The Most Expensive Hidden Cost in Retail is…?

Is a company’s culture created, or is it a result of behaviour? I’ve stayed with companies, and left companies, because of the culture. I’m sure I’m not alone, even if a lot of people do it subconsciously. A lot of people stay where they are, but wonder all the time why they’re not happy in their job. In my experience there are three kinds of culture.

  • Firstly, there’s the culture a company starts out with. It’s set by the founder or founders (whether consciously or not).
  • Second, there’s the culture that a company agrees to, or decides to have together. This turns into a set of values and guidelines that are rolled out across the company. They live on, to a greater or lesser degree, dependent on how good and relevant they are in the first place, and how much of a priority they’re given in the business.
  • Finally there’s the actual culture people experience in a company. This is made by the leaders and can vary significantly dependent on the ability of the leaders to implement, live by, and sustain it. If the companies values are not strong, then leaders go their own way, with their own preferred ‘culture’.

The last one is the most dangerous of course, as you never know what you’re going to get till you get it, and it’s where the worst experiences lie. No company actually plans to have a bad culture! The business just takes over and any true purpose is left behind. This is pretty much where it all lives or dies. Culture ends up being what happens, and it depends on how good the leadership of a company is.

Businesses often forget about the culture, and ultimately, they suffer for it because you can’t deliver good service from unhappy employees.

by Tony Hsieh, CEO at Zappos

The best companies recruit people who fit their culture, so that there is the best chance for the new recruit to enjoy and thrive in the environment. In retail a great store leader will attract the best talent to their store. They’ll recruit people who fit the culture and they’ll build a great team, drive for success, and likely achieve it.

A bad store leader will lose all the best staff, drive low retention resulting in poorly trained teams with low motivation. Then all the other issues will follow, such as high sickness and absence, low morale, and poor standards in the store. This inevitably results in a poor experience for the customer, high shrinkage, high costs, low sales, and on it goes.

Stores like this take a long time to sort out, and a company ends up spending too much time working on the bad stores, taking attention away from all the good stuff happening in the higher performing stores. In fact you won’t sort it out until you address the leadership issue. I’ve seen the store leader make a difference of more than +/- 30% in store sales based on their talent. Recruiting bad store leaders, or promoting people to the position if they’re not ready, is a very, very expensive mistake.

The store leader role is so important in retail, and yet so often underestimated. Each store is an independent business. It has it’s own market, and the store team are usually a large part of the reason why you succeed or fail in that market. As a store you have a reasonably set audience, unless you’re in a tourist area, and that means that if a customer doesn’t enjoy the experience, then they will not visit you again until you give them a good reason to do so, and that’s a hard thing to achieve, and it takes a long time!

The store team is the companies face to the local community, and so they are crucial to local success. In the past you often saw ‘under new management’ signs in the windows of businesses trying to win back the business that previous management lost, and asking for a fresh chance for your business. It’s easy to forget just how important the local area and audience is to sustaining each individual store.

The leader of the store is the person who can make the difference, drive the culture, increase staff retention, and with strong leadership, increase the chances of optimizing the business. I personally recommend investing as much as you can in getting the store leader positions filled with the right people, as every penny invested comes back tenfold in results. Every time.

People are always the experience, and at the end of the day, the experience dictates who wants to work there, who wants to shop there, and how long they want to stay with you…



Do you ever wonder how relevant you are as a leader in retail? How does your leadership contribute to the desired company culture and customer experience?


Retail Event - Reimagine Retail Performance Solutions

Join the Reimagining Retail Event on April 12, 2018

Research from Gartner shows us that 85% of all customer interactions in retail will be managed without a human by 2020. Shocking? We don’t think so. It also leaves us with 15% of customer interactions to really make a difference and stand out from our competitors! We believe that people are the experience in retail. Since only inspired teams can inspire customers, you as a leader can make the difference! Do you want to learn how? Join the Reimagining Retail 2018 Event on April 12, 2018 at the Experience Center in Amsterdam/Hoofddorp.

Information and free tickets (!) available at
Eventbrite by clicking this link!

About The Author

Cliff Crosbie

Cliff is an experienced global business leader with marketing, strategic, operational, franchise, and transformational leadership skills in delivering truly engaging and commercial retail and brand experiences across all channels. He has extensive knowledge of consumer needs, driver of using technology, data analytics, insights and intuition on trends to create a winning proposition. The combination of cutting edge technology to get to actionable insights and reduce back area costs, combined with delivering a World Class front end customer experience in all channels, is the true future of retailing.

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