Labor shortage in the wake of Covid

January 12, 2022

While the latest “model” of the virus still feeds passionate debates about masks and vaccines, many brands are starting to promote their products at retail stores again. ​The companies, interested in re-starting their demo of product campaigns, find that the brand ambassadors they used to depend upon are no longer available. The lock downs and public health directives decimated the market infrastructure as people were forced into relocating and taking on a different career path. Of course the brand ambassadors' scarcity is only a small part of the overall labor shortage experienced by most retailers across the country, but my exposure is primarily to in-store demo management. There are multiple approaches to managing labor scarcity:

  1. Abstinence - “we can survive without having demos”. I am sure you can, but it is very hard to acquire new customers without helping them experience new products. “Sample and Buy” is much less expensive than “Buy and Return”.
  2. Reset the compensation - judging by “wanted” ads on multiple job boards, most national agencies are still offering before-Covid rates and I am not sure how many takers they get or what is their quality. Number of demos is down visually from the past even at local Costco stores, even though their brand ambassador’s standards are not very high.
  3. Optimize process management to increase “real” wages - brand ambassadors are paid hourly rates only for the time they engage shoppers in stores, plus travel expenses (not always). While the better ones are offered up to $25 per hour, their “real” earnings depend on:

  1. How many gigs are they offered per month
  2. How long does it take to get there
  3. How much time do they need to invest in product training
  4. How long does it take to schedule a demo in a store
  5. How long does it take to verify product inventory before the demo
  6. How many demos get cancelled, some on arrival
  7. How long does it take to report post demo
  8. How long does it take to get paid.

Most high quality brand ambassadors are self-employed, and while $25 per hour for 40 hours a week sounds like a reasonable income, 5 - 7 store sampling events per week at 4 (paid) hours per demo, with 1.5 hours per demo of unpaid overhead, is all they can expect most of the time. That is the difference of $1,600 per month, or the "real" rate of $18 per hour part-time with no benefits. The point is you don’t need to bust your marketing budget to attract brand ambassadors capable of producing a healthy E2P (Experience to Purchase) conversion ratio. Playing it smart generates above average returns on your marketing investment. Let's discuss how to revive your store experience and brand activation strategies in the wake of a pandemic.