How Retailers Can Use AI to Break the Compensation Equation

Nowhere is the customer experience more vital to the long-term success of a business than in retail. This is particularly evident as retailers work to ensure that brick-and-mortar shopping experiences are as seamless and personalized as those offered by their digital counterparts.

Nearly 80 percent of Americans are now online shoppers, according to
Pew Research Center findings. That suggests it is more important than ever to consider how the in-store experience not only remains relevant, but also plays a key role in influencing consumer buying decisions, especially when purchases are made later online.

In this evolutionary period, retailers must recognize that the employee experience is at the heart of the customer experience. Whether you are trying to draw shoppers into physical stores, increase traffic to your online site, or boost downloads for your brand’s mobile app, the redesign of the employee experience requires an approach that is just as data-driven as the CX approach.

For retailers, this means taking a critical look at how sales associates are recognized and rewarded, regardless of where a sale is made — in store or online. In other words, it is crucial to apply the same digital tools used to ensure seamlessness across omni-digital shopping experiences to tracking omni-digital sales activity, and to appropriately credit in-store employees for their work to close a customer sale, even if it was made online at a later time or date.

Following are some ways retailers can leverage next-gen tools like artificial intelligence, predictive analytics and more, to rethink (and benefit from) an employee experience that gives credit where credit is due, in order to foster loyalty and boost happiness.

1. Level the Paying Field

Elevating the employee experience has never been easier than in the age of AI. Today, retailers are able to take the guesswork out of decision making when it comes to measuring and rewarding performance, using tools like automation to ensure that compensation is fair.

However, one key challenge the retail industry faces is accurately monitoring the timeline of a sale from the brick-and-mortar experience to the final online transaction. For instance, if a man walks into a telecom store to purchase a phone, it can be tricky to track how an in-store associate influenced the man’s buying decision if the transaction is completed later online.

With the help of cloud-based, sales performance management software, however, retailers can easily track the progression of a sale and ensure that employees are accurately rewarded for their contributions.

The software also can collect key information about the store associate’s interaction with the customer. The application of SPM software not only ensures that the customer’s shopping experience is seamless, but also helps to incentivize and improve in-store sales motivation and create a better employee experiences by ensuring fair compensation.

2. Build Trust With Transparency

As with compensation compliance, AI-based software is a critical investment when it comes to ensuring that bias is eliminated from the compensation equation. What’s more, pay inequity is coming under increased legislative scrutiny as companies are called out for steep CEO-to-worker wage gaps and dated approaches to compensating across genders.

To avoid the high costs of noncompliance (i.e., violating updates to state-specific equal pay acts) and make sure that their employee experience isn’t disrupted, retailers can use sales data and predictive analytics, derived from AI-backed data, to document, forecast and reward performance based on skill level and experience. They can omit arbitrary factors like gender, race and age.

This approach not only will build trust among your staff and show them that their contributions are valued, but also address the retail industry’s high rate (and high cost) of
employee turnover.

3. Personalize Compensation Packages

Today’s workforce comprises five generations. Employees across such a wide spectrum of age ranges have varying financial priorities — from paying off student loans to coming up with a 20 percent mortgage down payment, to saving for retirement and more. Retailers can leverage AI to help them determine what kind of compensation would best suit their financial needs and long-term goals.

Another factor to consider is that compensation is not synonymous with salary. Across generations, the workforce is demanding more flexibility than ever before, which is why companies might consider offering alternative benefits that accommodate for individuals’ busy lives — whether they are a new parent and need flex time to pick their child up from daycare, or are nearing retirement and want to spend less time fighting traffic to come into the office every day.

Additionally, spot or cash bonuses can be a fun way to gamify performance and incentivize associates to boost their sales numbers or membership sign-ups, while adding some friendly competition to the mix.

The reciprocal relationship of employee satisfaction and the customer experience is one algorithm that retailers don’t need AI to measure. Investing in your people is the No. 1 KPI that retailers must prioritize now if they want to bank on long-term success during this phase of industry-wide digital disruption and beyond.

In fact, leveraging AI to ensure compensation accuracy not only will enrich the employee experience, but pay huge dividends in terms of your customer’s relationship with your brand.