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Poor skills may prick retail balloon

Poor skills may prick retail balloon
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First Published: Tue, Apr 24 2007. 10 08 PM IST

Updated: Tue, Apr 24 2007. 10 08 PM IST
New Delhi: All right, so organized retail is the next big thing about to happen in India, with both domestic and international players drawing up furious plans to grab a piece of what global consulting firm AT Kearney says will be a $200 billion (Rs8,40,000 crore) pie by 2016.
And that means a big boom in jobs as well. The sector currently employs around 250,000 people. Within just a year, this number is likely to touch the 400,000-mark. Organized retail, in fact, is all set to generate more jobs than any other sector open to private enterprise over the next two years.
But the trouble, according to a report by MeritTrac, a Bangalore-based skills assessment company, is the quality of human assets at the grassroot level.
The study says most of the 1,097 customers surveyed in Bangalore, Mumbai, Chennai and Delhi felt sales staff at large retail stores “woefully lack” the ability to creatively explain and demonstrate a product/service, a skill they accorded top priority.
The survey focuses on four key attributes — the ability to communicate, the ability to comprehend, courtesy and professional ability, and clarity and creativity in product or service presentation— and attempts to relate them to the ability to sell and attract customers back to stores.
The objective of the study was to gauge customers’ evaluation of sales staff skills at stores of leading retail chains, and to relate this to their purchase behaviour.
The respondents ranked good oral communication skills ranks second, listening and comprehending skills, third, and mannerisms (courtesy and professional behaviour), fourth, in terms of their effect on sales.
The skill sets available at stores were also benchmarked against customer expectations. The findings were glaring in terms of the dearth of the right attributes required to create value for the business.
The survey found that staff skills aren’t in line with customer expectations. In fact, they are aligned in the opposite order as that dictated by customers. Which means that the most critical sales attribute – the ability to present products and services creatively – is least available in stores.
Retail purchase behaviour is shaped by frontline staff skills: The ability of sales staff to generate sales and repeat visits — in short, to create customer value and loyalty — is strongly dictated by the skill levels they possess.
Even a single grade shortfall in skill rankings could mean substantial loss of potential sales opportunities and repeat business.
There is an acute need for skills that create immediate value for the business: Sales staff is better at mannerisms and listening skills than they are at selling.
The MeritTrac study concluded that retail firms are geared more towards bringing back customers without even being able to sell to them.
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First Published: Tue, Apr 24 2007. 10 08 PM IST