The Winning Path for Retail

As Black Friday kicks off this year’s critical shopping season, best-selling author Daniel Goleman explains why the future of retail may depend on how committed businesses are to purpose.

Daniel Goleman, author of the best seller Emotional Intelligence, and co-developer of the Goleman EI online learning platform, is a regular contributor to Korn Ferry. His latest book, Altered Traits: Science Reveals How Meditation Changes Your Mind, Brain, and Body, is available now. 

Needless to say, Covid-19 has made a significant impact on retail. Korn Ferry recently reported that 49% of global consumers say they shop more online now than they did before the pandemic, while 56% say they prefer online retailers that offer home delivery.

 “We’ve accelerated the whole omnichannel experience by five years,” says Craig Rowley, a Korn Ferry senior client partner who specializes in the retail industry. “If we hunker down again, even more e-commerce activity will come.”

In the early months of the pandemic most retailers were forced to focus on upgrading their technology and creating a contact-free shopping experience. Now, with free shipping, free returns, and same-day delivery on the rise, retailers face a new conundrum: once you’ve met the consumer's need for safety, how do you stand out from the onslaught of online competition?

If retailers can think beyond contact-free, they may find they are facing a golden opportunity. While I have argued that it’s important for companies to hold on to their environmental concerns during this pandemic, I might go a step further and ask if the very future of retail depends on how willing businesses are to double down on their purpose?

Research has shown that over 80% of consumers would prefer to buy from brands who encourage a sustainable lifestyle. Similarly, a recent study from IRI found that over the past four years, sustainably marketed products have grown seven times faster than their conventionally marketed competitors.

Even before COVID, floods, wildfires, and growing conversations around inclusion, consumers were already looking to brands to provide them with something more meaningful than a product. In 2019, the Harvard Business Review reported that out of 70 senior executives at 43 global institutional investing firms—including the world’s three biggest asset managers (BlackRock, Vanguard, and State Street) and the government pension funds of Japan, Sweden, and the Netherlands—environmental, social, and governance (ESG) issues were “almost universally top of mind.”

When it comes to the environment, certain companies have been leading the charge. Seventh Generation, the cleaning product company known for its natural products, announced that they will move away from plastic, starting with a new line called Zero Plastic Homecare. Similarly, CVS Health, Target and Walmart, were joined by Dick’s Sporting Goods, Kroger, and Walgreens to launch a Beyond the Bag Initiative, aimed at identifying, testing and implementing viable alternatives to single-use plastic bags. And apparel giants such as H&M, Kering, Nike, and PVH have created the Global Fashion Agenda, a not-for-profit organization that promotes sustainable fashion through the efficient use of resources, safe working environments, and closed-loop recycling.

But these moves aren’t just smart for the environment and the consumers, they are smart moves for recruiting too. I recently shared a study from the Harvard Business Review, reporting that more than 90% of employees would be willing to trade a percentage of their lifetime earnings for greater meaning at work.

Retailers will want to pay attention to this kind of data -- especially before the holidays.

In September Korn Ferry surveyed more than 50 major U.S. retailers, with annual revenues between $50 million to more than $20 billion. Nearly half reported that they are having a tough time attracting employees for the upcoming holiday season, and nearly a third of retailers are leveraging incentives such as bonuses, premium pay and increased employee discounts to attract new hires.

“The need for talent varies greatly from retailer to retailer, with specialty stores such as clothing boutiques finding it difficult to compete against Big Box retailers that pay better,” Rowley says. “The effects of last spring’s shutdown due to the pandemic are still impacting many retailers, as they laid off employees who didn’t come back when stores re-opened. Hiring managers will need to be creative to attract seasonal workers.”

But what if, in addition to money, they also leveraged the power of purpose? After all, purpose could make up for a variety of challenges faced by retail over the past eight months. What does it look like to switch to more sustainable supply chains? How could purpose help close the widening gap between small businesses, big box stores and mall-based businesses? How does shopping sustainably make up for the loss of the hands-on shopping experience?

If we can envision a post-COVID world of more responsible retail—and make real strides in that direction—it’s a safe bet consumers and employees will come along.

Click here to learn more about Daniel Goleman's Emotional Intelligence Coaching Certification.