In a post-pandemic environment where the cost of living has skyrocketed and there is labour shortages across the board* – there’s no doubt the retail landscape has changed dynamically in recent years.

Here are some trends to watch to lift engagement – both among your staff and among your customers.

Gen Z is on the rise

Born between the turn of the millennium and the early 2010s, Gen Z is the demographic to watch this year. The youngest are tweens and the eldest are in their late 20s, and many of them are going to make up retail staff numbers and customers.

Large retail enterprises have traditionally had trouble engaging with Gen Z because their legacy systems are poles away from how Gen Z make decisions, educate themselves and consume. Any corporation stubborn enough to stick to the old ways are going to go out of business pretty soon, so the lesson is to listen.

Old-school consultancy firms like Bain and McKinsey are not going to give you the insight you need to formulate a solution. If you need to understand the problem, you need to have Gen Zers in the room to identify the problems first and then come up with the solutions themselves; if anxiety is an issue for Gen Z, most older people don’t have a clue how to deal with Gen Z and anxiety, but Gen Z do. A large supermarket chain we are working with has put together a council of Gen Z people to advise them internally on the business, and we’re going to see more of this in the coming year.

Counting the cost of attrition

A general labour shortage puts staff in the driver’s seat when it comes to job-seeking and job hopping. Staff are no longer going to stick around if work conditions are not up to their expectations because there are other opportunities out there.

The retail sector has a general attrition rate of 60 to 70 per cent, and when you consider that general induction – onboarding, training, uniforms etc – costs between $3,000 and 4,000, having high turnover is a serious problem that is now starting to become a focus for businesses who want to stop the bleeding.

Research says that if you can get staff to stay for three months, you have a better chance of retaining them for longer. At the three-month point, new arrivals have started to make friends, they understand the culture and have bought into the culture. Mental wellbeing is a huge issue in this regard; if you can look after your staff members’ mental health, you’ll go a long way to preventing burnout and retaining them longer term.

Turning staff engagement into customer engagement

It’s not rocket science to say that when you have engaged staff, customer experience improves. What you should be looking out for this year, however, is how this transition happens and what you can do to embed it in your business strategy.

As I mentioned previously, Gen Z is going to be a big deal in the coming years and they consume media completely differently to previous generations. Short-form videos like TikTok front load their value – if the scroller isn’t engaged within three seconds, they scroll on.

This means training content should use the same structure: short and sharp value-led content – whether that’s more information about a product, a sales technique they can use or something they can learn about the customer to increase the chances of a sale – to enhance the customer experience, where the value also comes upfront.

What’s interesting about focusing on engagement is that truly engaged staff become brand advocates, which translates into excellent customer service. Flip the staff and you can evangelise the customers.

Engagement in the retail sector has always been important but in the coming year expect a greater focus on more granular aspects on how staff and customer engagement can influence business performance.

The Gen Z demographic as a cohort of staff and customers will come to the fore – and we best listen to them; retailers will look to prevent the large cost of attrition by employing different retention strategies; and brands will seek the magic key that turns staff engagement into better customer experiences and, eventually, profit.

Mark John is CEO and founder of frntlne.