Retail is fast-moving, customer-driven, and dependant on multiple stakeholders. However, while many retailers have long viewed employee satisfaction as a secondary concern to customer service, recent research has flipped that thinking on its head. The key to sustainable growth isn’t just better pricing, more stock, or trendier product lines; it’s people. Study after study has shown a direct, measurable link between employee experience (EX) and retail performance.
For example, according to Gallup, boosting employee engagement from 33% to 80% reduces absenteeism by 51%, workplace safety incidents by 64%, and quality issues by 29%. These are operational advantages that feed directly into improved customer service and store profitability. Put simply: happy, engaged employees lead to better customer experiences, which in turn lead to greater profitability.
In an environment marked by high turnover, labour shortages, and rising consumer expectations, improving EX is a massive untapped competitive advantage.
In a nutshell, across a variety of studies, the evidence is consistent and compelling: retail businesses that prioritise employee experience outperform those that don’t. In fact, companies on the Fortune Best Workplaces in Retail list outperformed their peers by 52% and exceeded performance metrics in other industries by 35%.
This isn’t a soft or subjective win; it’s a hard business case. Salesforce data further supports this by showing that stores with top-tier EX generate a 50% jump in revenue driven purely by how employees feel about their work environment.
McKinsey’s 2024 research brings the connection between EX and revenue into sharp focus: retailers with top-quartile EX are twice as likely to achieve top-quartile customer experience scores. Customers can tell when an employee is disinterested, undertrained, or unsupported, and they shop accordingly. Conversely, stores staffed by engaged employees see higher repeat business, better conversion rates, and greater upsell opportunities.
So, what matters most to employees? According to McKinsey, there are three main drivers: career development, supportive managers, and an inclusive, empowering culture. Technology also plays a key role, as nearly half of frontline retail workers want better tools and automation to improve their workflow and efficiency.
From employee to customer to cash flow
The logic behind these results is simple but powerful. When employees are engaged, they perform better. They greet customers more warmly, resolve issues more effectively, and represent the brand with greater pride. Customers respond in kind, with better satisfaction scores, greater loyalty, and increased spending. That, in turn, boosts store-level profitability and creates room for reinvestment in staff, completing a virtuous cycle that fuels long-term growth. Basically, when you invest in the person behind the counter, you invest in every interaction they have.
Retailers who miss this connection lose more than just employees they lose sales. When frontline workers feel burned out, unheard, or trapped in a dead-end role, the disengagement ripples across the customer experience and the brand’s reputation.
Which begs the question: how can retailers translate these insights into action? Fortunately, there is a growing suite of tools and best practices available to improve employee engagement and reduce turnover in the sector.
Best practices for improving employee engagement in retail
While investing in employee experience may seem intangible, the steps to do so are increasingly clear and actionable. Here are some of the most effective strategies retail leaders can implement today:
1. Redesign roles to maximise purpose and impact
Retail is full of repetitive, transactional tasks, but not every team member needs to do all of them. Leading retailers are redesigning roles to help employees focus on higher-impact, purpose-led responsibilities that elevate the customer experience. For example, instead of having your most experienced staff members stuck with stock takes or shelf restocking, they can be deployed to customer-facing roles where their insight, product knowledge, and interpersonal skills create real value. This is where contingent staffing becomes a strategic asset.
By partnering with a trusted staffing provider like BLU, retailers can deploy trained contingent workers into operational and fulfilment roles. This frees up core staff to focus on value-adding activities such as upselling, customer experience, team mentoring, or store presentation, all areas that directly influence sales and brand perception.
2. Use technology to support (not surveil)
Retail workers don’t want to be micromanaged by apps; they want technology that makes their jobs easier. POS systems that auto-suggest upsells, shift scheduling platforms that give more control over hours, or real-time inventory tools that prevent frustration on the floor all enhance the employee experience. It’s about removing friction, not adding oversight. Digitally enabling your workforce signals trust and gives them the tools to succeed, which can directly boost morale, autonomy, and engagement.
3. Invest in career progression, not just onboarding
Many retail employers focus heavily on induction and initial training but stop short of long-term development. This sends a subtle message that progression isn’t on the table. The most effective EX strategies put learning and development at the centre, offering clear pathways to new roles, skills acquisition, or even store management. Career growth is a powerful retention lever, especially in an industry where entry-level roles often serve as the first step into the workforce.
4. Empower managers as people leaders
Managers set the tone for engagement, yet too often, store managers are promoted for operational capability rather than people skills. Retailers should equip managers with leadership training, emotional intelligence tools, and performance coaching skills so they can build high-trust, high-performing teams. When employees feel recognised, respected, and heard by their managers, they’re more likely to stay and thrive.
5. Support well-being and flexibility
The high pace and physical demands of retail can take a toll, particularly in peak seasons. Offering greater schedule flexibility, rotating duties to avoid burnout, and investing in wellbeing initiatives can make a big difference. Some employers are even building ‘quiet zones’ in back-of-house areas, providing access to mental health support, or piloting four-day workweeks during slower seasons. These investments show employees they’re more than just labour — they’re human beings whose well-being matters.
6. Use contingent staffing to boost agility and engagement
Workforce agility is key in retail, where foot traffic can fluctuate dramatically between seasons, promotions, and locations. Yet hiring full-time staff for short-term surges is rarely cost-effective and often leads to overburdened teams and poor customer service when under-resourced.
This is where a contingent workforce strategy can have a huge impact. By working with BLU, a specialist in contingent retail and distribution staffing, retailers can access trained and vetted professionals on-demand. This ensures that stores are always staffed appropriately without exhausting core employees or compromising service quality.
Contingent team members can fill gaps, support peak periods, or take on specific duties like merchandising, warehousing, and queue management, giving permanent staff the bandwidth to focus on what they do best. It’s a smarter, more flexible way to run a retail operation and a proven tactic in improving both EX and CX.
7. Listen (and act) on employee feedback
Collecting feedback is only useful if it’s followed by action. Tools like pulse surveys, one-on-ones, or anonymous suggestion boxes can surface valuable insights, but the real power lies in demonstrating that input leads to change. When employees see their concerns addressed — whether it’s about shift patterns, equipment, or recognition — it builds trust and loyalty. And when they don’t? Engagement drops fast.
Over to you
Retailers often talk about “being customer-first,” but to get there, you have to be employee-first. When you design a workplace that supports, develops, and values your people (and gives them the flexibility to focus on what they do best) your customers, your staff, and your business all benefit.
From deploying technology that enhances daily work, to partnering with contingent workforce specialists like BLU to ensure teams are empowered, supported, and properly resourced, the future of retail success is rooted in experience not just for customers, but for every person behind the counter.