Small Team Retailers Still Earn Big: A Review of the RIS Top 100 Retailers
Two small team retailers hold onto large shares of the retail market for the second year in a row. Pharmacies, CVS, and Walgreens which collectively share 9.47% of the retail market, landed in the top 10 alongside retail giants, Walmart (12.67%), Amazon (10.4%), and Costco (4.65%), respectively. While Walmart and Amazon retained their positions at the top, in the 2022 edition of the RIS Top 100 Retailers, it is interesting to compare how the top 100 continue to innovate to meet customer demands and stay ahead of the competition.
The list’s top 20 alone reflects the vast diversity of store formats and shopping conveniences, each with a different approach to operating their enterprise. For example, specialty retailer, Home Depot (5th), typically has dozens of frontline employees on a single shift to cover their large format stores and provide customers with the assistance they expect. Dollar General (18th), in contrast, runs a very different kind of store model. To support over 1,800 locations, this small team retailer might operate a store with as few as two people on the clock.
Comparing small team and large team operations
Before we continue, it’s important to define the differences between small team and large team retailers. “Small team” doesn’t necessarily refer to brand size or number of stores, but rather the number of frontline team members needed to run a single store successfully. Comparing Kroger (7th) and C-Store conglomerate, Alimentation Couche-Tard (11th) aka Circle K, provides some context. On one hand, Kroger might operate its stores with 20+ workers at any given time; on the other hand, Circle K rarely has more than a few frontline workers on shift to serve customers.
Whether a retail brand operates with a small team or large team, the same challenges to increase market share and run productive operations remain. Yet, team size proposes a whole new set of challenges, such as dependency on resources that live outside of the store or the necessity of employing associates who can be experts on everything.
The major benefits these retailers see go beyond reduced labor costs. For small teams, every person has greater responsibility, leading to an increased need for high employee engagement and productivity. With a smaller team, every link in the chain is just as important as the last; there isn’t anyone else to do your job for you. In larger teams, however, keeping employees aligned on all the day’s priorities and communicating team-wide announcements remain significant challenges.
High-Touch vs. Low-Touch Customer Approaches
Aside from scheduling labor based on store format, many brands also try to allocate labor based on customer demand and how they approach customer interactions. Retailers with high-touch customer approaches focus on interacting with customers before purchase, providing advice, answering questions, and offering a more personalized experienced. Inversely, low-touch customer approaches are more common in stores where consumers shop with minimal associate interaction. For example, the majority of customers who walk into hardware store such as Lowe’s have at least one question for an employee, but when they walk into Casey’s, they know they want a slice of their famous breakfast pizza, their favorite soft drink, and $20 on pump #5.
High-touch stores likely employ department-based team members with specific expertise that need to be connected to the rest of the store team and to critical enterprise systems to ensure service consistency. Whereas, low-touch stores, both small store and large store team formats, need efficient ways to communicate to and from the store to keep employees engaged and productive. In both cases, each customer service model presents unique challenges while also having distinct operational benefits that help them stay ahead of the competition.
Both styles present their unique challenges and benefits. High-touch stores require a more specialized and knowledgeable workforce who need access to information on the fly. Being able to communicate with the right person immediately becomes a top priority. Low-touch stores search for ways to make their employees feel engaged and need more tangible ways to engage their customers.
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