Interesting piece in NY Times on the attempt by MIT’s Zeynep Ton to change the  role of workers in retail and other industries.

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Excerpt:

Ton, however, argues that workers are not merely a cost; they can be a source of profit — a major one. A better-paid, better-trained worker, she argues, will be more eager to help customers; they’ll also be more eager to help their store sell to them. The success of Costco, Trader Joe’s, QuikTrip and Mercadona, Spain’s biggest supermarket chain, indicate, she argues, that well-paid, knowledgeable workers are not an indulgence often found in luxury boutiques with their high markups. At each of the aforementioned companies, workers are paid more than at their competitors; they are also amply staffed per shift. More employees can ask customers questions about what they want to see more of and what they don’t like, and then they are empowered to change displays or order different stock to appeal to local tastes. (In big chains, these sorts of decisions are typically made in headquarters with little or no line-staff input.) Costco pays its workers about $21 an hour; Walmart is just about $13. Yet Costco’s stock performance has thoroughly walloped Walmart’s for a decade.

Read more: http://www.nytimes.com/2014/01/05/magazine/thinking-outside-the-big-box.html?pagewanted=1&rref=magazine&hpw

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Posted by Carlos Alvarenga

Carlos Alvarenga is the Executive Director of World 50 ThinkLabs and an Adjunct Professor at the University of Maryland's Smith School of Business.

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