4 Chapter 4: EMPLOYEE STORES AND CONVENIENCE SERVICES

Learning Objectives

*Understand and describe the retail trends and operation of employee stores

*Design an effective store layout

*Describe the purpose and meaning of convenience services

*Learn about the retail sales of collegiate athletic items and operation of a bookstore

Video Clips Food, Books and More

https://www.youtube.com/watch?v=6jS5w6X_jvY (Video courtesy of UCF Barnes and Nobles Bookstore)

https://www.youtube.com/watch?v=jBI2PKmHaCw (Kenyon College Bookstore)

https://www.youtube.com/watch?v=QSOgVgM7CDc  (Video courtesy of Ole Miss Student Union)

https://www.youtube.com/watch?v=qHSEUHPASak  (Video courtesy of Tennessee Tech Cafeteria)

https://www.youtube.com/watch?v=ENTINPhtqko  (Video courtesy of College Bookstore Evolved)

https://www.youtube.com/watch?v=QzPzZU_yDR4  (Video courtesy of General Motors Renaissance Center, Detroit)

Introduction

Employee stores are retail operations within an organization (or a company) that offers various items as a service to employees. For years, employee services departments realized that the employee store has the potential to generate a significant and steady revenue for the organization. In general, employee stores are operated under a subsidy provided by the organization as an independent operating unit or are operated on a break-even basis. Employees can stretch their discretionary income by buying food, candy, snacks, beverages, clothing items, greeting cards, gift cards, stationary items, and high-tech gadgets at the employee stores. What benefits do the employee stores offer? Obviously, saving more is one of the biggest incentives for shopping at the employee stores. It was suggested that items sold at the employee stores could save employees 20% off retail prices. The convenient locations and available services can also ease employees’ trouble and hassle in finding ideal and needed items in a quick manner. Employee stores allow employees to run errands during lunch. Employee stores can also be a source of anticipation as new collectible items are introduced as products. In other words, having an employee store is about supporting work/life goals and making work experiences more enjoyable.

In order to operate a successful employee store, several important features and elements need to be addressed:

(1) The store must have a prominent and accessible location for employees to pass through;

(2) The store must offer personalized services and competitive prices;

(3) Proper advertisement (flyers, brochures, and catalogs) should be distributed to inform the employees about the store;

(4) Merchandise should be high quality goods/products;

(5) Present the stores as retail outlets,

(6) Offer innovative goods; and

(7) Stock popular and needed supplies regularly.

Facts about Employee Stores

Although the concept of implementing employee stores is nothing new, research information concerning the conditions and facts of those stores are rarely found. According to a survey of the Employee Service Management (ESM) Association from 1996 to 1999, important facts about employee stores were concluded as follow.

• On average, an employee store ranges from 501-3000 square feet. It stocks about $72,000 worth of inventory and has annual sales volumes of $320,000. About 10% of the stores reach $1 million in sales.
• Sixty-one percent of the organizations (or companies) manage only one store. About 13% of the organizations manage 10 stores or more. All stores have one to three full-time staff, one to three and a half part-time staff, and volunteers.
• The trend of establishing employee stores started in the 1990s. During that period, the hot items for sale included discount tickets, gift certificates, film processing, dry cleaning, video vending, and shoe repair. Additional common products included food, bakery goods, car care services, casual wear, seasonal merchandise, greeting cards, athletic wear, floral services, gift wrapping, printing, shipping and handling, fitness services, appliances, and newspapers.
• More than 50% of employee stores have a frequent shopper reward system (or program).
• Store profits are often used to offset overhead costs, employee activity funds, and donations for community charities.

Photo 1. Employee Store–Photo Courtesy of National Park Service [1]

As the employee stores continue to grow and evolve, they become more convenience-oriented and expand more online services with the unification of various stores through a central internet system. In addition to generating revenue for the organization and employee associations, employee stores can be a place to promote social gathering of employees and to sell and market company logo items, so there are good reasons for the top management team to support the operation of the stores. The keys to gain management support for operating the stores should address the involvement of manpower, time, and costs.

How to get employees in the door?

Scholars recommend that offering items frequently needed by the employees is the best strategy to increase the traffic (or visits) to the employee stores. Therefore, understanding the employees’ favorite services and merchandise is vital to generate routine purchases. Many popular services and product items have been introduced in the aforementioned paragraphs. For many super large factories or organization headquarters (i.e., Ford’s Renaissance Center in Detroit, Michigan and Google’s Headquarter), a simple employee store is upgraded to a combination of cafeteria, entertainment center, and service hub. There are all types of accommodation such as grocery stores, restaurants, cinemas, video game arcade, bill payment center, postal services, barber shop, library, and transportation service kiosk. Regardless of the size of the stores (or centers) or the provided services, the key is to know the customers (mainly the employees) well. The customers generally have a list of expectations such as being treated politely, seeing a variety of new items and choices, expecting long business hours, and experiencing a clean, friendly, and safe environment. To closely learn about the customers, Schwabe (2001) used three categories, Most Valuable Customers (MVCs), Most Grow-able Customers (MGCs), and Below Zeros (BZs), to differentiate between them and suggested details to target, differentiate, interact and serve the employees (see Table 1). Employee store managers can try to rate the values of different levels of employees (based on these categories) to adjust the services.

Table 1. Different Levels of Customers

Employee store managers are encouraged to engage customers (employees) on an ongoing basis so they can interact with customers to learn about needs, interests, and priorities. The learned information about individual customers can help the store managers to customize the way that employees are treated. This practice will make the individual employee feel special and respected.

About Employee Store Managers and Hiring and Operational Concerns

Studies have supported that managers of small retail stores and a small number of employees may directly affect the satisfaction of store employees, customers, and store performance (Netemeyer, Maxham, & Lichtenstein, 2010).The results suggest the leadership and attitude of store managers can certainly impact the employees’ performance, loyalty and overall sales. Therefore, hiring qualified and talented employee store managers to operate the stores and serve the organization’s employees is an important business and managerial task for the top management team.

Based on an ESM Survey in 1997, employee store managers serve an average of 6,232 employees. Normally, they are full-time employee who directly report to Human Resources or administrative services. Each individual manager may oversees up to two stores with an average of 5 subordinates working under his/her supervision. Having a college degree may not be a mandatory qualification. The early report shows only 48% of store managers have college-level education. However, they did have an average of15 years’ retail experience during the surveyed period.

Hiring Process and Evaluation

The authors have mentioned the importance of staffing the employee store, since careful and good hiring practices can result in lower turnover of employees and a strong sales performance. To find valuable employees to work as employee store managers and staff, the hiring process should be well executed. A clear written job application is a “must” instrument to provide background information (location, work hours, work nature, and salaries) and the expectations (i.e., job duties, essential skills, experience, and qualifications). In general, employee stores will operate in standard shifts (i.e., an opening shift that runs from morning to later in the day and a closing shift that starts later in the day). Managers are likely to get a set annual salary ranging from $40,000 to $50,000, with no overtime (working more than 40 hours) pay (Team JDW, 2016). Potential candidates of employee stores often need to follow general qualifications to be able to perform their job successfully (HSN, 2018; Monster for Employees, 2018; Team JDW, 2016).

• Having at least a high school diploma or GED;
• Working flexible hours as business needs dictate;
• Being in good physical condition to be lift, push and/or pull up objects (25 pounds or more);
• Obtaining a forklift license (preferable);
• Having prior retail/cashier experience; and
• Being able to handle the public in a service-oriented role.

In a competitive job market, the organization must conduct the application review process in a timely manner to identify promising candidates. Preliminary interviews (lasting about 20 minutes) will be conducted to get better acquainted with the candidates. The interviews should involve the entire full-time staff in either calling or a face-to-face meeting. After the preliminary interview, select about three candidates to return for a staff interview prior to store hours. Once again, all staff will get to be involved in the informal “meet and greet” then proceed with staff asking more questions. Immediately after the staff conducts the meetings to decide the favorite candidate, they can proceed to the reference checking process. A two-week probationary period is commonly given for all new employees. This offers the employer and the employee both the opportunity to determine if the hiring is a right fit. Once an employee is fully on board, it is encouraged to introduce job sharing to all employees. They will learn all specialized job functions, such as bookkeeping, stocking and managing the store. Both the organization and the employees will benefit from this flexible arrangement, thus essential store responsibilities will not be delayed if the manager or other staff cannot be onsite to perform duties.

Both the store manager and the employees should keep open and ongoing communications to share all issues and concerns. In addition, a private annual evaluation or periodical evaluations should be conducted to ensure the employee has a chance to address job concerns and growth. These evaluations will allow the employees to receive praise and instructions for improvements.

Photo 2. Advertisement of a College Bookstore–Photo courtesy of Steve Chen [2]

In-House vs. Outsourcing

Corporations and companies can either run their employee stores in house or outsource the operations. There are both advantages and disadvantages for outsourcing the employee store operations. When the operations are outsourced, the organizations can certainly reduce overhead costs, manpower costs, insurance costs, and burden for stocking inventories and promoting sales. The organizations also are guaranteed to receive commission (8-12%) from the vendor. However, by outsourcing to the outside vendor, the organization can lose control of the store operations. It is quite possible that the outside vendor may not know enough about the employee’s needs and wants and try to run the stores on a “one-size-fits-all” mentality. This practice will hurt the overall profitability and leave the employees dissatisfied.

Operating a Top-Notch Employee Store

Finding a retail niche to attract employees’ interests and commitment to shop is not an easy task. In order to operate a cutting-edge employee store to serve the employees, scholars have offered numerous tips and strategies to tackle challenges and concerns.

(1) Take care of the logistic requirements and establish a proper contract with the vendors. If the employee store is outsourced, then place emphasis on the following elements, such as: choosing best products (product lines), licensing the organization’s logo, working with ideal suppliers, keeping renewal options and rights to termination, establishing commission clauses, purchasing required insurance, executing high levels of maintenance, maintaining store security and equipment, operating during optimal hours, and forming a merchandising committee to meet with vendors regularly.

(2) If the organization decides to operate the employee store in-house, the store manager and involved staff will need to keep merchandise fresh, new, and exciting, restock frequently, plan special event promotions (lasting 1-2 days or even longer), offer custom-tailored merchandise assortments, and take the store online to broaden their services.

(3) Leaders and managers must constantly keep creative and fresh ideas in mind to seek more profits. Inspire all employees to improve computer literacy and ability in using new technology and apps (especially the use of social media). As the industrial report has suggested, internet retailing grew steadily and remains the most dynamic retail distribution channel in consumer electronics (Euromonitor International, 2012). It is a logical progression to grow the employee store online.

(4) Store managers should take advantage of the uses of e-commerce and social media to enhance the store and in making a great connection with their consumers (employees). The organization must constantly remind itself about the employees’ four basic needs when ordering or purchasing products online: security, support, information and privacy. The store’s official web page and social media presence must be appealing, well-designed, and up to speed.

(5) Store managers need to have a good plan and well-prepared mechanisms to minimize damages by theft. The store must be protected with secure locks and doors. There must be proper video surveillance and monitoring programs to prevent or catch a thief. Maintain accurate financial record keeping processes and monitor cash flow to prevent embezzlement.  In addition, encourage whistleblowers to report wrong doing and educate all staff about the importance of carrying out ethical conduct.

(6) Store’ layout and design are as much a marketing tool as the promotional materials and merchandises are. S,o store managers must carefully design and plan the store layout by making appealing displays, maximizing space and exposure, selecting pleasant music, and controlling and directing traffic flow.

(7) Using technology is a basic way to achieve successful operations in every aspect of the organization. If the store generates at least $100,000 for its annual revenue, it would be worthy to invest in a well-designed retail management system. The point-of-sale (POS) system can help complete a list of functions such as inventory management, inventory markdown, purchase order entry, order tracking and submission, merchandise transfers and returns, statistical profiles on vendors product categories, inventory analysis, periodical profit analysis, and accounting. Like any other adopted plans or programs, managers must evaluate the POS system. They need to get the big picture and learn to share the hands-on experience and understand the report. If the system really works well, they will need to share and upgrade their POS experiences.

(8) Any retail store staff and manager can encounter the experience of dealing with angry customers. As a rule of thumb, the first 30 seconds expression and response are critical for turning things around with a complaining customer. The manager may want to solve the issue within 10 minutes (Ensman, 1998). So, they need to recognize the power of negotiation. Try to understand the consumers’ complaint, clam their emotion, flinch at their proposal, and make a small concession by asking for something in return (Dowson, 1997).

(9) Consider bringing in different vending machines and adopting different rental services (i.e., cars, bikes, wellness equipment, DVDs, and video games, etc.) to extend convenience and increase revenue.

A New Emergent Concern: The Cybersecurity Issues

Many companies and sports organizations accelerate their digital transformation with mobile devices, cloud services, social media, and Internet services/Internet of things to serve their consumers and patrons. They have transitioned their service from the physical store to the online platform. Due to the technological innovations, various regulations and polices remind us about the importance of protecting the clients’ and stakeholders’ information and rights while creating, transmitting, and maintaining data (i.e., HIPAA) (Kim, 2017). Global-wise, the total financial cost due to cybercrimes had reached $6 trillion U.S. dollars (Tunggal, 2022) An average cost of a data breach driven by the proliferation of ransomware attacks could cost the company about $ 4.24 million in 2021 (Tunggal, 2022). This essay seeks to address the importance of increasing cybersecurity awareness and defense in all business and sport sectors for minimizing potential exorbitant financial losses due to cyberattacks.

The ecosystem of Industrial Cyber Security

Thanks to the internet, we can access the necessary and practical information in a short time. However, this convenient technology can also pose risks for users. Therefore, it is important to increase each individual user’s level of awareness against threats that may occur in the cyber network (Duman, 2022). Often time, the organizations and venue’s networks and internet services can be commonly attacked through methods such as a denial of service (DoS) and distributed denial of service attack (DDoS) (Byrd, 2020). Protecting the network systems against the vulnerabilities has become a top priority of the organizations’ cybersecurity measures.

According to the report on industrial cybersecurity in 2018, over three quarters of the companies stated that Operational Technology/Information Control System(OT/ICS) cybersecurity was a major priority and believed their organization would likely be a target of a cybersecurity attack (Schwab & Poujol, 2018). Less than half of the companies had experienced an attack or breach in 2018 that left a relevant negative impact on their bottom line (Schwab & Poujol, 2018). Despite the occurrence of the attacks, the maturity of OT/ICS cybersecurity remained low. The rise of the attacking frequencies and the limited skills and collaboration for responding to such attacks, have made the maturity level of cybersecurity rise quickly. With the rapid development in cyber technologies, we have witnessed the use of machine learning and artificial intelligence to combat cyber-breaches. Thus, the discussions of cyber-risk assessment process, improvement of cybersecurity performance, and cyber-investment cost analysis are increasingly important in a real work environment (Lee, 2021). In addition to the information Technology (IT) specialists, all employees and staff members need to be well-trained for cybersecurity awareness (Kim, 2017).

The publication from the National Initiative for Cybersecurity Education (NICE) highlighted the tasks and required knowledge and skills for the Workforce Framework for Cybersecurity (NICE Framework). The report recommended that students, job seekers, and employees should be provided with a foundation of knowledge and skill for cybersecurity. The trainings would promote competencies of employees to accomplish tasks without fear of cyberattacks. The NICE Framework would serve as a reference source and help improve communication about how to identify, recruit, develop, and retain cybersecurity talent (Petersen et al., 2020). According to the study of Daengsi and colleagues (2021) on more than 20,000 Thai financial employees, the number of employees opening the phishing email decreased by 71.5% after training. The study also showed female employees’ level of cybersecurity awareness was higher than male employees. However, no significant difference in cybersecurity awareness were found based on the age groups of the respondents (Generations Y and X and Baby Boomers).

Concerns of Cyber Security among Sport Industries

The increasing reliance on digital technologies has sprung a new face of threat and presented a new challenge to the sports organizations. Professional sports particularly rely on the production of new forms of data to establish game plan strategy; entice new fans; enhance experience; expand venues and broadcasting service to the internet and mobile devices, improve training efficiency; measure and evaluate the performance; and ensure safety of players; and increase revenue (Jenkins & Evans, 2020; William-Brook, 2019). As sporting organizations increase their dependence on massive new data sets, the leagues, teams, venues, players, and fans can all be exposed to risks by not protecting the confidentiality and integrity of this data.

Although the cybersecurity of major sporting events and venues has been a central topic for more than a decade, unfortunately, many organizations tend to be slow to learn the lesson and suffer a serious cyber-attack (Grow & Shackelford, 2020). According to the United Kingdom National Cyber Security Centre (NCSC), more than 70% of surveyed sports organizations had experienced some sort of breach in 2020 (Savir, 2021). Those victims included Manchester United and dozens of popular British football clubs and sport organizations. Though Manchester United claimed no catastrophic loss or shut down due to the data breach, the attack was certainly “disruptive” (Savir, 2021). In general, cyberattacks targeted on three main domains of sport industries: major sports events; sports administering bodies, clubs, and athletes. These attacks can severely damage the companies or organizations’ products/service, reputation, and brand.

New useful information has been presented by studies to expose the most common types of attackers, their motivation, and the means used for an attack (Pinko, 2021). The new findings can be used as a foundation for further development of cybersecurity risk assessment of sports organizations. Traditionally, system integration of technologies tends to focus on ensuring the availability and reliability. However, it often fails to address the risks associated with the confidentiality (privacy) and integrity of the data. The greatest cyber-risk is violating the privacy of players, such private performance test, or using technology to gain a competitive advantage (Jenkins & Evans, 2020). Ideally, organizations maintaining data and information systems connected with cloud computing and mobile devices should sign service level agreements (SLAs), utilize mobile security software to resist malware, and lock codes. They can educate the clients about the risk of downloading personal or confidential information (Drew, 2012).

Sport gambling and eSports are two popular areas that receive a lot of attention concerning the cyber security as patrons and stakeholders worry about the potential of data breaching (Amelia, 2022; Lauver, 2022). A lack of cybersecurity awareness presents a challenge to the eSports industry, with 50% of stakeholders unaware of anti-piracy technology (Lauver, 2022). Nearly 40% of players do not use a security service, and 42% of players expressed they would want to pay less than $5,000 for security services (Lauver, 2022). These statistics revealed that it is imperative that leagues, teams, betting operators and legislators adopt a sensible framework (a federal regulatory model involving Federal Trade Commission, Security Exchange Commission, and Federal Bureau of Investigation, etc.) to oversee the cyber security issues (Grow & Shackelford,2020; William-Brook, 2019).

One may wonder how future employees in various sport sectors are prepared for the cyber threats. Duman’s study (2022) examines the sport science students’ cyber security behaviors and related knowledge. The goal was to improve the learning curriculum for preparing students ready for different careers in sports and contributing to the students’ development of cyber security awareness. By using the Personal Cyber Security Ensuring Scale, Duman (2022) found that students had high cyber security awareness. However, their score in areas, such as “taking precautions” and “privacy protection” were slightly lower than the other factors. There should be more trainings implemented to address the necessary precautions for improving students’ cyber security awareness.

Convenience Services

Organizations that strives to be the Employer of Choice will diligently provide employees with as many convenience services as possible. The more convenience services, the happier employees are, since they are likely to feel appreciated and choose to stay with the organization. Like the establishment of employee stores, convenience services are those services that assist employees in completing daily tasks. They are provided to save employees’ money and time and reduce stress and frustration; therefore, further supporting the work/life goals of the organization.

Video Clips:

https://www.youtube.com/watch?v=b4SOyQvAHaU  (Video courtesy of NCR Corporation: Petroleum and Convenience Makes Buc-ee’s Everyday Easier)

https://www.youtube.com/watch?v=HIqwB4AP1jA  (Video courtesy of Animal Guy: Renaissance Center, Detroit, MI)

Common onsite services and discount sales include dry cleaning, discount ticket sales (games, movies, concerts and other entertainment), resource and referral services (i.e., printing, packaging and shipping, food catering, wedding planning, doctors, dentists, pharmacies, legal counselors, dependent care, automobile and health insurance, etc.), concierge services (i.e., entertainment and dining options), and car services. In other words, additional useful services will be accommodated to cover what employee stores may not provide.

The primary step to start the convenience programs is about gaining support from top management. Once the approval, support, and resources are obtained, then the concerns should be focused on maintaining the program. The locations for distributing information and services must be carefully chosen and provided. Operating hours need to be determined as well. It would be ideal to make a station or booth available to provide such services within the employee stores. The methods for promoting the services are similar to those used for marketing the employee stores. An effective campaign for promoting a convenience service program to spread the message that a wise family saves with discount programs. It is about showing the employees and management the dollar value of these programs. Voluntary benefits, such as personal or group insurance (for automobiles and houses) that are provided by employers through insurance companies are very popular.  Employers usually conduct employee vendor fairs to help employees interact with insurance agencies, clinics, hospitals, and wellness and fitness agencies. In addition, online delivery for group or co-op orders for groceries and take-out foods are also a trendy practice. The organization may offer online employer sponsored value plans (ESVPs) that bring products, services, and saving to the employees’ fingertips.

Conclusion: Call to Action

Due to the rapid increase of cyber threats and attacks, while providing the online convenience or business service, it is imperative that sports organizations must recognize the cyber realm and danger first in order to protect their assets and data. Each organization’s fan data, athletes, mobile apps, websites, and finally employees are all valuable assets that can be breached by the hackers. Therefore, organizations must protect their “crown jewels” and proactively bring in the external technological support to improve their cyber defenses. Experts categorized attacks into five groups starting from the least threatening to the most dangerous: “script kiddies”, hacktivists, organized crime, industrial espionage, and cyber warfare. (Savir, 2021). Most of the attacks against the sports world fall into the organized crime category as individuals seek to gain and extort from the victim organization. Yet the attacks through human errors (i.e., manipulation through phishing) are most common and vulnerable. It would be in the organizations’ best financial interest to build the defense, prepare for the threats (i.e., backing up the data), and train their employees to eliminate and manage the risks.

Quiz Questions

Q1. Which of the following is true about the employee stores?

1. 1. Employee stores allow employees to run errands during lunch.
   2. Employee stores also can save employees’ time and give them more time to enjoy loved ones.
   3. Employee stores can also be a source of anticipation, as new collectible items are added to the inventory.
   4. All of the above

Q2. Employee stores can save employees an average of 20% off retail prices. True/False

Q3. Inventory management, inventory markdowns, and order tracking are examples of the ______ system.

1. 1. ROI
   2. POS
   3. ESM
   4. All of the above

Q4. Which of the following is (are) popular onsite convenience services?

1. Bill payment centers
2. Car services
3. Library return services
4. All of the above

Q5. Which of the following is not a popular discount program offered by the employers? (Choose the most logical answer)

1. Fire insurance
2. Childcare
3. Entertainment savings
4. Automotive savings

Brainstorming Activities

Imagine yourself as an owner of a decent sized wellness center located in a metropolitan area. Your center has a total of 50 to 60 employees (with a dozen full-time and other part-time staff). The center has grown in size quickly with more than 2,000 on the active membership list. Since the space is available, you decide to operate an “employee store” to serve your clients and your employees. Could you briefly describe what types of services and or ideas that you may have to operate this new employee store?

Suggested Answers: (1) fitness shop, (2) snack shop, (3) massage therapy, and more

Image Citations

[1] Photo courtesy National Park Service, under public domain

[2] Photo Courtesy by Steve Chen, information from Morehead State University

References

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https://jobs.hsn.com/job/st-petersburg/retail-associate-employee-store-st-petersburg/565/7312218

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