The Ivy League Goes Retail

Discussion
Feb 23, 2006
George Anderson

By George Anderson


Elizabeth Schweitzer wants Federated Department Stores CEO Terry Lundgren’s job. Maybe not tomorrow, but at some point in the future for sure.


Ms. Schweitzer is a 21-year-old graduate of the Wharton School of Business and, as an Associated Press report points out, she is one of the new recruits to the executive training program at Bloomingdale’s.


Why has Ms. Schweitzer chosen retailing to start her career?


“This is a time ripe for young talent to come up in the world of retailing. And I feel lucky,” she said.


Ms. Schweitzer is part of a group of students to graduate from Wharton with a concentration in retailing. Her school and many others are now offering retailing curriculum as the industry tries to promote itself as something other than a business where the pay is lousy and the hours are worse.


Retailers still face an uphill battle in attracting top talent. While Ms. Schweitzer has chosen to enter the Bloomingdale’s program, many of her classmates are choosing to enter fields such as investment banking, where total compensation could reach three-figures in the first year. Entry-level management trainee jobs typically top out at $46,000 for Wharton grads.


Hiring top talent is one thing, but keeping it is another. Many who enter the field, leave it for greener pastures (re: paychecks).


Moderator’s Comment: What will retailers need to do to if they are ever to get past the challenges they face attracting
and keeping talented individuals?

George Anderson – Moderator

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11 Comments on "The Ivy League Goes Retail"


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David Zahn
Guest
15 years 6 days ago
There are two issues here…one is attracting the talent. The other is retaining. Attracting talent is the easier of the two to resolve (and in many ways, it is already underway). The advent of retailing becoming more quantitative, more strategic, more technological, etc. allows a retailer to say, “you can go work for (manufacturer X, investment banker Y, or consulting company Z), but all of them will ultimately be calling on the person who accepts this job I am offering you. The manufacturer calls on my stores, the banker structures my deals, and the consultant attempts to assist me do my work better. All of them sit on the sidelines until I need them.” OK, that may not be EXACTLY the pitch given to the new recruit…but it is not too far afield from what it COULD be. It is the retaining of the talent that retailers need to pay MORE attention to…and that, frankly, comes down to focusing on improving the business by using the ideas (those new-fangled college taught things) presented and offered,… Read more »
Mark Lilien
Guest
15 years 6 days ago

If you were the head of a film studio, you’d hire the most talented writers, directors and stars you could find. If you were the head of a law firm, you’d hire the most brilliant litigators you could find. If you were the head of an investment company, you’d hire the brightest analysts and traders you could find. You would not say to your HR chief, “Find me people who’ll work here for the same pay the average firm in our field pays.” If you did say that, you’d get average performers in your field, and you’d suffer average turnover and average performance. The average retailing company DOES say that and gets average results. Unfortunately, average results in retailing equals lousy results.

Don Delzell
Guest
Don Delzell
15 years 6 days ago
Oh God, don’t get me started on this one. As a graduate from a Tier 1 MBA program, and a 20 year veteran of all aspects of retail, I’ve been there and done that with regard to how the industry attracts and keeps talent. Frankly, the reason I got into retail in the first place was because my peer talent wasn’t interested, and it gave me a competitive advantage! Target represents a best practices model worth reviewing. From the internal consulting group to the cross functional development path and the project management disciplines, this company has as much going for it as 3M or P&G. Best Buy is another case in point. Federated has always done a better job of attracting and retaining talent than anyone else in that niche, and the executive development program at least used to have a good initial series of required steps. What BBY and Target do that WM is starting to do under Castro-Wright is extend the time horizon on executive development into a career long effort. Federated and… Read more »
Bernice Hurst
Guest
15 years 6 days ago

Now here’s a shocker – today I come not to ridicule Race but to agree with him. Motivation, passion, empowerment, respect are all things that we all need and deserve. If retailers invested a bit more time in encouraging their employees, they might be more than repaid. They might even find that those employees trigger increased customer loyalty and bottom line profits. Investing in people, as the programme here is called, more than pays its way and would create an environment where everyone benefits. I’m sure my views could be supported by statistical evidence if Race or anyone else needs it but I’m equally sure that there are a lot of RetailWire readers and contributors whose experience would match.

Kai Clarke
Guest
15 years 6 days ago
I agree with Mark and David on this. This is a two-pronged approach which requires both attracting and keeping talent. The key here is developing a system which reflects modern day business to manage change, motivates employees, develops talent, and pays them very well. Late nights, weekends and menial tasks all take their toll; when retailers do not support their staff, fail to rotate their personnel, and do not encourage an atmosphere of fun and family. Combine this with poor pay and no pay for performance program and you have an overworked, alienated, disgruntled work-force. This results in poor customer service, unhappy customers, and less-than-stellar corporate performance. The end result is high employee turnover. Instead, the solutions come directly from any great business’s playbook: Attract the best talent, pay them more than they are worth, motivate them to exceed their goals and objectives (which need to be clearly defined, realistic and achievable), keep them challenged both personally and professionally, and foster an atmosphere of fun and family. After this, the rest will take care of… Read more »
Race Cowgill
Guest
Race Cowgill
15 years 6 days ago

Bernice, you nicely brought out the main point, which I left out: the benefits to retail organizations in taking this approach are enormous. We have one example of a regional chain that took this path and nearly doubled their margins, and increased revenues by 42 percent in the second year after implementation (while competitors increased revenues by 5%). This wasn’t easy. But as I’ve said before, it was simple. The point is: this works, it can be done, it’s powerful, it’s practical, and it pays.

Race Cowgill
Guest
Race Cowgill
15 years 6 days ago
I’ll open myself to more ridicule and report that our studies, along three other large-scale ones from other firms, show that despite what people think and say, the biggest motivator at work (and in life) is not money. The three biggest motivators: – Having the power to make a positive difference in others’ lives in significant ways. – Having the freedom to pursue ideas and pathways that provoke a person’s curiosity. – Having the freedom to collaborate, and collaborate with those who share values or passion. Over and over, we have found that under these conditions, persons develop an inner motivation that contrasts starkly with the carrot-and-stick motivations pervasive in the business world. If a retail organization undertook to truly re-examine (with data), first, its assumptions about what motivates people, and second, how its own organization hinders or even crushes motivation, it would be an astonishing event. We have seen, over and over, organizations’ desire for making positive change overwhelmed by their fears when they confront where they are and where they need to go… Read more »
Santiago Vega
Guest
Santiago Vega
15 years 6 days ago

My guess is that those fresh Ivy League recruits will get disenchanted in a year or two. Lousy pay (especially compared to the $300,000 incomes their peers are getting at private equity and investment banking firms), highly bureaucratic ambience, mediocre co-workers, etc…make the retail industry very unappealing, especially for young ambitious graduates wanting to make their mark and “change the world.”

Carol Spieckerman
Guest
15 years 6 days ago

Don’s comments regarding retailers not taking the long view are dead-on. Most truly EXPECT their organizations to be a revolving door and it becomes a self-fulfilling prophecy. I’ll throw in two more thoughts. It’s hard to keep buyers and management happy when they are sitting across the table from vendors going on about their wine collections, great new sports cars, frustrating golf game, etc. Buyers are sleeping three to a room during New York market week while their vendors are staying at the hottest boutique hotel. In vendor assessments, I am constantly astounded by how many vendors are indiscriminate by boasting this stuff with their buyers. Secondly, I believe there is still a disconnect between buyer training and buyer reality. They are still trained to “buy” – that is, use their creativity, form opinions and act upon them. They go on to get hired as implementers and essentially are told not to grow a (creative) brain. Not true in all cases but true enough in most.

Daryle Hier
Guest
Daryle Hier
15 years 6 days ago

In one context, the “money as motivator” seems to be the simple answer towards keeping talent (new or seasoned). My anecdotal experience says direction and freedom to go after one’s pursuits and ideas is by far the best motivating approach to hold onto talent, although good pay doesn’t hurt.

Too often I’ve found that personnel in sales and marketing are there to collect a check and the company be damned. This leads to lack of imagination (& ideas), which becomes the heavy weight hanging on so many necks of the corporate world. On the other side of the coin, a business with forward thinking people will benefit, which in-turn helps the bottom line and thereby allows better pay. It is simple.

will graves
Guest
will graves
15 years 22 hours ago

As a college student who hopes to work as a retail buyer or merchandiser upon graduation, I realize that the pay I will receive is far below that of my friends who plan to work in the insurance and finance industries, but honestly it does not phase me one bit. I love retail, and nothing fascinates me more than finding consistently better ways of captivating the consumer, offering them what they want and need, and building loyalty that keeps them coming back for more. There is so much more to life than just earning money. There is a lot to be said for enjoying what you do. I am sure almost all of you who post on this site have an undying love for retail.

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