The luxury retail industry is currently facing a labor crunch, as major brands struggle to find and retain talent for high-touch frontline roles. This issue is becoming increasingly pressing as rising wages at companies like Target and Walmart tighten the labor market and force a reevaluation of staffing strategies.
According to Glassdoor data, luxury retail sales associates earn an average base pay of about $35,000 per year, plus around $10,000 in commission. However, these jobs have evolved to become more multifaceted, with customer relationships extending beyond the sales floor and into the digital realm. These sales associates are tasked with selling high-end items that could cost as much as their own yearly take-home pay.
“We feel very strongly that there is a need for salespeople again, but they need to be educated,” said Sandy Sholl, founder and executive chair of luxury goods distribution company MadaLuxe Group. Sholl emphasized the lack of focus and attention given to sales roles, which has contributed to the challenges of finding qualified and interested candidates.
Selling luxury goods requires a unique set of soft skills that goes beyond simply scanning groceries. In response to this, some job listings now call for TikTok-style video clips to assess candidates’ influencer potential. For example, a job at Gucci may require three years of luxury fashion experience and the ability to maintain an organized client book.
Glassdoor data revealed that Dolce & Gabbana sales associates earn a base pay of about $37,000, with an additional $15,000 in compensation. Similarly, Gucci’s base sales associate pay is around $46,800, including a $10,000 bonus. However, these figures fall short of the prices of the luxury items they are expected to sell, such as a gem-encrusted watch or a Teddy Bear shoulder bag.
To address the challenge of finding and retaining talent, luxury brands are exploring alternative recruitment strategies. The senior director of styling and sales at Nordstrom, Jessica Cloutier, mentioned recruiting from the real estate sector, where client relationships and commissions are essential skills. Additionally, some luxury houses like SMCP Group and LVMH have established training academies to educate and develop salespeople.
However, beyond recruitment and training, the issue of compensation remains significant in the industry. Glassdoor data showed that entry-level retail wages at Saks Fifth Avenue and Neiman Marcus were around $17 per hour, while Costco and Patagonia offered $18 and $20, respectively. Walmart and Target workers were found to make around $25,000 per year on average.
“If brands really want to retain and attract this talent and have them stay on a more long-term basis…they’re going to have to compensate more,” said Sukeena Rao, co-founder of Luminaire, a personal shopping services company, highlighting the need for increased salaries to incentivize luxury retail workers to stay in their roles.
In conclusion, the labor crunch in luxury retail is posing challenges for brands in finding and retaining talent for high-touch sales positions. The industry is responding by exploring creative recruitment strategies, investing in training academies, and considering the importance of competitive compensation. For luxury retailers to address this labor shortage effectively, it will require a combination of better training and increased wages to attract and retain skilled sales associates.