Does Brand Retail Training belong as a contractual trade term?

If you represent a brand with technical or brand-orientated products that you sell through channel partners such as retailers and distributors, then this article is for you. If not, you’re still very welcome to read on.

You already know how important training is for developing capable sales associates and delivering exceptional customer experience. Even beyond the commonly-touted benefits like improved employee retention and a consistent brand image, everyone knows that staff training is a core component of success in retail. Given the ways e-commerce has changed the landscape of retail, assigning more significance to in-store experiences as an added value over online shopping, staff training should be valued more highly than ever. Yet many retailers remain unwilling or believe they just can’t afford to give up their shop-floor staff’s limited time for brand training. But why?

When there is limited visibility on return on investment, it’s difficult to justify what is clearly visible as a significant cost. Getting entire teams to stop selling and sit in a room to learn–the cost of that is relatively easy to determine based on hourly wages and typical sales numbers, and it’s a significant figure. But the financial benefit of being trained on products? That is a much less tangible figure, making it harder to determine the exact value training brings, and how that value balances against the time spent and money lost. 

In markets like Watch, Sports & Outdoors, Beauty or Pet, where products can be highly technical and distributors are often large multi-brand retailers, brands continue to struggle to reach shop-floor staff and equip them with the knowledge they need to sell products and confidently advocate for the brand. We hear time and time again from our brand partners that when they were still relying on in-store visits, it was getting increasingly harder to train retailers’ staff, with some stores not allowing rep visits at all, and many brands already reducing field-based reps to save money and maintain margin out of necessity. The current pandemic is probably the ‘nail in the coffin’ for both in-store and offsite face-to-face training. Retailers will want to avoid the potential risk of travelling reps spreading the virus from town to town, and the reps’ employers have had to consider the safety of their people and reduce exposure to large groups of people. 

Since COVID, Myagi has seen a huge increase in demand from brands looking to accelerate their digitization of product training. Many have started to repurpose the rep as a content creator, which we are very supportive of. Digital will rapidly become the new normal for staff training in retail, that is clear.

Additionally, it’s clear digital training will alleviate some of the challenges outlined above, making it easier to reach higher numbers of staff more regularly and increasing visibility around where information goes and when. But one of the benefits of the previous F2F training model – and probably a function of the logistics involved in coordinating it – was that brands and retailers would have formal agreements on what training would be done, when it should occur and who would fund it. This drove a certain level of compliance and outcome, but surprisingly this has not transferred over to digital training as much as you might expect. 

One thing is for certain; Brands will only continue to invest in digital training if they can achieve an acceptable level of engagement on the content they create. This means many brands are seeking more formal agreements with their retailer partners on what engagement they will help them deliver. If retailers don’t collaborate to support brands with this and invest themselves, then over time they will see staff knowledge deteriorate and customer experience decline, eroding their true advantage over online-only retailers. 

Retailers are worried about a number of things, including pushing staff to do training outside of working hours (a topic we will cover in a future post) and having the available budget to fund staff to do the training in-store. But if this problem is left unsolved, it becomes a race to the bottom. Retailers want their staff to be well trained, as do brands, and both see online as a great solution. But if time isn’t made for staff to do the training (ideally in short but frequent bursts) then brands will struggle to justify the cost in platforms and content, and retailers will be left to train their staff on their own, leading to reductions in retention, customer experience and sell-through. 

So how are we as brands and retailers going to ensure that digital training gets the attention and time needed to be successful? Lets first consider why training is treated any differently than the other joint efforts and investments that brands make into retailers to help drive sell-through. 

Consider the compliance, contractual clauses and instructions associated with installing branded visual merchandising displays into retail stores, or with marketing support. By comparison, training obligations are rarely carried out with such rigour–they’re often agreed to as an extra, only partially executed and improperly monitored. 

Since we already know how important brand training is, I believe it’s time retailers start committing (as many already have done) to training agreements with their brand partners and treating them with the same seriousness as other parts of trade terms. In order to do this, brands need to start writing distinct and measurable training strategies into trade deals, outlining the mandatory commitment retailers must make to ensure their staff engage with training materials and holding them accountable to this as they would with other aspects of the trade deal. It’s a collaborative approach; the brands want to achieve a certain level of sell-in, but without commitment on the sell-through support to drive those qualities through the stores, both are left high and dry.

Many of the brands Myagi works with are already doing this by offering specific rebates or pricing for retailers that agree to a certain amount of staff time and online engagement for brand education. This, coupled with the shared transparency available on platforms like Myagi, makes it easier to track and hold each other to account. Furthermore, having hard data on which stores have engaged and which haven’t makes it so much easier to then compare sell-through data to show correlations, giving both sides the previously missing validation of ROI on training, now clearly visible with tangible figures.

As you would imagine, this is a complex topic with lots of exceptions, and we certainly don’t have all the answers. But we are committed to exploring the topic further and helping the industry adapt to a new way of shared accountability as it relates to brand training before it’s too late. 

We held a webinar to continue this discussion, featuring special industry guests Neil Venables (former GM from Intersport UK & Ireland and former Head of Field Sales for Adidas) and Yvonne Stinson (former Head of Home & Electrical Merchandise at David Jones). Follow this link to register for the recording: https://solutions.myagi.com/training-in-trade-terms-webinar/

Saskia Rots
Marketing & Social Media Coordinator for EMEA and beyond.