Retailers Buy Into E-Learning

Web-based training can boost employees’ skills and increase sales.

By Greg Wright Dec 1, 2010
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Luxottica is an Italian eyewear and optical company whose chain stores include LensCrafters, Pearle Vision and Sunglass Hut. Its business is about bringing things into focus for its customers, but Luxottica’s leaders were having a problem focusing on training their employees.

"We just didn’t have the manpower, technology or budget to efficiently and effectively manage and execute our various training programs," says Angi Willis, Luxottica’s learning technology project manager.

But Luxottica’s HR professionals came up with a solution to standardize training of 38,000 employees around the world: They put training online so employees have instant access to information they need to do their jobs, including details on new products and regulations as well as continuing education to keep skills up-to-date.

Retailers have been slow to adopt web-based training, according to analysts. But more are starting to use the technology to boost sales, hone employee skills and make customer service shine.

Retailers such as vitamin and food supplement retailer Nature’s Sunshine Products, apparel maker Wrangler and grocer Giant-Carlisle have jumped aboard the e-learning bandwagon.

Training virtually offers more scheduling flexibility and costs less than getting everyone together, says Jeff Kristick, senior vice president of marketing at Arlington, Va.-based Plateau Systems. The company supports online training for Luxottica, Giant-Carlisle and others.

Going Online

The corporate e-learning market is valued at about $1 billion and growing at 10 percent a year, according to Jeff Freyermuth, a senior research analyst at Gartner in Boston.

Financial services and technology companies were the first to adopt Internet training for employees. More retailers are coming on board, although they still represent a fraction of the business, according to research and advisory firm Bersin & Associates in Oakland, Calif.: Only 20 percent of training in the retail world is done online, compared with 31 percent in the technology industry and 30 percent in financial services.

Retailers’ share of this market "will grow, but it will not grow extremely fast," predicts Stacey Harris, director of strategic human resources research at Bersin & Associates.

Adapting e-learning to retailers remains challenging, experts say. Profit margins are so slim that some do not have the money to invest in iPads, laptops and other equipment employees would need.

Another problem is bandwidth, says Bill Docherty at SumTotal Systems, a Mountain View, Calif.-based vendor. Most stores have a T1 line or satellite Internet service used solely to transmit business and sales data, not to stream online courses to workers.

However, companies such as SumTotal can host online training for retailers on their own network platforms, freeing retailers from having to invest in expensive networks. Retail employees get online training myriad ways, including through audio and slide presentations, video, or text messages.

Retail Revolution

There are compelling reasons why retailers are beginning to adopt this strategy to keep their workers informed:

Cost. Setting up classrooms and flying instructors to different locations can be pricey. Companies can save up to 60 percent of traditional training costs by using web-based solutions, Kristick says.

The prices retailers pay to put learning online vary depending on the level of service. Citrix Online’s webinar service charges Provo, Utah-based Nature’s Sunshine Products $99 a month to host an online conference for 100 employees and $499 monthly for 1,000 attendees. Officials at Plateau say their online talent management software starts at $25,000.

The savings from online training add up quickly, Docherty says. One SumTotal client, a grocery group, was going through an aggressive growth period, opening 20 new stores each quarter. "When it opened a new store, the single most limiting factor was getting new employees ramped up and able to do their jobs," he says.

Executives wanted to maintain the grocer’s reputation for service by giving workers consistent training modules. Online training enabled the enterprise to open stores three weeks early, Docherty says, thereby netting "millions of dollars for the bottom line."

Flexibility. Once a retailer installs an online training system, a course can be uploaded and distributed in minutes.

Employees can take courses by computer, laptop, smart phone, iPad or personal digital assistant. On the sales floor, they can use cash registers or product scanners. For example, Wrangler announced in June that vendor Brainshark Inc., based in Waltham, Mass., had enabled the retailer to deliver information to sales staff through smart phones or iPads.

Sales associates on the retail floor must be "in sync and well-versed in our upcoming promotions and point-of-sale displays," explains Nancy Himmel, Wrangler’s manager of national sales services.

Speed. Retailers are using online methods to get their staff educated quickly about regulatory and product developments, Docherty says. For instance, SumTotal had a grocer client on the West Coast that had to train staff in the pharmacy departments about the Health Insurance Portability and Accountability Act’s privacy rules.

Sending a video to each store and having each one arrange training sessions would take too long. So, executives posted the course online, making it easier and more convenient for employees to access the information. The grocer then "decided to roll the training out to all employees," not just those in the pharmacy departments, Docherty adds.

Outreach. Many retailers are going global and need to have consistent training accessible in all locations. Today, Nature’s Sunshine Products has 260,000 distributors in the United States alone and a line of more than 600 herbs and natural supplements. Executives find it easier to use webinars to demonstrate products and deliver employee communications than to send an instructor to many locations. "It saves us a lot of money," says Ray Lambert, western regional manager. And, "We have met with thousands of more people in places we would have never been able to."

Accountability. Retailers can track who enrolls and completes online courses, says Chuck Searle, a national senior executive at Brainshark. This ability is crucial for retailers such as Luxottica that must prove some employees are certified to do special work. In many states, for example, optical stores cannot operate without a licensed optician on the premises. "The more we can do to get our people certified, the better," Willis says.

Going online also makes it easier for instructors to follow employees over time to see if their skills are improving, Kristick says. This process used to be done manually but can now be automated online.

Retailers can use online tools to determine whether stores whose employees receive more training are posting better sales, he adds.

"You can measure their performance over time," Docherty says. "You can tie the performance to goals and objectives."

Turnover. Turnover is high at many retailers, but better-trained workers tend to stay, Docherty says. Some corporate leaders "realize there is an opportunity to retain these employees by investing in their future."

Harris at Bersin & Associates has found that some retailers tend to offer online training to managers instead of sales associates. Because of cost concerns, some employers are reluctant to invest in workers earning minimum wage or in temporary holiday workers, she says. Well-trained managers tend to pass skills on to subordinates, Harris notes.

Next-generation workers. Younger retail workers are used to receiving information on cell phones or personal digital assistants. In fact, they demand it, says Brainshark Chief Executive Officer Joe Gustafson: "The Internet is a given, mobile devices are now a given, and the asynchronous nature of social media is a given."

Giving Customers Their Say

Web-based solutions can allow customers to influence the way store staff is trained, according to an official at Medallia Inc., a Menlo Park, Calif., company that serves Lego, Nike, Apple and scores of other retailers that capture and use customer feedback.

Customers who visit Medallia’s clients fill out online surveys about their shopping experiences, says Nelson Pascua, vice president of retail client services.

Store managers then use the information to train staff. Store personnel get online alerts to respond to customer concerns, and they receivetemplates and scripts so they can contact customers by e-mail or telephone.

Pascua relays the story of an elderly woman who visited an electronics retailer to find out how her e-mail system works. The woman wanted help because she couldn’t e-mail her grandchildren. "The person in the store sees the computer problem all the time, and it is not high on the associate’s mind. He tells her, ‘I will get to you,’ " Pascua says.

The woman complained. The store managers got an online alert and gave the associate training on how to better handle such a situation. The store sent someone to the customer’s home to personally ensure that her computer was set up and running properly.

"The benefit of saving the one customer is that it is four times cheaper than getting a new one," Pascua says.

Catering to the Cool Crowd

As more tech-savvy young people enter the workforce, the way retailers train workers online will evolve to attract them, Harris predicts.

She used to work for Jo-Ann Fabrics and Crafts, and she says the retailer crafted a flashy, one-hour online training course for interns. Company officials were surprised, Harris says, when the interns said they found the courses, with the usual video and slides, a bit stodgy. "The comments that came back were, ‘This is boring, this is not what we are looking for.’ "

In the future, retailers and other companies that use online training will likely adopt social networking methods, Twitter and even Internet gaming-style courses to attract and train talented workers who came of age using MySpace, Facebook, and gaming systems such as Xbox, PlayStation and Wii, Harris says.

More online training for retailers will also be deployed by mobile devices, similar to what Brainshark did with Wrangler, she says.

There is a reason, Harris explains, why many retailers will use more next-generation web applications: Having hipsters working for them is a great way to attract hipper customers. "They want the cool and neat kids working there," she says, "because the cool and neat kids will come shop."

The author is a Maryland-based freelance writer.

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