Power of the People

Yesterday, after reading about Bird and Sephora terminating their employees in a Zoom call, I was reminded of the time when, eleven days before Christmas in 2009, the executives at Saks Fifth Avenue pulled myself and my fellow cosmetic associates off the main floor during the busy holiday rush to inform us that we would no longer be employed by Saks after January 31st, 2010.

The General Manager at the time delivered the news so brutally, that she was advised by HR to soften her tone for the next round of employees she'd be delivering the news to.

A few of us had seen the writing on the wall months beforehand. Other stores in smaller markets had transitioned to a vendor-paid model to soften the blow of the losses being incurred by the financial crisis (which many of us in NY watched in real-time the day Bear Stearns collapsed and the selling floor was a ghost town). Management had also imposed new mandates to capture our client books digitally; resulting in clients receiving marketing e-blasts offering discounts, free shipping and gifts not being offered in the stores -- ultimately cannibalizing in-store sales and hurting the income of associates who relied on replenishment business from their out-of-state clientele in the slower retail months.

Still, the devastation had been felt that day, as scores of employees -- many of whom dedicated decades of their lives and sacrificed weekends, holidays and any semblance of a work-life balance to meet increasingly aggressive sales goals and make enough to support themselves and their families -- burst into tears and were so inconsolable that they were unable to return to the floor to complete their shifts. They were also informed of an added indignity: They would have to re-apply for their jobs under the vendors and a new model that would considerably decrease their earnings...should they be rehired.

What resulted was something that I believe Saks never fully recovered from. While many associates would go on to work for the vendors or in other departments within the store, a large number of them went on to other ventures or moved to competitive retailers. Most importantly, their remaining loyal clients decided to take their dollars elsewhere, as many confessed to living geographically closer to Bergdorf Goodman or Bloomingdales. A number of my own former clients, whom I hadn't already partnered with one of my Jo Malone vendor colleagues before my departure, also opted to shop in the standalone stores.

Saks' management had underestimated the power of the relationships that the associates had cultivated with their clients. They would spend the next decade - and millions of dollars in ambitious renovations and marketing campaigns - creating "personal" experiences to lure customers back into the stores.

But they weren't alone in this practice. Many other retailers, brands and companies who were more fixated on "getting back to black" financially, learned hard (and expensive) lessons from neglecting the people who not only bought their goods and services, but the people who stood on the front lines selling them. In the months prior to that fateful day, I'd listen as my more mature and established clients expressed concerns that stores were investing more real estate and resources into catering to a younger clientele -- one who was not as brand loyal or financially stable.

The ensuing years of relying on data and technology to create "one size fits all" campaigns may have had some varying degrees of success, but they've mainly created a tremendous void now being filled by the rise of experiential marketing, and the suddenly revolutionary concept now being featured in boardrooms and conferences, that people respond strongly to companies and messaging that - get this - cater to their needs, lifestyles and preferences.

As we search to find meaning and silver linings during these incredibly difficult times brought on by the COVID-19 pandemic, possibly the most glaring observation is that people have power. More specifically, the people often overlooked by large corporations and the government officials who bow to them, have a great deal of power when aligned and en mass. They provide essential goods and services. They save lives. They keep economies moving and thriving, and their overwhelming support...or lack thereof...can make or break a company.

What will set apart the successful businesses from the failing ones is how they ultimately treat their people in these crucial days and months that lie ahead. Real leadership will be determined and defined by how they treat their teams and clients in the moments that matter most - and how both respond as a result.

Companies no longer have the luxury of doing business as usual. It's time to start listening. And caring.

Authentically.