Bloomingdales - Retailing Essay Example

All 1,500 sales personnel at Bloomingdale’s flagship store in Manhattan will receive commissions rather than straight hourly pay in about a year, as a result of a new five-year agreement between the retailer and Local 3 of the Retail, Wholesale and Department Store Union, A - Bloomingdales introduction. F. L. -C. I. O. Like many salespeople who earn commissions, the employees will receive a ”draw,” which is technically an advance on commission earnings.

The change, which Bloomingdale’s said yesterday was part of a program to improve customer service by giving its sales staff greater incentive, will make the store the first in the New York metropolitan area to have its entire sales staff on commissions. ”It offers all salespeople the opportunity to earn significantly more money than they currently receive based on their abilities and productivity,” Bloomingdale’s said. The store added that it would offer training programs for the sales staff. Pressed by Union Ida Torres, secretary-treasurer of the union, said: ”We’re happy because motivational selling represents an opportunity.

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In Bloomingdale’s men’s accessory department, where commission selling was installed last December, sales are up 22 percent and our members’ take-home pay has grown. ‘ The union has been campaigning for commissions since 1974, when it negotiated them for salespeople in the store’s women’s designer area, Mrs. Torres said. At contract talks in 1985 and 1988 the union and Bloomingdale’s agreed to raise commissions in certain departments to 2 percent of sales from one-half of 1 percent or 1 percent, she said. But as more salespeople began to receive commissions, some ground rules had to be established.

”It sometimes seemed to lead to a sea of sharks, with sales clerks fighting with one another,” Mrs. Torres said. She added: ”Because of our trepidation at what might happen, we began holding classes to properly psyche the people on a combination of motivation and common courtesy. And we had to establish floor rules on how and who should approach the customer. ” At present, all of Bloomingdale’s sales personnel, whether on a commission or an hourly rate, receive a base pay. Under the new contract, those who sell above their draw will receive additional commissions.

If, however, a saleswoman’s or a salesman’s commissions do not reach the draw level, the deficit is carried on the books until it is made up. If the deficit is not wiped out over a period of time, the employee’s performance is reviewed for possible reassignment or termination. The basic salary or draw is estimated in the retail trade at $10,000 to $20,000 a year. In addition to the switch to commissions for all salespeople, the new contract provides for an $88-a-week increase in the draw, or salary, over the five-year duration for all salespeople and the store’s other 2,500 clerical, stock and sales support employees.

About 10 percent of the store’s sales personnel are currently on a commission basis. Commissions Vary Some salespeople in Bloomingdale’s 59th street store receive commissions as low as one-half of 1 percent of sales while others get commissions ranging from 4. 5 percent on low-price but high-volume items to 10 percent on women’s and men’s shoes. All current sales personnel, as well as those not in sales, will receive the yearly increases, although people hired after the contract goes into effect will get salaries ”commensurate with the market,” said Margaret Hofbeck, Bloomingdale’s senior vice president for personnel and labor relations.

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