Retaining dedicated and long-term employees have consistently been a struggle for the retail industry. According to Korn Ferry, “of all retail positions, part-time hourly store employees have the highest turnover rate, with 76% average turnover in 2019.” Although this number is extremely high, it’s remarkably down from 81% the previous year.

Industry professionals have been experimenting with ways to increase retention for a while, looking toward various employee engagement and motivational tools. It takes a holistic approach and well-vetted strategies to build lasting relationships with retail associates. Here are four creative retail sales incentives ideas for employees to help keep them focused and performing and foster a tight-knit team environment.

Retail sales incentive ideas for employees

Here are some retail sales incentive ideas for employees.

1. Use motivation as the starting point

Before establishing sales incentives for employees, it’s important to understand that employee performance is closely tied to motivation. Maslow’s hierarchy of needs “is a motivational theory in psychology comprising a five-tier model of human needs.” The lower tiers must be satisfied before the higher tiers can be attended to. Belongingness, feelings of accomplishments, and achieving one’s full potential encompasses the top three sections of the pyramid, and everyone “has the desire to move up the hierarchy.”

Helping employees move up the pyramid can increase their motivation and happiness and provide benefits for your business.

Motivating your employees is also a great way to make sure that they are more engaged in their work instead of becoming complacent. Engagement is crucial to ensuring that your employees are functioning at their highest level and providing quality service, which can be best achieved by working on the retail incentive ideas. According to a report by IBM,

Organizations that score in the top 25% on employee experience report double the return on sales compared to organizations in the bottom quartile.

This goes to show you the financial benefits of keeping employees motivated and engaged in their work.

Because sales incentives are rooted in motivation, they are a great way to help drive workers to do their best. They give employees a goal to strive toward, reach, and be recognized for. Depending on the incentive, these can help build stronger team relationships, achieve accomplishments on personal and professional levels, and help employees better themselves and work toward achieving their full potential.

Assigning your employee a particularly special project, and providing the employee a reasonable incentive, such as a fair bonus, can help with motivation two-fold. Not only is your employee motivated by the special task, as it is challenging and provides a feeling of accomplishment, but they are also motivated by the additional benefit of the incentive.

2. Strengthen skills with employee training sessions

Because the retail industry is constantly evolving, it’s important to make sure that all employees are up to date on the latest tools and best practices. According to RetailDive, one study “found that 32% of retail employees said they don’t receive any formal training — higher than any other industry surveyed.”

To at least some degree, formal training is a prerequisite for employees to offer the best service to their customers. Besides, many sales incentives are predicated on the employees having a base level of knowledge and experience, which means that having a formal training program can help set them on the correct path.

According to TechCrunch, the world’s largest retailer, Walmart, has decided that they are “upping the game” when it comes to their training platforms and has begun to use virtual reality training tools for over 150,000 employees at each of their 200 training academies. “The virtual reality instruction Walmart will be using is entirely 360-degree video-based and will include interactive on-screen cues asking trainees to make decisions after encountering various situations.”

Large retail chains have begun taking training protocols more seriously, and many have been successful for their employees.

One of the aspects of retail that can change the most quickly revolves around technology, making it a good candidate for training programs. A lot of retail stores use different data sets and tools to help better serve their customers. When appropriate, make sure that employees have access to this information and understand how to perform better and complete tasks. That being said, it is crucial to protect the data of both your employees and customers.

Many businesses use different variations of identity and access management technologies to help keep all the information safe and ensure that it can be retrieved only by the appropriate individuals.

3. Keep money top of mind

When developing sales incentives for retail staff, one of the first things that come to mind is compensation from a financial angle. Although this does work, it has to be executed well. Otherwise, it can create more tension and lead to less productivity.

Ensure that everyone who participates can be rewarded in some way, but potentially the winner “wins more.” If activities are an “all or nothing” format, having only one winner can lead to disappointment, which can hurt other employees' engagement and participation in future activities and incentives. This could also lead to a higher and unhealthy competition level, as employees become more focused on winning than on job-related tasks.

Target is a great example of a large retailer turning to financial-based incentives for their employees. They have several different layers of programs, the first being a $200 bonus to all eligible employees based on their program. Also, “Target had also offered bonuses ranging from $250–1,500 to 20,000 store employees who oversaw individual departments in stores.”

In addition to general financial-based programs, retail employees can play many retail incentive games that involve monetary rewards. A common activity involves having a mutually shared pot of money; when a retail worker accomplishes an agreed-upon task, they get to take a specific amount of money from the pot. In the end, whoever has the most money when the day is over or the pot is out, potentially gets a bonus.

Many fun retail motivational games can be played, but it’s important to remember that not all games have to be directly competitive. Set goals for individuals, and if they are surpassed, employees receive financial compensation. This can be daily, weekly, monthly, or any time frame that seems to be the most motivating for the individual.

Another way to offer financial rewards without directly giving employees money would be to offer discounts for the specific retail store. This allows employees to benefit financially from the offered incentives without having to win cash. For example, American Eagle Outfitters has been known to offer its employees up to 80% off store merchandise.

4. Think beyond financial compensation

Although money is always nice, there are some things that people value more. For instance, many people value the ability to have flexible hours or additional paid time off and will put a higher value on them than simply receiving a cash benefit.

Retail companies that promote healthy and well-balanced lifestyles are some of the most successful, including incentives that emphasize these values. According to Forbes, investing in your employees' health and well-being can improve engagement and decrease the cost of sick leave.

The incentives involved can range from “yoga classes, gym memberships, or company-organized sports, which is also beneficial for team building.” Some of the more forward-thinking retail businesses are also offering opportunities for improved mental health through counseling or other effective methods. Many people find that having the proper diet and exercise allows them to focus better while on the job, which is beneficial to both parties.

Mental health is essential and can affect all aspects of someone’s life. Emphasizing your support of your employee’s mental health is an incentive in itself, as many employees are more willing to work for companies or businesses that invest in their well-being and care about their mental health.

It’s important to have a wide variety of offerings, as some incentives will appeal to certain employees more than others. This is a great way to offer something that might be a little more interesting than gift cards or cash. Many incentive offerings can satisfy diverse employee needs from recognition to work-life balance.

Providing more practical gifts as incentives for your employees can be an additional option. Offering prizes for your employees that they can use may make the rewards more personal for employees. If it’s possible, provide a popular item from the store as a potential prize.

This has the intended effect of providing a prize as an incentive for your employees. Also, it has the benefit of potentially helping employees become more familiar with a popular and well-selling item from the store to understand it better and help customers with their purchases.

Costco provides a great deal of incentives for their employees, and it’s these perks of the job that many employees value most. It’s not simply about the base pay or any financial bonuses, but it’s how Costco treats employees that stands out; “...guaranteed hours, benefits, time and a half on Sundays, free turkeys at Thanksgiving, four free memberships…” are just some of the additional benefits that show Costco cares and is aware of what their employees need most, which isn’t always simply a small pay bump.

Retail positions can be very demanding, and with this comes a high turnover rate and more opportunity for disgruntled employees. Providing incentives for retail employees can help achieve a higher quality of work from your employees, in addition to making their experience more enjoyable.

Retail environments, specifically, can make it difficult to motivate employees for several reasons. Finding unique incentives that motivate employees is key, and that can range from giving them a unique and engaging task to simply offering bonuses or compensation. Offering training programs for your retained employees is key to helping them stay engaged and receptive to new incentives, something that even the largest retailer Walmart has started incorporating.

Increased compensation is often the first incentive used by many retail stores. There are several ways to mix things up and add some additional elements, such as playing a game or having retail employees set personal or professional goals. Beyond financial incentives, offering personalized incentives that promote a healthy lifestyle can prove to employees that the retail stores care about the individual and invest in their own future health.

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Rani Joseph