Have store staff become a luxury?
The summer season is upon us. Fashion capitals such as Paris, Milan, London and New York expect tourists to arrive in droves to snap up luxury goods. However, insiders say even the hottest brands are struggling to recruit enough staff for their stores during the crucial shopping season.
If customers wait too long to be served, they head for the next shop. Boutiques that do not have enough sales assistants risk losing business, analysts say. Since the end of the pandemic, online fashion retail has stopped booming. People enjoy being able to spend time in shops and prefer to try before they buy. Customers want to feel special and get quality advice. Good service is what sets luxury brands apart from more accessible brands and partly justifies their high price. On average, between 80 and 85 percent of luxury goods are still sold in boutiques, not online. Hence, the shop remains the center of the action and staffing is fundamental for brands to meet sales targets.
Last week, the French government unveiled a historic €340 million three-year program to help fashion and luxury brands suffering from chronic staff shortages, hire and train more craftsmen. However, there are also serious staffing issues in the services sector. That includes hotels, restaurants and also boutiques. It’s a serious headache for industry leaders such as LVMH which has a built up a significant presence in that field since its $3.2 billion acquisition in 2019 of Belmond, a group that owns 45 hotels, cruise lines and the fabled Venice Simplon-Orient Express train service. Last summer, several five-star hotels in Paris had to close entire floors because of staff shortages. Although we are already in June, you can still see “hiring” signs in the front windows of fashion and luxury shops desperate to boost their teams.
THE NEXT BIG TOPIC
“Jobs in services are under tension,” said Alexandre Boquel, head of LVMH’s Métiers d’Excellence Institute that includes the training, hiring and transmission of skills applied in retail services and in the arts and crafts its dozens of brands use. “We may need a [government] program of the same scope,” he told Miss Tweed. “This is the next big topic.”
One oft-quoted problem is how sales assistants are perceived socially, particularly in countries such as France. These jobs are regarded as less prestigious than other white-collar professions in the liberal arts, law or medicine. That is partly why young people do not rush to apply for retail jobs, often preferring office work. It is less of an issue in countries such as the United States where people working in retail represent the country’s biggest workforce and there are fewer concerns about how it is perceived socially, industry experts say.
“This is a topic that should not be taken lightly,” said Jean Révis, managing partner at consultancy MAD. “If you want to properly manage the growth expected in the coming years, this topic needs to be anticipated and structured,” he told Miss Tweed.“Around seventy-five percent of sales on average will still be in stores in the next few years, so if you do not have enough staff, you will not be able to reach your full potential.”
Industry experts say most people working in service jobs such as restaurants, hotels and fashion and luxury boutiques did not return after the pandemic. They preferred less tedious professions. There has been a change of mindset. Wellbeing is a priority now and people are no longer willing to work long hours in shops and restaurants and endure customers’ whims.
“Since Covid, quality of life has become a more important factor in career choices,” says Delphine Vitry, managing partner at consultancy MAD. “People are less willing than before to work in difficult conditions, even for a luxury brand. They want flexibility and clear prospects for career progression.”
Even at Chanel, one of the world’s most desirable luxury brands, people applying for summer jobs or permanent jobs, want to have some weekends free and advance notice of their work schedule, staff at the French fashion house say. “But that is very difficult to do since we only get our schedules two weeks in advance,” said one sales assistant at a Paris store which this week was packed with customers eager to see the brand’s newly arrived ready-to-wear collection.
The power is now rather in the hands of applicants than the employer, industry specialists say. Even those people applying to work in boutiques ask to be able to work remotely at least one day a week, arguing that they can sell products and build relationships with customers from the comfort of their own living rooms.
Some brands such as Dior and Chanel allow sales staff to act as ambassadors and post photos of themselves or of colleagues wearing outfits, or sporting luxury bags, watches or jewelry on social media.
“This allows sales advisers to do more than just process a purchase,” says Nicolas Rebet, consultant at Retailoscope, a company specializing in anonymous visits and analyzing the service provided by luxury brands in their stores. “It gives them a voice and lets them tell stories about the brand, under the control of the brand, of course.”
On Instagram, you can find luxury sales assistants who have more than 10,000 followers. He cited one working for LVMH’s Chaumet at its flagship store on place Vendome, Paris’ jewelry Mecca. He has an Instagram account called luca.vendome and described himself as a “Sales Ambassador.” The heading of his account says: “Send me a private message for all enquiries or boutique appointment requests.” Luca regularly posts beautiful videos of Chaumet diamond tiaras, necklaces and sapphire or ruby rings. He also shares photos of Chaumet’s special events and of his trips around the world from Sanremo to Abu Dhabi.
“It is interesting to see how staff can become key opinion leaders on social media,” says Catherine Blot, a luxury consultant who coaches young brands and founded the advisory company La Fabrique du Retail. “Sales advisers have become influencers but not everybody is capable of doing that.”
TRAINING IS FUNDAMENTAL
Universities specializing in luxury such as France’s Sup de Luxe, founded by former Cartier CEO Alain-Dominique Perrin in 1990, say students are not rushing to work in stores even though it is essential to understanding the business. “We struggle to make them understand that retail is fundamental,” says Clémentine de Goy Soulier, head of Sup de Luxe bachelor’s program. “They need to be confronted with clients and exchange with them.”
She says most students want to work in marketing, merchandising and digital communications. “Very few of them chose retail and that is partly why brands struggle to hire enough people.” Also, the weaker the brand, the more trouble it will have attracting recruits. Chanel and Hermès, for example, receive more applications than Tod’s or Ferragamo because they are perceived as more successful and popular brands.
Training is also fundamental for good service in store. Most groups, including LVMH, Kering and Richemont, have internal training programs. Kering launched its own in 2016. It focuses on training methods and recruitment and is run by each brand with its own specific features. In 2021, Kering launched a training program for its teams in China, taking advantage of the pandemic and the fact that shops were closed to spend time on investing in its retail teams. The program involves working for two different brands over 21 months, including Saint Laurent, Bottega Veneta and Balenciaga. Lastly, this year the French group launched a retail graduate program for students in Europe called Kering Keys Retail, but it declined to say how many students it aimed to enroll.
TIES WITH CLIENTS
Some brands, such as LVMH’s powerhouse Dior, have introduced career programs for people working in boutiques, promising them that, after a few years, they will be able to work in other departments such as marketing or strategy, or in more senior managerial jobs. However, internal sources at Dior say these programs apply mainly to young people, not to experienced sales staff who have been working for the brand for more than 10 years and have a solid address book. Dior is keen for them to stay where they are. They have built strong ties with local clients, particularly during the pandemic, and the company wants them to preserve these relationships. They are essential to keeping sales levels high.
“The big names in luxury are more accustomed to controlling their brand image as a house than as an employer,” says Vitry from the MAD consultancy. “It's not just a question of money, it's also important to give meaning to the job.”
In China, however, sales assistants care more about the money they make than the purpose of their jobs. The market there for recruiting sales staff is tighter than it has ever been. No-one expected the country to open up so quickly earlier this year and for demand to recover so strongly. “Before Covid, it was not easy to keep staff and recruit as people left easily for another brand and a higher salary,” said the Asia Pacific head of one of the world’s top five jewelry brands.
“Today, it’s become even more difficult to hire staff with experience in luxury and who speak English. Everyone needs to hire at the same time, so competition is particularly fierce right now.” In jewelry, sales staff make quite a lot of money from commissions. For example, if Bulgari wants to hire someone from Cartier, or if Tiffany wants to hire someone from Van Cleef & Arpels, the targeted employee will demand a guaranteed salary, whether he or she meets their sales target or not. Some sales advisers can make several hundred thousand euros a year, more than the regional CEO of a brand.
During the nearly three years of off-and-on lockdowns in China, many brands continued to pay staff to retain them and be ready for when the market opens. However, some left anyway because they were no longer getting commissions. Now brands are struggling to replace them, insiders say. The industry is betting on sales in China to make up for weakness in the United States. However, they will have to offer Chinese staff more money to come and work for them, putting their margins under pressure.