News

Study: 'Racioethnic consistency' between retail employees, customers boosts profit

February 28, 2012

According to a new study from Temple University, retailers can significantly increase their revenue and profitability by better mirroring the "racioethnic representation" between their employees and their customers.

The researchers took data from 739 outlets of a U.S. department store, and according to a press release, found that "representativeness improved customer satisfaction and increased annual productivity by $625 per employee. Given the study's average sample size of 150 employees per store, such a change amounts to about $94,000 per store, or a total of more than $69 million company-wide."

"Our results support the commonly proposed notion that more closely mirroring the racioethnic composition of an organization's consumer market makes sound business sense," states the study, led by Derek R. Avery, an expert in workplace diversity and discrimination at Temple University's Fox School of Business. "It appears that this type of employee-customer similarity holds promise for helping companies meet the needs of their clientele, resulting in greater customer satisfaction and higher organizational productivity."

According to the researchers, racioethnic matching of employees and customers is both symbolic and functional: symbolic in that it "conveys that the company does not discriminate in its hiring and provides a clue to customers that store personnel are apt to provide equitable service;" functional in that minority customers "seem to be more aware of matching cues when selecting a store to patronize."

The full report, "Is There Method to Madness? Examining How Racioethnic Matching Influences Retail Store Productivity," can be read here.