Gap Inc. stunned retail watchers and the general public alike last week by announcing a salary hike for employees across their five store chains. By 2015, the minimum hourly wage for all sales associates will be $10.
The federal minimum wage, by comparison, remains $7.25.
The parent company of the Gap, Banana Republic, Old Navy, Piperlime and Athleta acted voluntarily, ahead of a proposed Congressional bill endorsed by President Obama that’d see minimum wage boosted to $10.10 by 2016.
For now, Gap is ahead of the pack — but its move puts pressure on high-profile retailers like Walmart, who appeared to be mulling a wage increase of their own in the days following the San Francisco clothier’s announcement but later denied those reports.
Walmart isn’t exactly a direct Gap Inc. competitor (although it arguably competes in every segment, including fashion, to a degree).
More importantly, Gap Inc. isn’t competing with Walmart for sales staff. They’re competing with the likes of Lululemon, where ‘educators’, or sales associates, are paid upwards of $11 an houraccording to independent salary review site Glassdoor.
A glance at the careers site of fledgling workout gear chain Athleta, Gap Inc.’s answer to Lululemon, goes part of the way to show why a $10 wage hike is far from being purely altruistic on the company’s part.
For a sales associate gig, “some college education” is preferred and a “fitness connection” is mandatory.
Applicants must understand a “holistic mindset” and act as a “trusted friend and advisor” while also understanding the e-commerce “back-end” and being able to help a shopper find an online substitution for an out-of-stock item.
The role is about as far from simply folding shirts as one can get in the brick and mortar apparel world. Athleta wants tech-savvy yogis, and they’ll have to pay to attract these staffers.
Art Peck, Gap Inc.’s head of growth, innovation and digital summed up the reasoning behind the chain’s wage hike best in a video released to accompany the announcement.
“It’s the right thing to do, and frankly it also acknowledges the fact that the work we’re asking our sales associates to do is changing,” he said.
At Athleta and across all brands under the Gap Inc. umbrella, sales associates are responsible for, as the company puts it, “building the bridge between our in-store and digital shopping experience.”
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Since December, workers at Gap and Banana Republic have been rolling out the retailer’s new Reserve In Store program, allowing shoppers to find an item online, reserve it with a click and pick it up at a local branch within an hour.
“It’s complicated and it’s in real-time,” said Roy Hunt, Banana Republic’s head of stores and operations, of the sales associates’ role in taking this transaction from the computer screen to the local mall.
“It’s one more thing the stores are taking on.”
Hunt added that the Reserve In Store system has had the added consequence of helping sales associates become personal shoppers.
“It allows them to understand what the customer is looking for beforehand,” he said.
In other words, if a staffer already knows a shopper is on the way to the store to pick up a pair of pink jeans, what’s stopping him or her from offering up a scarf in a similar color scheme?
Gap Inc. spokespeople wouldn’t be drawn on whether their sales teams were being trained to understand and operate nascent shopper-tracking technologies, from relatively simple people counters to Apple’s iBeacon and its ilk.
Much of the latest micro-location software on show at January’s National Retail Federation convention, the industry’s bellwether, included applications designed for use by sales associates on the shop floor.
What Gap Inc. will say is that their competitors are already talking about their $10 wage hike news, including at the storefront level, where it could make a huge difference in terms of recruitment.
“We’re hearing it from other retailers in the mall,” said Hunt. “It indicates that we believe so deeply in our people.”
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