The case, based on the company Blinds to Go, emphasizes the importance of staffing in stores as they expand to meet their growth objectives.
Being a manufacturer and retailer, with a unique sales model - 100% commission based and focus on customer service gave the company an advantage over its competitors. According to the senior management Quality of staff was paramount and hence their original compensation system motivated best performance and fostered a high energy, sales hungry culture at BTG.
To attract more recruits for its expansion phase, the management changed the compensation system from full commission to salary on the recommendation of a newly hired vice president. Sales declined and the overall staff turnover increased. Seeing this the company brought back the old culture and experienced a sales turnaround. This shift also caused another huge turnover in stores. A large percentage of voluntary turnover occurred in the first four months. The higher turnover after eight months was partly due to termination because of sales performance.
The biggest challenge the company now faced was understaffing. The need for additional staff was further aggravated due to its continued push for growth and the tight US and Canadian labour markets. Another concern to be addressed was that the company had planned for 80 per cent of its expansion in US where the employees preferred the fixed pay than the company’s commission based pay structure. During this period BTG had tried several recruiting methods with varying degrees of success. With an IPO in the pipeline and plans to add on average 50 stores per year for the next five years, it was critical for the company to come up with a staffing strategy with focus on Quality of the staff and low employee turnover.
Blinds To Go (BTG) was a retail fabricator of window dressings. It was started by David Shiller in 1954 in the Cote-des-Neiges district in Montreal, Canada. From the mid 1970s, BTG focussed on the sale of blinds. It was able to create a production system that reduced the delivery time frame of custom blinds from six to eight weeks to 48 hours. The reduced delivery time led to overwhelming customer response and the business flourished. The firm, realising their unique advantage of being a manufacturer and retailer simultaneously, began expansion by opening stores throughout Canada and US. By June 2000, BTG operated 120 corporate owned stores in North America. BTG expected to add 50 stores per year for the next 5 years, 80 percent of which targeted to US expansion stores.
BTG’s business philosophy was that quality of staff was cardinal than the store location, customer demographics or advertising. The firm established this by experimenting with a store that was locationally disadvantaged and had declining sales. BTG was able to triple the sales of the said store in one month by deploying their ‘A’ management team and trained staff there. The four staff roles in BTG stores were 1. Sales associate 2. Selling Supervisor 3. Assistant Store manager & 4. Store Manager. Sales associates were the junior most employees and their job was to follow a set plan to help walk in customers to make a purchase. Consistent sales performers among them were promoted to selling supervisors, who were assistant store managers in training, or assistant store managers. Assistant store Blinds to Go: Staffing a Retail Expansion
SECTION E: Group #5
managers were in charge of the stores in the absence of store managers. The store manager was responsible for overall store operations. The BTG selling process involved a high level of customer interaction, which set a very high level of service expectation. Their emphasis on customer satisfaction and sale closure led to higher volume of orders relative to their retail competition
Original Compensation of Retail Staff:
The compensation structure at...