Better
Is Walmart paying its employees better than you are paying yours?
For the sake of your business—and your staff—I hope not.
Walmart made big news in February when it announced that it would increase the entry-level wages of its store associates to $9 an hour this month and up to $10 an hour early next year. The increases were billed by CEO Doug McMillon—who actually got his start with the organization as an hourly distribution center employee in the mid-1980s—as “strategic investments in our people to reignite the sense of ownership they have in our stores.”
Before this announcement, I don’t know if anyone would have held up Walmart as the model of progress in the world of retail, particularly in how it treats its employees. Yet, today many experts are lauding the company as a visionary among its peers in this regard. Apparently its competitors feel the same way, as some of them are following suit. Most notably, Target and TJX Companies—the parent company of T.J. Maxx and Marshalls—have announced that they will also raise the base salary of their employees to $9 an hour this year, with T.J. Maxx planning to emulate Walmart’s bump to $10 an hour next year.
Independent pet specialty retailers should take a page out of the Walmart playbook too—at least when it comes to employee salaries. They should be paying their store staff at least what these workers can make at the mass retailing giant, and preferably more. In today’s highly competitive market for pet products, the development and retention of good store staff will, more often than not, be the deciding factor in whether a pet store thrives or falls by the wayside.
Let’s face it, most small, independent retailers cannot hope to compete on price with other players in the market, and as the channel continues to see sales steadily migrate to online outlets, pricing disparities will only get wider. Successful pet retailers understand that customers come into their stores for an experience, and there is no bigger element to delivering the right experience than having a knowledgeable and engaging staff.
This is certainly a point that is not lost on any of the storeowners and managers who were honored with Retailer Excellence Awards at last month’s Global Pet Expo. When I had an opportunity to chat with them after the awards ceremony, they all—without exception—gave much of the credit for their success to their employees, whether they were being celebrated for their business’ marketing, merchandising, services or overall operations. What’s more, they all stressed how they do everything possible to convey to employees how much they are valued—including providing them with a good paycheck.
Of course, there will be some retailers out there who think that they simply cannot afford to pay their employees more. However, a little research should put that misconception to rest. In fact, one study on the impact of payroll expenses on retail sales, conducted by professors at the Wharton School of the University of Pennsylvania, revealed that every $1 increase in payroll could bring a store between $4 and $28 more in monthly sales.
With results like that possible, can you afford not to pay your employees better than Walmart would?