The glamour and prestige of luxury brands is not strong enough to insulate them from the employee attrition plaguing the retail sector in the post-pandemic period.
That means luxury retailers must not only experiment with remote working and flexible hours, but also burnish their “employer brands,” compensation and benefits so sales associates embrace their mission and culture.
So say Delphine Vitry and Jean Revis, cofounders of Paris-based luxury consultancy MAD, which estimates that staff retention, staff engagement and client experience topics comprise up to 30 percent of its consulting practice today, up from 5 to 10 percent before the COVID-19 pandemic upended employee values and expectations.
MAD estimates minimum attrition levels of 15 to 20 percent for sales associates in luxury stores, reaching a maximum of 40 percent in some markets.
According to Vitry, some luxury flagships in Paris operate with 20 percent less than a full staff complement, underscoring how sales associate jobs are decreasing in desirability and becoming more complex and demanding in an omnichannel, 24/7 world.
In the past, attrition was a problem for HR departments, whereas today it’s become a hot topic in the C-suite of many luxury brands, Revis said.
And since future growth for luxury goods players depends on either boutique openings or on increased productivity, high-caliber sales associates are key.
Citing data from Workiam, Vitry noted that 63 percent of retail companies are operating with a frontline employee deficit. Studies also suggest the majority of retail employees in China suffer from anxiety, some chronically.
“The U.S. and Europe are struggling with staffing,” agreed Christophe Cais, chief executive officer of Dubai-based consulting firm CXG Marketing, noting that “Asia is maybe a little less impacted.”
French luxury giant LVMH Moët Hennessy Louis Vuitton is forecasting that it will need to recruit 22,000 new workers by the end of 2025 — about two-thirds of those positions for sales associates and hotel employees.
According to Cais, the proactive steps brands are taking include training and apprenticeship programs for sales advisers all the way up to full-fledged retail academies, at Richemont in Asia and America, and Chalhoub Group in Dubai.
“Compensation in retail typically is not very high, and people are always looking for better opportunities,” Cais explained in an interview. “Many people don’t see that as a long-term career. Brands have not always looked at this, and invested in people the way they should have.”
Cais said many commission schemes and other key performance indicators for sales associations are transactional, whereas the sharpest brands are cultivating relationships, pampering and delighting customers with a view to their lifetime value. “So the short-term transaction is not really what brands need in order to thrive moving forward,” he said. “Some brands are looking at it very, very seriously.
“When you talk to Gen Z, they are really looking for not only the work-life balance, but also personal development, and what are brands providing when it comes to training and developing people on a retail job.”
Cais also noted the lion’s share of training of sales associates is dedicated to product knowledge.
“Our view is that brands should really be focusing their efforts on training people on soft skills, and to help people do what digital assets cannot do for them, which is creating relationships and making people feel at home and creating this feeling of well-being,” Cais said.
Giving more flexibility is also key. Cais suggested retailers could leverage AI to determine optimal staffing levels and recognize that “people don’t need to be on the shop floor as much as before” and can leverage clienteling tools, like Zegna X.
In Cais’ view, “a good employee experience leads to a good customer experience.”
MAD’s Vitry and Revis are adamant that luxury brands are well positioned to overcome the challenge of employee attrition, noting that fashion houses broadly have a reputation for being inclusive of minorities and women, for dealing in durable products that are inherently more sustainable, and for being connected to cultural movements and in tune with shifting values.
Conglomerates like Richemont, Kering and LVMH, home to more than 75 brands across various sectors, also offer sales associates a richer selection of possible career paths and likely more training and education opportunities.
Vitry draws a direct parallel between the customer journey and the employee path, with the online desirability being the first deciding factor if a customer will “push on the door” of a boutique — or a worker will knock on the HR office. Likewise, the first boutique experience is as crucial for the client as the onboarding process is for the employee.
She said luxury retailers are taking a test-and-learn approach, realizing that “clienteling” work — distance relations between sales associates and clients — can represent 20 percent of the workload, and needn’t be executed on the shop floor. “They’re asking, ‘How could we get organized so that maybe you could do this job at home?’”
Likewise, some brands are experimenting with apps that allow sales associates to trade on-floor shifts directly with colleagues, instead of going through laborious HR-department permissions.
Revis cited some innovative tactics at non-luxury retailers in China, where sales associate jobs are generally not highly regarded.
Lululemon took a “lifestyle” approach, inviting wellness and yoga enthusiasts to join as sales associates, offering them vaccinations, fitness allowances, reasonable hours and other rewards they appreciate. In Vitry’s estimation, Lululemon’s “employer brand” may be more well known than the activewear retailer.
Then there is Starbucks, which is facing substantial efforts by staff in some its units to unionize. Recognizing that long commutes for most of its employees diminishes the work-life balance, the coffee chain gives workers first dibs on positions should a branch open nearer his or her home, Revis pointed out.
