Online Sales Materially Affecting Retail Salespeople

By David Radd

Posted January 28, 2013

Online shopping is clearly winning over customers with prices and convenience. It's even affected large retailers like Macy's, which saw saw same-store sales increase by 2.5 percent by contrast to online which were up more than 50 percent.

There is a net loss for people like Nelson Springer, a shoe salesman at Macy's who works on commission. While he made $20,000 in sales each week during the 2011 holiday season, it took him an entire month to hit the $20,000 mark dropping his net sales $60,000 from the year before and decreasing his paycheck $5,000.

"Shoppers are a lot more conscientious," he said. "People know what they want, and they want it for as cheap as possible, and they think the place to get that is online."

Springer noted that many only want to find the right size and fit before ordering online. "I had a guy come in six months ago. I spent a half an hour with him, trying on four pairs of shoes before getting up and saying, 'Thanks, now I know what to get when I buy them online,'" he said.

Some retail experts say stores aren't sure how to respond. "Companies can't figure out what to do," said Robert Passikoff, founder and president of brand research consultancy Brand Keys.

Craig Johnson, president of independent consulting firm Customer Growth Partners, notes that online retailers like Zappos offering free shipping both ways makes online even more appealing. "They take away any downside of ordering something that's not right," he said.

A result of these trends has some companies cutting salespeople's commissions. "We've seen workers see their commission drop from 4 percent to 1 percent," said Yana Walton, communications director at Retail Action Project, an advocacy group for retail workers. "That's the way this is going, if shoppers continue to [browse in stores but shop online]."

Macy's has tried compensating by allowing salespeople complete online transactions for shoppers in stores so that the customer gets the online price and the salesperson gets the commission. This does not make up for the slower sales, however, sending workers like Springer picking up extra shifts.

Springer is in a better position than most: as a member of Local 1-S, a branch of the Retail, Wholesale and Department Store Union, his hours and compensation are locked in under contract. "I know I'm one of the lucky ones, but everyone is going to have to adapt to the changes if we want to compete," he said.



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