How Difficult is developing the ROI on Store Training?

17th April 2018

Many retailers do not invest enough in training store personnel.  Many Learning and Development Departments find it hard to build a satisfactory return on investment case.  Fundamentally, there are three types of training that the better retailers deploy in store:

  • Product knowledge
  • Customer service and sales skills
  • Store processes, e.g. goods receiving, floor stocking, visual merchandising, point of sales processes and the like.

The first two help the sales colleagues in the store do a better job of assisting the customer and directly lead to sales success for the individual reducing staff turnover and increasing job satisfaction and length of service.  The latter one indirectly increases the store and their sales performance by making sure everything runs as efficiently as possible.  This also contributes to job satisfaction and length of service as everyone wants to be on a winning team. 

When you build the return on investment case the benefits come from a number of areas:

  • Staff turnover goes down.  This reduces advertising costs, the number of Store Operations or Human Resources department staff (or staff hours) involved in recruitment, lower on boarding costs, lower termination costs when staff leave
  • Lost productivity goes down.  Every time you hire a new person they operate at less than average productivity (lower sales per hour) until they have gone through an appropriate learning curve.  Training reduces the length of the learning curve resulting in greater sales.  The resulting lower staff turnover reduces the number of times you need to incur a lost productivity period.
  • Sales and achieved gross margin increase.  Sales increase because better trained staff sell more.  They add extra items to the transaction or they move the consumer up the price scale.  Gross margin increases because more product is sold at full price and les clearance markdown is needed.

The great thing about a retail business is that you can prove that this works by testing the value of training in a small number of stores before you have to commit to training across the whole chain.

If justifying training investment is an issue for you, Martec has developed a comprehensive store training return on investment model in Excel and it is available to retailers free of charge.  It comes complete with a detailed user guide so that you can get the best possible results.  If you would like a copy, simply enquire here and we'll get a copy to you via email.


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