EMPOWERING FIRSTLINE WORKERS TO GAIN A COMPETITIVE EDGE - Microsoft
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Briefing Paper EMPOWERING FIRSTLINE WORKERS TO GAIN A COMPETITIVE EDGE Sponsored by
SPONSOR PERSPECTIVE
Each organization takes a unique path to digital transformation. However, one
common thread across all industries is the realization of the importance of
Firstline Workers.
Think of Firstline Workers as brand ambassadors who make up more than 2
billion people around the world, employed in virtually every industry.* They are a
company’s first connection to its products and customers in retail, manufacturing,
hospitality, food service, aviation, health care, education, agriculture, and more. SHELLEY BRANSTEN
CORPORATE VICE
Given recent shifts and challenges in the retail industry, there has been a hesitancy PRESIDENT, GLOBAL
to embrace new processes and add new technologies. But this trend is shifting, and RETAIL & CONSUMER
GOODS
for good reason.
MICROSOFT
Many retailers are learning firsthand that when their people are empowered with
modern tools for a new age of retail, benefits quickly follow. For example, customers
receive more personalized service, supply chain issues decrease, and employee
engagement improves.
Retailers are now going all in to transform their culture across all aspects of the
workforce. This includes investing in tools to connect associates with management
for faster decision making, apps to view or swap shifts—and much more.
At Microsoft, our mission is to empower every person and organization on the
planet to achieve more. We aim to build tools for the modern workplace to close
technology and culture gaps that separate employees from the data, resources, and
expertise they need to do their best work.
We sponsored research by Harvard Business Review Analytic Services to assess
the status of Firstline Workers in the retail industry. Our goal is to provide business
decision makers with the latest data and best practices to consider as they continue
their digital transformation journey.
*Source: The Rise of the Deskless Workforce, by Emergence Capital, 2018EMPOWERING FIRSTLINE WORKERS
TO GAIN A COMPETITIVE EDGE
While virtually every industry feels the impact of business HIGHLIGHTS
transformation, none has weathered more upheaval or rewritten
more business plans than the retail sector. Worldwide, e-commerce
sales now surpass $3.5 trillion and will reach $5 trillion by 2021. To 67%
beat the competition, retailers are expanding online sales while OF RETAIL EXECUTIVES
“STRONGLY AGREE” THAT DIGITAL
further capitalizing on the service and experiential advantages of TRANSFORMATION OVER THE PAST
TWO YEARS HAS INCREASED THE NEED
their brick-and-mortar locations. At the same time, they’re turning TO EQUIP FIRSTLINE WORKERS WITH
ADDITIONAL DIGITAL TOOLS.
to a range of modern digital tools, including platforms for improving
internal communication and collaboration, to enhance customer
experience at physical stores and clearly distinguish themselves from
e-commerce competitors.
72%
OF RETAIL EXECUTIVES SAY HAVING
A DIGITALLY EMPOWERED FIRSTLINE
Technological change is spurring retailers to take a fresh look at one of their
WORKFORCE WILL BECOME A
COMPETITIVE DIFFERENTIATOR IN THE
most essential but often underutilized and overlooked resources—firstline INDUSTRY IN THE FUTURE.
workforces. In a new survey by Harvard Business Review Analytic Services, an
overwhelming majority (67%) of global retail executives “strongly agree” that
digital transformation over the past two years has increased the need to equip
firstline workers with additional digital tools. 91%
OF RETAIL EXECUTIVES SAY THAT
Firstline workers play a highly visible and critical role for retailer companies. THE FIRSTLINE SEGMENT OF THE
WORKFORCE IS ESSENTIAL FOR
They’re the human faces in stores who guide consumers to desired products, ACHIEVING HIGH LEVELS OF CUSTOMER
provide custom services to frequent customers, close the loop in orders made SATISFACTION.
online for in-store pickup, and engage with clients in many other ways. In short,
customer experience hinges on the talent, skills, and knowledge of firstline—often
also called frontline—workforces. They must be equipped to meet rising customer
expectations, deliver high-quality engagements, and continue seamless shopping
experiences from online to in the store.
The large, London-based retailer Marks & Spencer understands the connection
between an empowered firstline workforce and customer satisfaction. The retailer
has been investing in mobile applications and devices for its 50,000 in-store
customer assistants for years, and it sees benefits in improved customer service.
“In the past, if a customer asked if the store had a dress in a particular size, a store
colleague would have had to search the back room and keep the customer waiting
in the store,” says Sarah Cokayne, head of retail operations for the retail chain.
“Now frontline colleagues can use mobile applications to see what’s in stock,
Briefing Paper | Empowering Firstline Workers to Gain a Competitive Edge Harvard Business Review Analytic Services 1where an item can be found, or, if it’s reveals why firstline workers can Retail companies reap additional
out of stock, to determine if our store have the biggest impact. Retail benefits when they digitally empower
down the road has it. If necessary, executives identify a handful of firstline workers. For example, 43%
our store colleagues can order the drivers of creating a more digitally of the surveyed retail executives
product, and it will be ready for pickup connected and empowered customer- named greater market intelligence
the next day.” facing workforce. Half of the survey and customer understanding as
respondents named enhanced a top business driver of digital
The combination of skilled firstline
customer engagement and satisfaction empowerment—compared to just 26%
workers and the right digital tools
as the top potential benefit. Responses of respondents across all industries.
will become increasingly vital for
to a follow-on question underscore
retail companies in the years to come. Retailers also highly ranked increased
the importance of firstline workers: a
Nearly three-quarters (72%) of the productivity and efficiency among the
commanding majority (91%) of retail
retail executives surveyed say having a top empowerment benefits. Firstline
executives say that segment of the
digitally empowered firstline workforce workers and technology are combining
workforce is essential for achieving
will become a competitive differentiator for productivity improvements at
high levels of customer satisfaction.
in the industry within that time frame. Marks & Spencer. “Store colleagues
“The investments in technology that use mobile apps for recording stock
But digital empowerment requires
we’re seeing for frontline employees levels,” says Scott Townend, digital
more than simply implementing
not only bring about increases in platforms delivery lead. “In the past,
new technology. Retail organizations
customer satisfaction, they also people had to manually count stock—
must also address related cultural and
translate into increased customer physically go to locations and write
communication issues to fully utilize
loyalty and same-store sales,” says Paul down the quantity for each item.
firstline workforces and reap business
Tiedt, senior vice president for research Now, colleagues just wave over the
benefits, including improved customer
at Service Management Group, which area with the RFID [radio frequency
service, increased productivity, and
specializes in customer- and employee- identification] scanner on their mobile
lower employee turnover.
experience management. “In addition, device, and the quantities are uploaded
we see improvements in speed of to the central inventory system.
The Key to service—orders getting to customers Not only are inventory counts more
Customer Engagement faster—and lower employee turnover, accurate, it saves time so colleagues
A closer look at the components all of which are key outcome measures can now devote more attention to
that contribute to business success for running an efficient retail business.” customer service.”
Overcoming Roadblocks to
FIGURE 1
Engage the First Line
While the potential business benefits
STUBBORN PROBLEMS HAMPER FIRSTLINE EFFORTS of digital empowerment are clear,
Retailers must overcome financial and change-management challenges many retailers are struggling to achieve
the rewards. Sixty-nine percent of the
What are the greatest barriers to digitally enabling firstline workers at your organization? retail executives surveyed say the cost
• RETAIL EXECUTIVES
• ALL INDUSTRIES of rolling out technology to a broader
employee base is the biggest barrier
Cost of rolling out digital technologies to broader employee base to digitally enabling firstline workers.
69% FIGURE 1 This is far higher than the 43%
43% of respondents in the overall survey
Lack of effective change management and adoption processes who saw technology costs as such a
47% high hurdle. One explanation is that
39% retailers have traditionally focused
Traditional hierarchy investments on physical upgrades and
30% must now play catch-up for in-store
32% and online systems.
Lack of skills Retail executives are encountering
29% sticker shock when it comes to rolling
34%
out new technology, but that’s not
Lack of commitment at the top stopping them from making new
20% investments. The business returns for
22% firstline digital empowerment and the
promise of new market opportunities
SOURCE: HARVARD BUSINESS REVIEW ANALYTIC SERVICES SURVEY, OCTOBER 2019 appear to be more than enough to
2 Harvard Business Review Analytic Services Briefing Paper | Empowering Firstline Workers to Gain a Competitive Edge“The investments in technology that we’re seeing for frontline employees not
only bring about increases in customer satisfaction, they also translate into
increased customer loyalty and same-store sales,” says Paul Tiedt, senior vice
president for research at Service Management Group.
convince organizations to open their FIGURE 2
wallets. For example, 78% of retailers
surveyed say their investments in
RETAILERS UNDERSTAND HOW TO EMPOWER
digital tools for firstline workers FIRSTLINE WORKERS
are higher now than two years ago. Apps and analytics gain importance
What’s more, they have clear ideas
What technology investments are organizations focusing on over the next two years?
what technologies they’ll need to
invest in for firstline workers over the
next 24 months.
• RETAIL
• OVERALL
Mobile point-of-sale terminals
Highest on retail wish lists are mobile 65%
point-of-sale terminals, which 18%
help sales associates stay engaged Web apps
with customers and complete sales 62%
anywhere on showroom floors. Nearly 47%
two-thirds (65%) of retail executives Advanced analytics
say their companies will be investing
54%
in these types of devices. FIGURE 2 50%
But retail respondents are also looking
Learning and performance management
beyond hardware with plans to
48%
upgrade a range of applications for 44%
firstline workers.
Smartphones
A large number of retail organizations 41%
(62%) will acquire new web 33%
applications, such as programs Unified communication/collaboration tools
to help firstline workers more 40%
easily access inventory totals, shift 39%
schedules, HR systems, and other Online service manuals and/or maintenance tutorials
company resources. More than half 37%
of the respondents (54%) will acquire 32%
programs to help them mine data with Tablets
advanced analytics software, which 36%
can help sales associates recommend 32%
additional products for individual
Artificial intelligence
consumers based on, for example,
19%
their past purchases. The key for retail 33%
organizations is making a full range
of data and analytics capabilities
available to firstline workforces while SOURCE: HARVARD BUSINESS REVIEW ANALYTIC SERVICES SURVEY, OCTOBER 2019
they’re on showroom floors engaging
with clients.
“At Marks & Spencer, we’re actively
investigating how to make information
more accessible to people via their
mobile devices,” says Townend. “This
includes running pilots that look
at AI [artificial intelligence] to see
Briefing Paper | Empowering Firstline Workers to Gain a Competitive Edge Harvard Business Review Analytic Services 3“We are breaking down barriers so that our colleagues in stores can
be heard, and we are able to access a rich pool of ideas that can
support the transformation of our business,” says Sarah Cokayne,
head of retail operations for Marks & Spencer.
how it may help people get answers other managers to store colleagues, with e-commerce sales platforms
more quickly.” which sometimes delayed or distorted and with digitally enhanced physical
the messaging. “Now people with stores. But while technology is
many different roles can communicate at the heart of the changes, retail
Change Management Hinges on directly with store colleagues,” executives know another component
Communication explains Cokayne. “Finance colleagues is just as important: the power of the
Investing in technology is not the
can share the previous week’s sales firstline workforce.
only challenge for global retailers
results, while business managers can
that want to digitally empower A growing number of retail executives
outline priorities for what products
their firstline workers. Forty-three are learning how to tap into that power.
to promote in the following week
percent of retail organizations They see a direct link between digitally
and what changes to store layouts
named the lack of effective change empowered firstline workers and
should be made based on upcoming
management and adoption processes important business benefits, including
sale items.”
as a significant challenge. Relatedly, closer customer engagement and
41% of retail executives say their The central communication platform higher levels of customer satisfaction.
organization doesn’t have an also enables a two-way flow of Firstline workers can also bubble up
effective communication and change information that benefits the retailer ideas to managers about new products
management program to support in two ways. First, it lets the entire and services to gain an edge over
the rise of digitally empowered workforce coordinate its efforts to competitors. In short, with the right
firstline workers. achieve the company’s latest business resources, the firstline workforce can
goals. Second, firstline workers can make even stronger contributions to
Marks & Spencer has already targeted
share product insights and customer their organizations.
communication improvements.
feedback with senior managers
Townend says the company is in “Technology has enabled frontline
to inform them about emerging
the process of interconnecting all colleagues to do their jobs more
opportunities and trends.
the company’s stores with a cloud- effectively,” Cokayne says. “Now
based collaboration application that Leveling communication means the colleagues have everything they need
integrates a range of communication British retailer has found an answer to in their hands to enhance customer
tools, including chat, audio- and overcoming traditional hierarchies— service and engage more closely with
videoconferencing, and shared the third-biggest barrier listed in Figure the company.”
workspaces. “It enables our store 1. “In the past, store colleagues had to
colleagues to contact someone give their ideas to a section manager,
in the support center directly or who would then pass them to the CEO.
communicate with peers in other With all those hurdles to overcome,
stores to find answers to questions or many people felt constrained when
learn about products,” Townend says. trying to share suggestions,” Cokayne
“[The platform] will replace many says. “We’re breaking down barriers
different tools that stores had been so our colleagues in stores can be
using and which lead to inconsistent heard, and we are able to access a rich
communication. All business pool of ideas that can support the
communications come through a single transformation of our business.”
app, and the feedback we’re receiving
from stores that are using the program
shows that colleagues feel more
The Power of Firstline People
Retail has been rocked with change in
engaged with the business.”
recent years. Traditional organizations
Traditional communications from are continuing to evolve their business
senior executives had to flow through models to successfully compete
4 Harvard Business Review Analytic Services Briefing Paper | Empowering Firstline Workers to Gain a Competitive Edgehbr.org/hbr-analytic-services
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