Thursday, October 8, 2015

Does Online Learning Work in Retail?

FISHER Marshall, GALLINO Santiago, NETESSINE Serguei
Read the working paper
INSEAD Working Paper 2015/76/TOM/ACGRE

A retail customer seeking to buy a product often needs to decide which of several versions of a product type best meets her needs. A knowledgeable retail sales associate (SA) can explain the features of the available product variants and give the customer sufficient confidence in her choice that she becomes willing to purchase. It is thus plausible that increasing SA knowledge will increase sales. Given that training is not costless, an important question is whether training increases SA productivity, and if so, whether the increase is enough to justify the cost of training. To answer these questions, we partnered with Experticity, a firm that provides online training modules for retail SAs, and Dillard’s, a leading department store chain whose more than 50,000 SAs had access to the Experticity modules. We assembled a data set of the training history and sales productivity of Dillard’s associates over a two-year period. We found that as SAs engaged in training over time, their sales rate increased by 1.8 percent for every module taken. We also found that willingness to engage in voluntary training was an indicator of raw talent; those SA who engaged in training were 20 percent more productive prior to any training, and 46 percent more productive after training, than those who took no training. Surprisingly, brand-specific training does not significantly affect sales of the focal brand but instead improves overall sales of all brands. Our evidence of successful online learning is also of general interest given that, to date, analysis of massive open online courses (MOOCs) has shown poor engagement by participants and questionable outcomes.