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[22 comments]

Is Retail an Ideal Career?

July 18, 2011

In an open letter to retail company executives, Kip Tindell, CEO of The Container Store, asserted that retail "is the best profession out there." He added, "It's the most exciting, the most creative ... products, merchandising, marketing, logistics, technology, vendor partnerships and of course the people."

Mr. Tindell's note encouraged retailers to partner with the NRF Foundation to help position retail as an appealing career opportunity for students and other job seekers.

"I personally can't think of another way I'd rather be spending my career than nurturing a retail business and building mutually-beneficial relationships with everyone who we come into contact with," he wrote. "There is absolutely no reason that the best and brightest students coming out of school shouldn't consider retail as their career."

Mr. Tindell particularly encouraged retailers to become a Careers Employer Partner of the NRF Foundation. For a one-time fee of $5,000, retailers gain access to "talented, budding professionals" exploring retail as a career, as well as a spot on the group's online forum where blogs and other postings can help a retailer attract candidates.

Mr. Tindell's proclamation comes as several articles have appeared questioning career prospects for younger workers, particularly given the challenges recent graduates have had finding jobs.

The value of a college degree is also being increasingly questioned as costs rise. Peter Thiel, a libertarian venture capitalist who co-founded PayPal, established a fellowship this year that offered 20 teenagers $100,000 each if they dropped out of college and pursued entrepreneurship instead.

In an Op-Ed piece last week for The New York Times exploring job stimulus efforts, columnist Thomas Friedman asserted that younger workers will have to act more like entrepreneurs in forming their careers.

Reviewing The Start-Up of You by Reid Garrett Hoffman, a co-founder of LinkedIn and an early investor in Facebook, Mr. Friedman wrote that one challenge for younger graduates is that many of Silicon Valley's new breed of stars (Facebook, Groupon, Zynga, Twitter, etc.) "just don't employ a lot of people, relative to their valuations." He also pointed out how corporations are using automation, software and outsourcing to reduce, head count, health care and pension liabilities.

But Mr. Friedman particularly stressed how globalization and hyper-technological innovation is forcing people to continually reinvent their careers.

"The old paradigm of climb up a stable career ladder is dead and gone," the author, Mr. Hoffman, told him. "No career is a sure thing anymore. The uncertain, rapidly changing conditions in which entrepreneurs start companies is what it's now like for all of us fashioning a career."

Discussion Questions:

Discussion Questions: How can retail be positioned as a more attractive option for college graduates? How is technology and globalization transforming career paths, whether at retail or elsewhere?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Would you advise your daughter or son to pursue a career at retail?

Comments:

I believe I've quoted my friend Greg Girard here before on this topic. Go into any executive board room in ANY industry, particularly in the US. Ask those people whose first job was in retail to raise their hands. Invariably, 90% of the people in the room will do so. The follow-on question is "Given that retailers get first dibs on the best talent available, how do they let it slip through their fingers?"

We all know the answer. Lack of retention plans, career pathing or even giving the store manager time (and money) to find and nurture real talent for something other than the store manager "bench."

It all starts in stores (at least as of today), and that's where we get our first crack at talent that thinks it's transient, but can be made otherwise. Transform the employee experience, and we will transform the customer experience and attract more talent at the same time.

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Paula Rosenblum, Managing Partner, RSR Research

From a small business perspective, retail can be brutal for a budding start-up company. Finding capital, permits, rent, promotion budgets, etc., will require an extensive knowledge of your product, and market.

The hours at first are 60-70 hours per week, and you better be ready for some sleepless nights, as payroll must be met, and the vendor requirements are much tougher these days. This is not to discourage anyone that is attempting to work in retail, as I'm stating the perspective of an owner, BUT a manager in a retail store will put a lot of weekends away from their family working at any retail business, as most of the sales revolve around the weekends. It is hard work, and if the pay is good, then go for it, but it is not a 9-5 job, like other industries. It has served me well, but it is what I've been doing for many years, and my family is used to it by now. College graduates today must be prepared to take a job that may not meet their high pay standards, in order to prove their future worth to any company out there, as jobs are scarce.

Retail may be the answer, as more jobs are available in this sector. Good luck to all....

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Tony Orlando, Owner, Tony O's Supermarket & Catering

First, a shout out goes to Peter Thiel who is helping to re-ignite entrepreneurism as a way of life. Notice that he isn't directing kids to "retail" or anything else.

Second, we just must stop doing what has been done by career councilors (and parents) since the beginning of time. And that's defining life by jobs. We all grew up being asked "What do you want to BE when you grow up?" Wrong question. Better and more meaningful would be "What would you like to 'accomplish' with your life?" In other words focus on the why not the way.

Retail, or any other job or profession, is a means to an end. What is it that someone can accomplish 'through' retail? That's a lot different than trying to push people into being 'in' retail. 'Through' leads to freedom, innovation, meaning, joy and control over your own prosperity. 'In' leads to a job and too often joyless subservience.

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Ian Percy, President, The Ian Percy Corporation

Increasingly, retailers, and their suppliers too, need to focus their recruiting efforts on both attracting recent college grads and career-changing managers. To attract college grads, retailers need to emphasize the stability of the industry when many others are going through challenging times. They need to understand the differences between today's grad (looking for quick experience, much more mobile, lives on their smartphone) as compared to the college grad of, say 1984 (willing to work long hours, wants the opportunity to advance over his/her career, genuinely interested in the business). And, they need to be creative with both the recruitment strategy and the jobs themselves. The old way of recruiting just isn't going to work.

To attract the career-changer -- and I think this is actually the more important of the two audiences -- some of the same advice: emphasize the stability of the industry and understand the difference between these candidates and traditional ones from within the industry. In addition -- and this is the reason retailers need to focus on this group at least as much as recent grads -- the industry needs the perspective of outsiders or it will go stale. Retailers need to communicate to these candidates that their input is critical to the growth of the industry and that they will be part of a great team. Money and benefits are important, but after the last 3 years, the real attraction will be stability and confidence.

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Ron Margulis, Managing Director, RAM Communications

First, any discussion of a retail career must focus on store management vs. "headquarters." Consolidation in the industry over the past twenty years has made retail movement in corporate headquarters more difficult to achieve. At the same time, many retail organizations have very narrow pyramids of career advancement: It may be easy to get the first job but hard to achieve real career progress in five to ten years.

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Dick Seesel, Principal, Retailing In Focus LLC

Retail is a great career to learn how to communicate with people. Not as it is for some but as a vehicle to learning how to serve--or not serve-someone else. Retail used to be the catalyst for many who are successful now, but that's before everything was about the deal and the Like.

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Bob Phibbs, President/CEO, The Retail Doctor

Technology and globalization are linking the world like never before, and recent college grads need to understand how to harness this technology in whatever their chosen fields. Retail, too, needs to embrace these changes and make their employment offerings more exciting.

Most retail is currently seen as being a place to work when you have few other options. There are no clear paths towards earning a significant income or towards career growth. Frequently the lines of communication to sales associates are weak or nonexistent. There are few ways for associates to impact the workplace. As a result, they feel undervalued and unappreciated. For Gen Y, this is deadly.

Are retailers really willing to invest in their employees? Until they do, and until they make their stores a place where people want to work and grow, retail will not be perceived as a place to have a career.

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Max Goldberg, President, Max Goldberg & Associates

First, kudos to Kip Tindell for running an amazing retail chain. But Paula's right; retail may be an ideal career for its office workers, but its sales associates may have low pay, uncertain hours, and no ability to make decisions--not strong indicators of a career path.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Make a list for why to have a career in retailing. Not any specific company, but just retailing. Now make a list for why to go into some other profession. I am sorry to say that retailing will come out on the short end for most people who really have a lot of ambition and drive.

You can pick a few companies like "The Container Store" and come up with a lot of reasons to work for them.

Like most companies that hire a large number of front line employees, and companies in the service sector, their employees will not likely become employees of choice no matter how hard they try. What these companies can become is employers of opportunity.

It is hard to make a sow's ear into a silk purse.

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Mel Kleiman, President, Humetrics

Retail is a great way to learn business from a multi-dimensional and real-time perspective. Actions impact sales and it's highly measurable. While I'm biased, having started my career after undergrad in Macy's Executive Training Program, every day I draw on that experience.

So I agree with Paula and disagree completely with the notion of encouraging people to skip college. This is wrong on so many levels, at least for a majority of people.

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Phil Rubin, CEO, rDialogue

The only way for any industry to attract the "best and brightest" is to pay competitive salaries for people who fit that category. That means cash-strapped retailers have to find ways to increase starting salaries for college grads (since nobody really believes they will stay in one place long enough to "climb the ladder"), possibly including reducing the compensation of top execs for the betterment of the company as a whole.

Dan Berthiaume, Editor, Independent consultant

Technology has opened up new career opportunities for college graduates as well as securing equity wealth. Unfortunately retail hasn't found ways to capitalize on that trend. It's time for retail to innovate and then merchandise the values in a retail career beyond being involved in watching the evolving world go 'round.

And what are some of those opportunities? To make retailing more appealing to college graduates, the retail industry should establish a practice of universally offering significant rewards, including equity participation for creating accepted major new retail paradigms. Today companies pay rewards to their board members to do little, or fail the enterprise ... so transfer the incentive mechanisms in that current practice to lure college recruits into retail. Savvy college graduates want a piece of the new action.

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Gene Hoffman, President/CEO, Corporate Strategies International

The types of jobs and their relative supply is based upon a complex and dynamic set of variables including economic vitality, demographics, consumer demand and innovation.

The types of jobs which are available at any given time (over time) are a function of these dynamics. There will always be competition among individuals for the best jobs within the economy and to those with the best ability and aptitude go the best jobs. Those who are best prepared are often (but not always) those who have a college degree. However, even amongst college degree earners there will be winners and losers.

I find the supporting reference articles, especially those questioning the relative value of college, to be somewhat disconnected. One cannot assume that just because you have a college degree that you will be successful. Conversely, there are many (but likely not more) individuals who have no college degrees that have built wealth in the economy. As reported by the US Census bureau, the earning potential of those who graduate from college is roughly double for non college degree wage earners.

Retail, considering that it is a dominant percent of our GNP, has consistently been a major employer of this economy. Retail has never been, nor do I foresee it becoming, a sexy option for those entering the job market. However, it does offer a wide spectrum of potential experiences including marketing, planning, logistics and sourcing. It will continue to attract new entrants, some of whom will build on the varied experiences that they gain from their job and move onto other fields where they can apply this experience and excel.

Technology and globalization can impact the types of jobs available for careers, yet neither of these changes decrease the value of education and ability. The more educated and capable, the better the performance and the brighter the future. That will never change.

Charles P. Walsh, President, OmniQuest Resources, Inc

Kip Tindell is one retailer I respect highly. He and his partner, Garrett Boone built and sold one of the most successful retail companies, The Container Store, and are still part of the management team. And it all started in a garage type environment. I applaud them for their efforts and success. When Kip speaks we should be ardent listeners.

Now here is my problem with what Mr. Tindell is supporting. The culture of The Container Store; and the recruiting, hiring practices are far different from most, if not all other retailers. The Container Store is not looking to hire sales clerks. They are searching for people wanting a career. This is a long-term investment for both The Container Store and the applicant. How he takes the success from The Container Store to the everyday retailer is going to be a challenge. His past says he can pull this off. I wish him luck and hope he gets the support he will need to accomplish a successful start to a long journey.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Richard puts his finger on the heart of the matter. When retail was "local," there were good, solid training programs and career paths for everyone, college graduate or not, to advance to a solid well-paying position. Decades of consolidation have removed that particular path. The sea change represented by e-commerce is equally centralized and people-leveraged.

Beyond the gloom and doom, the retail industry does move like a pendulum. Retailers have exhausted the notion of success through national assortments and, as demonstrated by My Macy's, management from afar. Will retail become "local" again? Probably, but not to the scale that it once was.

After almost 40 years in the business, I agree with Peter Thiel. There are very few industries with the potential fun, excitement, and opportunity for personal impact on the business. But, going forward, my sense is that it will be for a much smaller population.

Bill Emerson, President, Emerson Advisors

Interesting how the question is about attracting college grads, but one of the advantages of retail has been the opportunities offered for those who don't have one.

My personal feeling is that unless you love retail, it's a great transitional job/career. I think it's okay that a lot of people start in retail and move on to other careers.

I think we need to respect and focus more on the development of the part-time and new-to-the-workforce employees. If we invest more in these frontline employees, it will not only impact the store performance, it will also cause more of them to choose to stay in retail. A win/win.

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Doug Fleener, President and Managing Partner, Dynamic Experiences Group

Every successful person realizes it took a lot of help (and luck) for them to get where they are. If they don't realize it, then they are kidding themselves. Whether it is the office assistant who seems to always anticipate what is needed, the IT guy who is one step ahead of the business in planning future applications, or the store manager who is able to build and motivate a loyal store team, the efforts of these people toward the founder's vision are critical.

The challenge with retail is that there is simply not the profit margin to do it right. As was pointed out in this article, many of the newly formed business models highly leverage technology and use the "network effect" to concentrate revenues into the hands of very few people. Traditional retail, spread across many store locations and supporting distributed inventory centers, is completely different from this model. The leverage in traditional retail comes from motivating teams of low wage employees across various locations toward common business goals. Because margins are so tight, it is simply impossible for retailers to offer everyone high incomes.

As far as the college education is concerned, there is a perverse kind of downgrading that is occurring which makes it both more important but also uneconomical to pursue a college education. On one hand, there are so many applicants for positions that employers are requiring a college degree for positions that never needed them in the past. This artificial hurdle acts as an automatic screening tool for the employer. But, because the salaries are constrained by the gross margins, the earnings of college graduates are declining. So if you hope to get your foot in the door at all, you better have a college degree. Just don't expect it to be your ticket to a high paying career.

That brings the whole discussion back to the first paragraph. It is true that successful businesses are often led by visionary entrepreneurs, but they also require teams of "followers." Not everyone can be setting direction. In the virtual world, that is driven by highly leveraged technology platforms there is enough gross profit to reward everyone (visionary and follower) handsomely. In the retail world, where gross profits are tight and a large number of workers are needed, it is simply impossible to reward everyone. The truth is that a college degree is probably not necessary for many of the positions that today require one. Instead of lamenting the lack of applicants with college degrees, retailers should consider another way to screen applicants besides having a college degree. I believe a solid high school graduate with good people skills (team player, member of some clubs, even part time retail employee) that appreciates having a job can contribute more to many retail organizations than a college grad encumbered with student loans who thinks they should be getting paid more.

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Bill Bittner, Principal, BWH Consulting

Like Phil, I started my career as an undergrad in the Macy's Management Training Program and the reasons I joined retail in the early '80s remains the lure of fewer, but still available great retail companies: The ability at a very young age to have responsibility for a multi-million dollar complex business with the opportunity to develop and demonstrate skills in leadership, marketing, analysis, finance, and more. Few careers give a young person the opportunity to engage in such an array of activities.

The Container Store is one of a very few US-based retail companies that invest intentionally on both the employee and the customer experience. Increasingly, the great retail opportunities are international and require the desire and ability to explore life beyond the US borders.

My advice to today's young people: Definitely get the degree--the statistics are on your side. But think globally--some of the best opportunities in retail are happening in Asia and in the Middle East. Learning Mandarin wouldn't hurt. If you can't land an international assignment right out of school, starting in a strong US retail training program and getting a few years of experience will allow you to leap into the global arena more easily.

I live my life today in Hong Kong and enjoy an amazing and dynamic global retail experience. It can be yours too--if you don't limit yourself and maintain a desire and ability to learn more every day.

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Mike Osorio, Senior VP Organizational Change Management, DFS Group

The first thing to do to make a retail career more interesting and even attractive to those entering the workforce for the first time would be to allow the company executives to have a keen practical understanding of the average company employee experience. Letting them visit the store associate life experience for 30 consecutive days per fiscal year, with same authority, responsibilities', pay and benefits, will no doubt provide many accurate executive information needs. The successful executives will develop and implement policies and procedures specific to the company's present day as well as immediate future needs. True genius will be witnessed when corporate communication, training and incentive programs designed to match current market trends and conditions are put in effect on a timely basis to provide real growth for every aspect of the company and all of the employees.

Gordon Arnold, Dept. Manager, Lowe's

I find this question a bit confusing in that it doesn't differentiate between working "for" a retailer vs. "in retail" (i.e. being in management in a company that happens to be a retailer vs. being a salesperson "on the floor"). College recruiting has always been oriented toward the former, and I can't believe it isn't still. OTOH, if a retailer thinks it can pay grads $8/hr with the claim that they need to "work their way up," then I think they're wasting everyone's time.

As for the idea that we should encourage people to leave college: while it's true that some people get little out of the experience, and many would get more if they attended when they were older, it's premature to call for a mass exodus. To use a few exceptional cases as "proof" of the value of entrepreneurship is akin to pointing to lottery millionaires as proof of the value of playing; are college and entrepreneurship really an "either/or" pair? If some entrepreneur wants to say "yes, because my education didn't help me any," then I think that's a reflection on them rather than the value of college in general.

'notcom'

I'd like to echo what Dick Seesel wrote. For just about every major national retailer, at the store level the imperative is to reduce payroll expense as much as possible, whether it's for part time sales help, or store managers. In far too many instances, the store manager role has been reduced to being able to read and execute instructions from the home office.

At the corporate level, relentless consolidation and headcount reduction has left far more experienced professional than there are jobs for.

That said, there are talented professionals opening exciting stores all the time. I get to talk to many of them as they are getting started. They are bringing energy, passion, creativity and freshness to the industry, and as the very best of these grow and expand, there will be opportunity for like-minded individuals to get on board, and grow with them.

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Ted Hurlbut, Principal, Hurlbut & Associates

First, as to the question of whether a college "education" is worth the cost, I'm confident that a quality education can be obtained at modest cost, with great benefits to the student. HOWEVER, there is substantial documentation available that the quality of even formerly highly regarded schools has been seriously compromised for a variety reasons, transforming high priced degrees into parallels to high priced homes, no longer having the market value. The education bubble parallels the housing bubble.

Secondly, the reality of what retailing IS, is at radical variance with what it is thought to be by people looking in from the outside. It is primarily a supply chain, logistical, banking and real estate business, with very poor connection to shoppers. It works so well because merchant warehousemen (retailers) put the stuff that shoppers want in neighborhood boxes, leave the doors open, and shoppers come and get what they want, taking care of themselves.

When I speak of the "Amazonification of Walmart," it is not to cite either of those businesses, but to point out that the sales PROCESS at Amazon will certainly pervade the self-service bricks-and-mortar world, over the years ahead - with or WITHOUT the accelerating use of smart phone technology. So there is plenty of intellectual challenge ahead here. But the bricks-and-mortar retailers of the world are NOT at the forefront of the future of that retailing. Rather the supply chain managing, logistical, banking, real estate business appears set to be drug into the future by forces outside their own industry. It is a lack of intellectual capital, curiosity if you will, within the industry, that fails to attract the advanced educations that might leaven the industry.

None of this is to downplay the brilliance of the current top players in the industry. But those players are brilliant supply chain managers, logisticians, bankers and real estate wizards. There is no particular reason those classes of brilliant people would see the need for, or understand other kinds of necessary genius.

So, what will happen? Where is a Jeff Bezos for "Walmart?" It isn't Amazon's genius at managing the supply chain, logistics, banking or real estate that is needed. It is Amazon's genius at SELLING, a nearly totally forgotten science and art with bricks-and-mortar retailing, that is in want.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Adjunct Senior Fellow, Ehrenberg-Bass Institute

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