The ultimate guide to employee engagement in retail (with practical tips from well-known brands!)

The retail sector hasn’t had it easy in recent years. Between the pandemic, supply shortages, and a shortage of skilled workers, retailers have been facing challenges on every front.

As a result, many retailers are asking themselves: How can we meet sales targets? How can we ensure that our shelves will continue to be reliably stocked? How can we deliver better customer service than our competitors?

The answer lies - at least to a large extent - in solutions for staff management that boost engagement, satisfaction, and productivity.

What is employee engagement and why does it benefit retailers?

Employee engagement refers to employees’ emotional connection and commitment to their roles and tasks. This includes – among other things – a willingness to work hard for one’s employer, contribute to the company's success, and provide a high level of customer service.

Research from Gallup (and many more!) shows that engaged employees are more likely to deliver great customer service, helping retail businesses achieve lasting business success in a competitive market. Other benefits include:

• Reduced absenteeism

• Reduced employee turnover

• Higher worker productivity

• Fewer accidents and incidents

• Fewer quality defects

• Lower rate of theft shrinkage

• Better customer service, improved customer experience, and higher customer loyalty

• Higher sales and profitability

With a list of benefits that long, any retailer looking to maintain a successful business would be very wise to promote high employee engagement in store teams and beyond.

Common challenges to employee engagement in the retail industry

While high employee engagement is a valuable asset in any industry, that's all the more true for retailers.

The retail industry brings unique challenges for employers and employees alike which make work more arduous for the individual and operationally challenging for the business.

Retail employee engagement statistics

The challenges facing retail employees aren't just theoretical – they're having a measurable impact. In recent Flip research, we surveyed frontline workers across various industries to dig into their employee engagement levels. Of all industries surveyed, retail employees showed the worst performance on a variety of engagement factors including:

• Happiness factors: Lowest average score for 4 factors, including flexibility and compensation.

• Well-being: 44% report good or excellent well-being, the lowest score across industries.​

• Stress and burnout: 20% say they feel burned out every day or multiple times a week.​

• Motivation: Lowest willingness to go the extra mile (55%)
compared with other industries (average 62%). ​

Add the increased pressure to perform as retailers themselves face a difficult operating environment, and you have huge threats to employee engagement – and, by extension, to your customer experience, sales, and profitability.

Understanding the needs of retail teams

To drive effective employee engagement and build a motivated workforce in the retail sector, it's essential to understand this state of play and the challenges driving it. But more importantly, we need to know what it is that retail workers need in order to be highly engaged.

Key needs for retail employees include:

• Opportunities for growth and development: Retail employees want clear paths for career advancement and access to ongoing training. When retail companies invest in professional development, employees feel empowered and more committed to their roles.

• A positive work environment: A supportive environment where employees feel respected and included is essential. Retail businesses that foster teamwork and open communication help employees feel valued and engaged.

• Fair compensation and benefits: Competitive pay and comprehensive benefits are crucial for employee satisfaction and retention. When retail employees feel they are fairly compensated, they are more likely to stay with the company and deliver great customer service.

• Work-life balance: Flexible scheduling and respect for personal time help employees manage the demands of retail jobs. Retail companies that prioritize work life balance see lower employee turnover and higher engagement.

Building a positive work environment: How to boost employee engagement in retail

The poor engagement statistics across retail workers demonstrate that for many retail teams, their needs simply aren't being met.

When analysing the reasons behind retail's last place position in our industry engagement rankings, some key themes emerged. Poor well-being, for example, was driven by understaffing, low pay, and a lack of recognition. Those with better well-being, by contrast, credited strong relationships with colleagues and excellent communication.

Identifying and addressing these needs enables retail businesses to implement employee engagement strategies that not only improve employee satisfaction and build a committed workforce but also drive the business performance needed to achieve long-term success in the retail sector.

Key strategies to improve employee engagement in retail

Improving the employee experience and building a positive work environment is multi-factorial – it takes multiple levers to build a workplace where employees feel supported, recognised, and motivated.

To give you some inspiration, here are some research-backed tactics that lay the groundwork for high job satisfaction and strong team dynamics.

Prioritise employee recognition and appreciation

Retail employees who feel recognised for their contributions and appreciated for who they are show considerably higher employee engagement markers than their disengaged peers:

Regular recognition boosts employee morale and motivates retail workers to excel. As such, making employees feel valued is a key driver of employee engagement and business success in the retail industry.

For a breakdown of how to achieve this, check out this article where we took a deep dive into employee recognition and appreciation.

Provide feedback and opportunities for career growth

When our engagement survey asked participants about career growth, just 45% of retail employees reported that there are opportunities to progress in their career at their current company. Only 37% reported that their employer gives them professional development opportunities.

Other Flip research into the generational skills gap revealed key issues with onboarding and upskilling, with one Gen Z retail worker quipping 'I feel like they just threw me to the wolves without proper training.'

When employees see opportunities for personal and professional development, their engagement and loyalty increase. McKinsey research into frontline employees' needs stressed the importance of job growth and learning opportunities in particular.

To increase employee engagement among retail workers, offer training programmes, coaching, and clear paths for career advancement.

Provide safe and comfortable working conditions

When we quizzed employees on their working conditions, we found a stark correlation with their job satisfaction. Among satisfied employees, 78% agreed their working conditions were safe and comfortable. By comparison, only 12% of dissatisfied employees agreed.

Exactly what 'safe and comfortable' looks like will vary with individual workplaces but are likely to include stringent health and safety standards, adequate breaks and comfort facilities, and clear policies around customer harassment.

Support work-life balance and employee well-being

While there are limits to the flexibility of an in-person shift job, efforts to give retail workers a better work-life balance pays dividends in terms of increasing satisfaction, improving motivation, and decreasing the risk of burnout.

Tactics here include respecting employee's off-hours and holiday days with a 'right to switch off', offering flexible scheduling and easy access to rotas, and making annual leave quick and easy to book.

Enable open communication

Poor communication harms engagement – not to mention worker efficiency, store operations, and customer satisfaction. Yet frontline workers who say their company's communication is effective are in the minority.

As such, it's little surprise that facilitating better internal communication emerged as a key engagement differentiator in our research. Employees who reported effective communication at their company were 8.2x more likely to be satisfied with their job and a whopping 12.9x more likely to report good or excellent well-being.

But one word to the wise when it comes to tactics here: Look beyond top-down channels when improving your communications strategy or selecting communications tools for retail teams.

Effective frontline internal communication strategies and solutions will enable both bottom-up employee feedback and peer-to-peer networking alongside top-down tactics.

Retail employee engagement solutions

With employee engagement such a high priority in the retail sector, many businesses consider technology solutions to facilitate their efforts.

These solutions offer retailers the opportunity to optimise store operations and deliver improvements to the employee experience reliably and at scale by...

• Facilitating peer-to-peer communication both within stores and between branches (better still: on secure, company owned channels!)

• Increasing identification with the business through reliably-delivered top-down communications

• Offering opportunities to make worker voices heard with surveys, polls, and specific feedback channels

• Embedding digital recognition and appreciation processes into company culture

• Providing easy access to existing company resources, perks, and HR tools (such as a company wiki, annual leave tool, or digital discount cards)

Retail employee engagement solutions are no replacement for an effective employee engagement strategy. But when deployed effectively, they encourage employees to participate more fully and frequently, supercharging your engagement initiatives.

What the best retailers do for employee engagement

While you might want to build your own strategy from scratch, you don't have to reinvent the wheel to improve employee engagement in retail teams.

To give you some inspiration as to which solutions work and what concrete implementation looks like, here are some examples from some of the strongest brands in the industry.

Apple, REWE, and toom have all implemented practical retail employee engagement ideas to address common challenges. From training programmes and reward systems to innovative communication solutions and work-life balance initiatives, these companies define best practices in employee engagement and offer valuable insights for other companies looking to improve their own engagement strategies and building a motivated and engaged workforce.

What does employee engagement look like at the DIY store toom?

toom, a leading DIY chain in Germany, also relies on a variety of measures to promote employee engagement.

• Flexible working models and individual support: toom supports employees through various phases of their lives. It is the first DIY store awarded the 'work and family' berufundfamilie audit certificate. This includes daycare facilities, opportunities for time off to care for family members and sabbaticals, and a tutoring programme for employees' children.

• Training and further education: the further education and training of employees is a high priority at toom. In addition, toom offers its employees participation in the cycle-to-work programme and implements health management measures. These include cancer screening, flu vaccinations, and the Fit.net programme.

• Employee app: to promote internal networking and the exchange of information, toom has also introduced the Flip employee app, which can be accessed by all 18,000 employees on mobile devices or desktops. Employees receive target group-specific information, so they're always in the know without being overloaded with unnecessary updates. In the medium term, the app should simplify and handle various HR topics such as duty scheduling or time recording.

Checklist: Three steps for better employee engagement today

While improving employee engagement is a game-changer, a well-thought-out strategy and robust implementation don't happen overnight.

That said, it's never too late or too early to get started. Three steps you can take today include:

1. Run an employee engagement pulse poll

It's hard to increase employee engagement if you're not sure what baseline you're working from. A four question employee engagement pulse survey is quick and easy to build and provides an invaluable tool for assessing employees' morale, motivation, and net promoter score. Find our suggested questions here.

2. Address internal communication

It emerged as one of the key differentiators between engaged and disengaged employees in our research for good reason. Though you can't launch a strategy or solution today, you can familiarise yourself with our guide to improving internal communication and use it to identify areas for improvement. Do your updates reliably reach all employees? Does your peer-to-peer communication infrastructure need work? Can all employees contribute feedback?

3. Show recognition and appreciation

With employees who feel valued more likely to show commitment, there's no time like the present to make a worker feel that they are appreciated and their contributions are recognised. Thank a colleague or an employee for some great work they did for you recently – in a public channel if you can. Once you've hit send, we recommend developing a formal appreciation and recognition programme to shine a light on outstanding performance and ensure employees feel appreciated. For inspiration, check out Virgin Media O2's Shout programme here.

Conclusion: Retail employee engagement calls for active management and modern solutions

In a dynamic, challenging, and increasingly digitalised retail landscape, high employee engagement is a do-or-die, providing reliable boosts to customer satisfaction, sales, and growth.

While providing a safe working environment, recognition and appreciation, and better communication are all backed by the research, strategy inspiration can also be taken from industry leaders.

Whether it's training programmes, flexible work models, or monetary performance incentives, leaders like Apple, REWE, and toom use a variety of strategies to create an engaged workforce and enhance the overall employee experience.

While delivering these strategies is not impossible without technology, employee experience platforms and solutions provide the infrastructure required to improve employee engagement at scale – especially for enterprise retailers and franchise-model businesses.