Why Sales Training and Enablement Fail: They Don’t Work Together
Disposable No More: Francesca Ricci on the Near Future of Retail
Francesca Ricci has over 15 years of experience in the fashion retail industry, most recently as Director of Merchandising, North America, for COS – a major fashion company that is part of the H&M group. Across her career she’s confronted issues that are core to direct-to-consumer success, such as how to increase retail sales and how to manage the supply chain for stock optimization.
In our interview, Francesca discussed the present and future of fashion retail merchandising and planning, in particular the questions of brand identity, brand image, and importance of brand advocacy.
To her mind, in such a crowded market, with more informed customers who are increasingly likely to spend on experiences than on goods, retailers – and brands – must find a way of speaking to the consumer and commanding their attention and loyalty. This is a powerful strategy answering the question of how to increase retail sales in the omnichannel age. Indeed, in her role of Director of Merchandising for COS, Francesca managed to increase retail sales 20% YOY.
This connects to some of the research we at Rallyware have already done on brand identity and frontline engagement, which showed that developing a more engaged frontline is critical in creating a positive brand image, which in turn drives repeat sales and consumer loyalty.
Francesca’s Most Recent Role
Francesca’s main areas of expertise in retail has been in operations and financing. “I have been working mainly in the direct-to-consumer business,” she says, with 11 years at COS. “I’ve been able to dive into what it means to establish a business operation in North America from scratch.”
When she joined COS, her expertise was in driving operations on the store side. Now, Francesca specializes as well in making online operations more efficient, “moving the product to the customer in a way that fulfills their needs,” and also where to invest, how to grow the business at a sustainable pace in terms of production and customer acquisition. Working as a merchandiser, she has planned the assortments and inventories of products, developed promotional plans, and drove marginal profits. She worked to ensure the right products were being displayed in the right way, that stocking in-store was optimal, and that the product followed the right path from production to consumer.
Pandemic and Post-Pandemic Shopping Trends: Francesca’s Analysis
During the pandemic, Francesca says, “in the fashion industry there was a huge shift to buying leisurewear attire. Everything shifted to being at home so there was less of a focus on workwear and formal attire. Leisurewear is a category with much more competition, I would say. There are many more companies offering those types of products and it’s a more volume-driven business; these garments are cheaper and faster to produce.” This “more volume-driven business” shifted online, and once there is such a major industry-wide shift in production and distribution, it’s hard to return to the status quo ante.
Francesca underlines the fact that the pandemic was not just a blip, but has changed the dynamics of retail production and consumer behavior for the foreseeable future. “Demand went all into specific categories due to most buyers’ lifestyles suddenly being the same. Then once the pandemic waned, people started thinking more about what they were wearing. There was the return to the office, and this brought a larger assortment of products back into the mix. Yet there are still some who will work from home forever now. The question for retailers and brands is, how are you meeting that customer who wants to get back to their original, pre-pandemic lifestyle, as well as the customer who’s staying at home? How are you providing that diversity of products? So it’s been a fast shift to adapt to customers, to keep up with demand.”
How to Adapt to Changing Consumer Behavior and Increase Retail Sales Without Missing a Step
“You have to see what the customer is leaning toward, what they are searching for, what they are buying. You can’t entirely plan that – in some sense, you have to be in touch with the trends in real-time,” Francesca says. Today, it’s less clear than it has been for a long time what exactly customers want. This is due to multiple causes, from a highly stratified economy that is at once creating jobs and generating layoffs; the continued tensions between return-to-work and work-from-home; and broader problems such as what brick-and-mortar stores stand for in a world increasingly digitalized. Of course, retail sales enablement technology is becoming more critical in creating a dynamic and personalized customer experience, but sales and operations leaders have to have the right strategy to ensure it is implemented successfully.
“You can’t only use customer demand data to analyze trends. You need customer behavior analysis too. You need insight, you need creative thinking. You also need to focus on those areas of business where customers see the most value in your products. In other words, products you as a business feel most confident about and that are unique to your brand – pushing them further so you don’t get stuck with that inventory after the season is done. These are products you can sell at full price, within the season they were manufactured for. You have to define what the right products are for which regions and which stores at the right time.”
Above all, Francesca emphasized the importance in the post-pandemic age of defining brand identity – “what you stand for.” “This is the most important topic for me,” she says. “It’s not only about the product but what you represent to the consumer. When they spend money with you, what are they signing up for? Are they buying something high-quality? Are they supporting an organization that believes in their values and is doing good (as your ideal consumer defines it)? There’s a lot of competition, so the consumer has a lot of choice. You have to be able to make a case for yourself.”
Discounting and Sustainability
As we learned in our interview with Anthony Sloan of Swarovski, post-pandemic omnichannel shopping has been driven by discounting and promotions. This is how many retailers and brands have won share of business. However, Francesca makes the point that this approach has real limitations.
“As someone in the fashion retail industry, this is very important to me. Discounts were big during the pandemic and afterward. The physical side of the store tanked as stores closed. A lot of companies had to go into discount mode to get rid of the inventory they built up over the pandemic. I am, personally, a very strong believer in the idea that the fashion industry has a large responsibility toward sustainability and how many resources we use to produce, ship, and distribute. How can we manage resources so we don’t produce as much extra product? I don’t believe in the strategy of producing products for discount. Long-term there will need to be a need to think about: what is the product I can produce to sell at full price? What is the product the customer is willing to spend their money for? As opposed to producing more products that will go into the landfill, that will end up being wasted with no end-use.
“That doesn’t always reflect in short-term profit. It must be considered as a long-term plan and must be true to the brand’s identity. For instance, if you’re talking about SHEIN or a company like that, this simply isn’t part of their brand identity. But if you’re a company like Patagonia, you would expect it to be.”
Disposable Income, Disposability, and In-Store Shopping
There is also the question of disposable income. Because many consumers do not have the disposable income they did at the start of the pandemic – experts have said that disposable income for the average consumer declined steadily throughout 2023 – the value proposition of cheap, fast retailers like SHEIN and Amazon becomes more convincing. On these players, Francesca comments, “Yes, these companies do have a huge customer base. It’s an offer you cannot find otherwise but I think that the awareness of the customer will also increase and so I don’t see that as a business that will grow indefinitely. I do believe customers will pay more attention to this, again, especially if you’re talking about your highly educated and high-earning customer. I am for less is more – I think that’s a persuasive brand identity – but this is a very different business model than what these companies have.”
The continued growth of online shopping also contributes to the success of “fast fashion” retailers. When it’s as easy as the click of a button to order goods – and cheap, to boot – product quality doesn’t always win out. “Convenience is an issue,” Francesca observes. “There’s a lot of work that needs to be done for everyone in the industry – how to create that convenience for the customer. Amazon delivers in two days, basically for free. How do you compete? That is what you are compared to. If you cannot achieve that you are at a disadvantage, because people don’t have a lot of time to wait for items. Folks might not have 3-5 days to wait for their parcel; or they might not want to pay for expedited shipping, which is often less sustainable anyway. Other companies need to work on how to offer the product in a convenient way, both in the store and online. It’s distribution, too, being able to manage the product across channels and deliver it in different ways – that’s going to be very important for any company that’s not a mega-retailer like SHEIN or Amazon.
“Yes, the pandemic gave online shopping a tremendous boost. But I’ve noticed that customers are anxious to get back into the store to shop. To win that foot traffic, you need to win emotional connection with the customer, and stores are a vehicle for that. It’s hard to get that love for a brand through the online experience. Every customer is tracked, retargeted with lots of communications. I’ve seen that the most successful brands show that they really care about their customer, that there’s some added value they really give to that customer. Then that customer has a longer way before they choose to go to someone else. They’re more likely to be loyal.”
Operations, Digitalization, and In-Store Brand Identity
The store staff has a large role to play, Francesca notes, in creating emotional connection with the customer. “I think training and keeping your staff engaged is very important,” she says. “There is a lot of turnover in the stores and it’s really hard for retailers to continue to employ store staff. It’s not highly remunerated. But investing in your staff is very important, they are the face of your brand.
“Plus, imaging the product is critical. The store is limited and can’t show everything. So you have to choose what products you’re going to display. Are you displaying the products that really represent you? And this has the opportunity to be localized, because you have different types of customers in different places. Even at the same income levels.”
Francesca sees a role for digital technology engaging and training staff, as well as establishing a strong brand identity, as leaders work to increase retail sales in future-forward ways. “I know how difficult it is to work with a customer and then go to the backroom to check for a product. If it’s not there you might have to convince the customer to come back. It’s very basic, especially with analog service practices, and it takes time for newer staff to learn. You want to know what’s available so you can answer the customer fast.
“This is where technology comes in. If you can use a digital platform and train your staff even five-minute snippets at a time, which they can use for strategies to sell or to make their work more efficient, that’s a huge opportunity for brands – even or especially those outside of luxury – that want to up their service levels. In going from store to store, doing a comparison of retailers, I’ve come to see that’s not very widespread yet. So there’s a lot of room for growth and innovation there. There are of course some brands that have been doing more of a concierge level of service, but it’s far and few between.”
Predictions for 2024
On the already dynamic year of 2024, Francesca says, “Luxury is continuing to grow better than non-luxury in retail and that is very much connected with customer intention. It has a very strong customer base and big marketing investments that helps them continue to grow and build that customer base. That’s not the same for other brands, necessarily. That’s my experience of what I’ve seen.
“I think brands that can stay true to their brand mission, their identity, and spend more in brand-building: those will be more successful and increase retail sales. The ones who develop the right pricing strategies for themselves as well will also prove successful. Relying on discounts and getting as much as you can out in the short-term will not be a successful long-term strategy, however. The customer is becoming more and more aware. 2024 is also supposed to year when travel is to come back to the pre-pandemic level. People are going to spend more on experiences. So you’re going to be competing with travel, entertainment – you need to be very mindful of offering something that has a high value for the customer and that represents the brand identity in a positive way.”
To learn how frontline retail technology can increase retail sales, transform customer experience, and drive associate retention, request your demo of Rallyware today.
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