2018 Report - Overcoming Industry-related Challenges in Wireless Retail
May 25, 2018
The wireless retail industry has reached a tipping point. With wireless penetration at nearly 100% in the U.S., commoditization threatens to further cut product margins and make an already competitive industry even more challenging. Retailers who can successfully differentiate from the market stand to capture the largest gains in this rapidly changing industry.
We’ve spoken to a number of successful wireless retailers over the last year, many of whom are also our customers. The biggest factor they identify in their success is providing a superior customer experience. “The front-line is the most important role in the company,” says Tye Stahly, Operations Manager at PCS Partners, a wireless retailer with 50 stores across Georgia, Florida, and South Carolina. “If the customer doesn’t get the perfect experience, they’re not going to come back.”
With razor-thin margins, particularly in pre-paid sectors, a differentiated customer experience is the only way to ensure that customers do not switch brands or providers. The Washington Post reports that prices are also falling across postpaid channels. Now that smartphones and tablets are no longer improving in leaps and bounds, customers are more frequently opting to spend $50 - $100 to maintain or upgrade an existing device rather than spending $1,000 on the latest technology.
Demand for wireless products has never been higher, yet the industry has never been more competitive. In this report, we’ve taken the opportunity to share some of the challenges we’ve come to understand through speaking with our wireless retail customers. We'll also share strategies that have proved effective in overcoming these challenges.
Motivating high employee performance without additional financial incentives
Pre-paid channels are particularly competitive in the current landscape, leaving little room to increase staff overhead in a bid to improve performance. This has been a consistent challenge reported by some of our customers: motivating the necessary level of performance and engagement without using financial incentives as a lever.
Our wireless retail customers report that most of their sales associates fall within the millennial age-range (22 to 37 in 2018). In a report on how millennials want to work and live, Gallup found that millennials more than any other age group are motivated and engaged by a sense of
purpose. They want work to feel meaningful, and to believe in the organizations they work for.
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Making work more meaningful sounds simple on the surface, but it’s something that many organizations struggle to achieve. Arcade was created by CEO David Cherrie based on his experiences as a millennial sales associate craving a sense of purpose at work. “I felt as though my job had no point, that I’d lost interest in selling the same old thing,” Cherrie says. Like most millennials feeling a lack of meaning at work, his performance suffered.
Things changed for Cherrie when he and his colleagues banded together to hold fun and friendly sales contests using a simple Excel spreadsheet. “We were driven not only to make sales but also to provide great customer experiences,” says Cherrie. “Experiences that left our customers feeling awesome, and kept them coming back.” This Excel spreadsheet eventually morphed into Arcade, a desktop and mobile solution that gamifies employee goals to create a stronger sense of purpose at work.
The Arcade approach has been proven to motivate performance in the wireless retail industry, with PCS Partners attributing a 5% increase in sales revenue to the use of Arcade across its stores.
Reducing turnover rates
According to Informa.com, most wireless retailers will see 86% staff turnover over a four-year period. These high turnover rates drain knowledge and accumulated expertise from the organization, while also increasing the burden to hire and retain replacements for those who’ve left. New employees generally cannot create the same level of customer experience as tenured employees, who have the context and expertise to get the best possible outcome from customer interactions.
Gallup has conducted extensive research on the factors that contribute to employee high performance. They expressed their findings using the following formula: Talent x Engagement x Tenure = High Performance. Organizations where employees tend to have short tenures face challenges in executing on this formula.
Wireless retailers able to buck the trend of high turnover will gain a competitive advantage through retaining tenured employees and expending fewer resources on hiring and training new employees.
Research has shown that high turnover is generally a symptom of low engagement, with disengaged employees the most likely to leave. It follows, then, that the most effective way to reduce turnover rates is to increase engagement. Many organizations expect that paying employees for their work will be enough to create engagement, but particularly with a millennial workforce, this isn’t the case. Many factors contribute to engagement above and beyond financial incentives, including recognition at the peer and manager level, clear goals, rewards, a sense of progress, a sense of connection, and having fun at work. This is a laundry list of relatively fuzzy and abstract words that can be difficult to address at the organizational level. Arcade was built to do this for you, providing employees with every ingredient in the recipe for engagement.
- Gamified sales goals
- Recognition at the peer and manager level
- Performance-based rewards
- Fun games based around business KPIs
- The opportunity to earn badges, levels, and experience points through high performance
- Connection with colleagues through instant chat and newsfeed updates
Every engagement-boosting feature of Arcade is based on sound research by Steven Johnson, PhD, an expert in workplace engagement in the retail sector, and also an Arcade advisor. Arcade lifts engagement, and our customers in wireless retail have reported that it has also helped reduce turnover since being implemented in their stores.
Challenges of operating at scale
Successful wireless retailers tend to rapidly expand the number of stores they operate, eventually employing hundreds of sales representatives and managers across dozens of stores. This represents a challenge when attempting to stay focused on shared goals within a dynamic and ever-changing industry. A steady stream of new technologies and products require constant upskilling of front-line associates, as well as slick coordination efforts to ensure product offerings and product knowledge are updated in-line with industry demand.
Retailers have generally met this challenge by shuttling senior staff between stores to spread product knowledge, train staff on new procedures and promotions, and ensure that stores are making progress toward business goals. The drawback of this system is that some of the best minds in the organization are spending time and energy “connecting the dots” between stores.
Our wireless retail customers have been able to reduce their reliance on store visits from senior staff. Trips to stores to train employees on new products and deals have been replaced by streamlined training modules and quizzes, delivered online via the Arcade app. Staff can acquire knowledge without requiring the physical presence of a trainer, freeing up senior staff to add value in other ways.
Through instantaneous chat and broadcasting via newsfeed posts, Arcade opens up the lines of communication between stores. Our customers report that staff use these channels to share knowledge on products, merchandising ideas, best-practices, policy changes, and value-add strategies. Innovations at one store are no longer siloed away from other stores due to communication barriers. This open exchange of knowledge helps to engage staff and overcome the challenges that come with operating many stores at scale.
Working side-by-side with the customer
As mobile POS systems and electronic payments become more common we predict that sales associates in wireless retail will increasingly work “side-by-side” with the customer, providing customer experiences and making sales directly on the sales-floor rather than from behind a register. This system, originally pioneered by Apple’s retail stores, is being adopted by forward-thinking retailers in many industries. Some of the benefits include reduced queues, increased floor-space, and a seamless experience for the customer. We’ve designed Arcade to be compatible with this future direction for wireless retail: it’s designed to work with mobile and behind the counter POS systems.
Speak with someone who understands your industry
At Arcade, we have hard-won experience working with a variety of wireless retail customers to improve efficiency at scale, reduce turnover rates, gamify sales goals, and motivate high performance from sales associates. We understand the unique challenges and opportunities presented by the wireless retail industry, and are happy to provide suggestions and advice based on the specific needs of your organization. To speak with Alison Zook, our Head of Growth, email
firstname.lastname@example.org, or call 1-540-454-3823.