How to Motivate Retail Employees: 9 Strategies to Keep Their Shelves & Spirits High

Retail employees are the lifeblood of any successful store. They are often customers' first point of contact, and their performance can make or break the shopping experience. Keeping them motivated is paramount to the success of your business. A study by World Economic Forum has shown that motivated employees are likely to be 31% more productive and have 37% higher sales. 

As front-line workers represent the brand and directly impact customer satisfaction and sales figures, motivating them takes precedence, opines a study by University of Oxford. Motivated retail employees are likelier to go the extra mile, provide exceptional customer service, and stay committed to their roles.

The retail industry has one of the highest employee turnover rates compared to other sectors. In the U.S., turnover rates often exceed 60%, with some estimates suggesting it's closer to 100% for part-time retail workers.

In this blog, we'll delve into effective strategies and unique approaches to unlock the untapped potential of your retail workforce, ensuring they remain motivated, engaged, and ready to contribute to your store's prosperity.

Whether you're a retail manager or an employee looking for ways to boost morale, you'll find valuable insights to create a vibrant and motivated retail team.

Let's dive in!

10 Strategies for motivating retail employees

Motivating retail employees is crucial for providing excellent customer service, improving sales, and fostering a positive work environment. Here are some tried-and-true strategies to motivate retail employees and ensure they remain engaged and productive.

1. Gamified incentives

Turn everyday tasks into a game or competition. Gamification leverages the natural desire for competition, achievement, and recognition. By setting up sales competitions, leaderboards, or rewards programs based on performance, employers can engage and motivate retail employees in a fun and interactive way.

Starbucks implemented the “Starbucks Rewards” program not only for customers but also for employees. Baristas can earn "stars" for up-selling products, displaying exemplary customer service, or completing training modules.

Collecting stars allows employees to achieve certain levels, leading to rewards and recognition, which can be both intrinsic and tangible.

2. Continuous learning and development opportunities

Offer consistent opportunities for employees to learn, grow, and advance within the company. This can be through training sessions, workshops, or even courses that help them refine their skills or learn new ones.

This benefits the company through better-skilled workers and boosts employees' morale and motivation as they feel valued and see a clear path for growth within the organization.

Apple is well-known for its extensive employee training programs. New retail employees, or “Specialists”, start with a multi-day training where they learn about the company, its products, and the importance of customer service.

Apple doesn't just stop at product or sales training; they focus on enriching their employees' communication and problem-solving skills, ensuring they can handle various customer scenarios. This continuous learning approach helps employees feel valued and prepared, leading to increased motivation and loyalty to the brand.

3. Employee discount and benefits programs

Retailers can make their employees feel special and valued by offering employee discounts on products or exclusive benefit programs. This motivates employees by giving them a personal stake in the products they sell and fostering a deeper connection and loyalty to the brand.

The Gap and its subsidiaries, like Banana Republic and Old Navy, offer employees significant discounts on store merchandise. This kind of benefit incentivizes employees and makes them brand ambassadors, as they often wear or use the products they sell, building a more authentic connection with customers.

4. Open feedback and inclusive decision-making

Employees often have firsthand knowledge of ground realities and can provide valuable insights into operations, customer preferences, and potential improvements.

By creating an environment where employees feel their feedback is valued and can influence decisions, retailers can boost motivation and cultivate a sense of ownership among staff.

Nordstrom, a renowned name in the retail sector, has always upheld a culture of open communication. They encourage employees to share feedback and ideas regardless of their rank or role.

This has led to various operational improvements and has fostered a culture where employees feel they have a real stake in the company's success.

5. Peer-to-peer recognition programs

Beyond top-down recognition, enabling colleagues to recognize and celebrate each other can foster a sense of camaraderie and motivation. Employees can nominate their peers for "Employee of the Week/Month" or use a point system where peers can give points to each other for teamwork, customer service excellence, or innovative ideas. These points can later be redeemed for rewards.

Whole Foods has successfully implemented a peer review process where teams evaluate if a new employee should move beyond their probationary period. This peer-driven approach ensures everyone has a say in building their team and naturally motivates employees to work collaboratively and supportively.

6. Creative break spaces

Revamping the traditional break room into a more relaxing and engaging space can be a unique motivator. Consider introducing elements like comfortable seating, plants, board games, or even a small library.

The idea is to offer employees a genuine mental break, rejuvenating them for the rest of their shift. This shows care for their well-being and can also boost morale and productivity.

LUSH believes in the power of a comfortable and engaging workspace. Many of their retail locations have revamped traditional break rooms into spaces that reflect the brand’s fun and ethical identity.

With vibrant colors, comfortable seating, and even some "fun and games," employees can disconnect, refresh, and return to work with renewed energy.

7. Cross-training opportunities

Allow employees to learn roles beyond their designated job description. By letting a cashier experience the stock room or a sales associate delve into visual merchandising, you expand their skill set and break the monotony of their everyday role.

This variety can reinvigorate their passion for retail, give them a broader understanding of the business, and provide potential pathways for advancement.

IKEA often rotates its employees through different departments. This approach ensures that staff members understand the company's operations comprehensively.

Employees appreciate this as it adds variety to their roles and gives them a broader skill set, making their job roles more dynamic and fulfilling.

8. Personal growth and wellness programs

Recognizing that an employee's well-being directly affects their performance and motivation, offer programs centered on personal growth and wellness. This could range from workshops on stress management, yoga classes after shifts, or even providing resources on financial planning.

By showing concern for the holistic well-being of employees, retailers can foster deeper loyalty and motivation.

Patagonia, an outdoor clothing retailer, offers its employees unique benefits that underscore its commitment to well-being and personal growth. Among these are yoga classes, an on-site organic cafe, and even opportunities to take paid time off to volunteer.

Their focus on ensuring the well-being of their employees has created a motivated workforce deeply aligned with the company's values.

9. Engage in "Mystery Shopper" Feedback Rewards

Implement a "Mystery Shopper" program where employees are unaware of when they might be serving a secret evaluator. Once evaluations are done, instead of only focusing on areas of improvement, offer rewards to employees or teams that excel in these evaluations.

Expecting positive recognition from an unknown evaluation can motivate employees to perform at their best consistently.

The British international sandwich shop chain, Pret A Manger, uses mystery shoppers to visit each store weekly. If a store receives an outstanding evaluation, every employee in that store gets a bonus. This approach encourages consistent excellent service and fosters a team spirit, as everyone benefits from the collective effort.

10. Implement "Passion Projects"

Allow employees a few hours each month to work on a retail-related "passion project" of their choice. This could be designing a new window display, organizing a community outreach event, or even creating a new in-store marketing campaign.

Such projects allow employees to channel their creativity, feel a sense of ownership, and directly contribute to the store's ambiance or community reputation.

While not a traditional retail company, Google's famous "20% time" policy allowed employees to spend one day a week working on a project unrelated to their main job.

This policy created of some of its best products, like Gmail. Retailers can adopt a similar approach on a smaller scale, letting employees work on projects they're passionate about that can benefit the store.

These unique strategies focus on the often overlooked, softer aspects of motivation, emphasizing mutual respect among peers and genuine breaks to rejuvenate.

By investing in these, retailers can achieve a more holistic employee motivation model, increasing job satisfaction and improved performance.

Clothing retail H&M improves rewarding efficiencies with Xoxoday Plum

H&M, a prominent global fashion company boasting over 171,000 employees and operating in more than 73 locations, was keen on optimizing its employee reward system. Seeking a more efficient and universally accepted mechanism, the company evaluated the services of Xoxoday.

Challenges

• The existing reward system only dispensed cash rewards, which were clubbed with the employee's salary. This complicated the logistics and meant that a flat tax rate was applied to the reward, decreasing its value.
• On-site employees, who formed a considerable chunk of the workforce, faced devaluation of their rewards due to currency conversion rates and additional taxes.

Solution with Xoxoday Plum

• Xoxoday Plum introduced a point-based reward system. The system was simple and efficiently reduced the overheads related to reward allocation, tax processing, and salary processing.
• With Xoxoday's system, the company could offer multiple types of rewards, such as performance-based awards, tenure awards, and team awards.
• The platform provided diverse redemption options like experiences, gift vouchers, and perks, catering to the employees' varied interests.

Outcomes

• Employees now had an array of reward choices, leading to a spike in participation in reward programs.
• Xoxoday's system offered tax savings, ensuring employees received the full value of their rewards.
• The nomination and awarding process became streamlined, resulting in 52% of all employees getting nominated and 10% winning awards in the last fiscal year.
• On-site employees enjoyed tailored rewards suited to their geography and interests, significantly boosting their participation.
• Feedback collected through "litmus score" tests showed that most employees favored the Xoxoday Plum program, marking a clear improvement in the company's rewarding efficiency.

Conclusion

Motivating retail employees is a continuous process that requires a combination of strategies, including clear communication, recognition, training, a positive work environment, and competitive compensation.

By investing in your employees' well-being and growth, you can create a motivated and engaged retail team that contributes to the success of your business. Remember that motivated employees are more likely to provide excellent customer service and drive sales, ultimately benefiting your bottom line.