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Company Culture in the Retail Industry: Troubleshooting Your Top 4 Challenges

Navigating Culture in the Retail Industry

Company culture is not one-size-fits-all, and that’s especially evident when it comes to company culture in the retail industry. These HR managers and recruiters must hire, retain, and motivate large numbers of hourly workers, create and maintain a company culture that represents the brand across states and sometimes oceans, all while navigating the changes in the industry.Fortunately, if this sounds familiar, you aren’t alone, and technology is making it increasingly easier to work through these challenges. Here’s a look at four common barriers to crafting a positive company culture in retail and how you can troubleshoot them:


Challenge 1: Company culture varies by geographic location

Maintaining a cohesive culture across locations is a challenge for any organization. However, when a software company might have 1-2 offices per region, a retail organization could have 10+ stores per region, in addition to their corporate offices. This makes creating a shared employee and culture experience even more difficult.

Solution: Align around mission and values and empower regional managers

Your company’s mission and values should be the common thread that unites employees and connects them to a larger purpose. For example, employees at Wawa are reminded that they’re not just making sandwiches–they’re helping friends and neighbors have a better day.” For a company with stores on every other block in various cities, this type of thinking pays off: Wawa is responsible for selling one in every five cups of coffee in its active regions.However, sometimes variation by location is intentional, such as with grocery retailer Whole Foods and fashion retailer Zara, where the location picks up the flavor, feel, and products of its geographic location; stepping into each location is like stepping into a new store. The key to balancing this natural (and welcomed) variation with a cohesive culture is to align around the mission and values as a common compass, while empowering local management to make the best decisions for their region. For example, the hypothetical value of “always be learning,” could take on different shapes depending on location. It is the responsibility of local management to determine how to incorporate the local flavor and priorities into value-based programming.This strategy has worked well for Texas-based grocery chain HEB. In an HBR article, the president and COO explained: “The key is pushing decision making to those who know best — partners in our stores — and having great leaders and partners to be constantly learning and working to evolve our business.”


Challenge 2: High turnover for hourly workers

According to recent research, turnover for hourly retail workers is higher than ever, a shocking 65% of hourly store employees compared to 18% in corporate positions. Unfortunately, many factors contribute to these high rates, including low hourly wages, strenuous work, and poor working conditions. Even worse, HR managers and recruiters often feel powerless to change these conditions due to limiting economic factors or simply the nature of the work. But what HR managers can do is listen.

Solution: Give all employees a voice by collecting ongoing employee feedback

The best way to understand why your hourly employees leave and what your organization can do to help them stay is to ask them and take action accordingly. Collecting regular feedback and consolidating it in a single platform will empower you with data to align stakeholders and make informed decisions. Further, hourly workers that might not usually have a voice in these matters will feel heard and valued. Take some time to understand and account for any potential barriers employees might face when providing feedback. For example, do employees feel comfortable providing their honest opinions? Partner with a third party to make surveys anonymous. Are employees having a hard time getting to a computer to take the survey? Provide mobile access to the surveys, or even designate time for employees to take the survey on a shared terminal in the break room. Or maybe some team members don’t feel comfortable taking the survey in English. Provide the survey in multiple languages and allow individuals to choose their preferred language. While a responsive culture starts with employee surveys, it doesn’t end there. Use the results to craft clear follow-up communications and action plans tailored by location. You should focus on up to three areas of focus (though one would be better, as Google, Zappos, and Apple all attest). Using the buy-in you’ve developed, spread that focus through division, branch, and store managers so that employees across locations understand how their feedback contributed to change.And remember, not all positive changes require big spending! For example, a high percentage of hourly employees are just as interested in soft benefits, like a relaxed dress code (30 percent), opportunities for growth (56 percent), and flexible scheduling (80 percent).

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Challenge 3: Layoffs in response to economy challenges

Even the most modest round of layoffs can have a profound impact on company culture in the retail industry. Not only are you managing the loss of staff from the layoff, but you also have to be on the lookout for what the Harvard Business Review calls “demoralized survivors” who may quit when the dust settles. According to a recent study, layovers of just 1 percent of a workforce can lead to 31 percent of voluntary turnover!

Solution: Create a transparency plan and coach employees through change

After a round of layoffs, your culture and engagement need immediate triage.  Focus on company communication: explain as much as you can about the details of the layoffs, including future plans. Pay special attention to who is delivering the message of any resulting changes to employees. Changes that affect employees on a business/professional level should be communicated by key leaders. Whereas changes that affect employees on a personal level should be shared by a leader who knows the employee well, such as their direct manager.

Transparency costs nothing, and it’s especially beneficial when you can gain so much from it as you can during layoffs. In particular, MIT’s Human Resources recommends you hold regular meetings to hear how team members are doing, shoot down rumors, and set clear, attainable short-term goals.

Layoffs are usually accompanied by a series of changes — whether it’s an entire re-organization or smaller process adjustments. These can take a toll on employees, and leaders at all levels need to be committed to coaching employees through these changes. For distinct tips on how to do that, check out our webinar recording


Challenge 4: Balancing customer service

In retail, customer service is everything. So then, how do you balance the needs of customers with the needs of employees?

Luckily, these two considerations are more aligned than you might think.

Solution: Happy employees make for happy customers

Employee engagement isn’t just a buzzword. Engaged, satisfied employees – of any business structure – make for happier, loyal and more satisfied customers. When you approach culture as a business topic, rather than an HR topic, engaging employees and customers become part of the same strategy.

For example, Bain & Company studies indicate that employee behavior and attitude is one of the most significant drivers of customer satisfaction. Engaged employees not only spread their enthusiasm to customers, but they also are more dedicated to providing the best product and service to customers. For example, as Bain & Company explains, the “key ingredient” to JetBlue’s high customer ratings is that “JetBlue employees treat customers’ problems as their own.”

While JetBlue isn’t in the retail industry, the same approach applies to companies with notable cultures, such as Trader Joe’s, where employees are empowered to make decisions based on what is best for the customer. As an HBR article explains, “[Retail employees] want a chance to come to work and make a real difference for the company and for the customers they serve face to face.”


Different business structures require different approaches to engagement and culture. If you’re trying to develop a positive company culture for retail, embrace your industry’s unique context to create a culture that works for your business and your employees.

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