Five years ago, Brooklyn resident Brenda Moses was earning about $35,000 a year working as a sales clerk at Bloomingdale’s flagship store in New York City. These days, Moses is taking home about $28,000 a year, a 20 percent pay cut that the 29-year veteran of the upscale retailer attributes to the rapid rise in consumers purchasing online.
As more consumers buy online, Moses and other retail workers who rely on commissions are having a tough time making ends meet. For the 2,000 workers at Bloomingdale’s flagship store and corporate headquarters in New York, the issue is front and center in an unprecedented labor dispute.
“We are arguing for a first — this would be the very first union contract” giving retail workers a percentage of online sales, Chelsea Connor, a spokesperson for the Retail, Wholesale and Department Store Union (RWDSU) told CBS MoneyWatch.
“They’ll come into stores, and we’ll help them for hours, and then they go home and buy,” said Moses. “We’re spending a lot of time on the phone and on the floor, and not making what we used to make.”
Stephanie Luce, a professor of labor studies at the City University of New York, said she’s not aware of other cases where in-store workers get commission on online sales. But it makes sense to include online sales in employees’ overall compensation as retailers integrate their online and in-store sales approaches.
“After all, a Bloomingdale’s store employee may spend considerable time and effort helping customers select items, only to lose their commission when the customer leaves to buy the product on their phone or laptop,” Luce said. “In some cases, retail employees are even trained to help customers make that online purchase.”
The overwhelming majority of the Bloomingdale’s union workers earn only commissions, which has been the case since a contract negotiated in 1989, said Connor. The RWDSU, which has represented the Bloomingdale’s workers for 80 years, or since 1937, is negotiating a new contract to replace one set to expire May 1.
The issues involved include not only less traffic in brick-and-mortar stores but also when clerks spend time catering to customers in person and on the phone only to lose the sale and commission to the internet. Customers also make purchases online, then bring the merchandise into a Bloomingdale’s store to return it, helped by clerks with no hope of a commission.
Clerks also find in-store purchases a harder sale when Bloomingdale’s offers discounts for some internet items, Moses said. “Online sales offer what we don’t have. Customers want to look at products and see the colors. They tell us, ‘now I’m going to have coffee and sit on my bed’” to make purchases online.
Customers seek out Bloomingdale’s in-store expertise, trying on clothes and checking out merchandise first-hand, asking for help from the store’s staff before returning home to their computer and online sales.
“We give the best service and knowledge that we have, about the size, color and fit, and they want to know how it looks. And then for them to say, ‘thank you for your service, but I’m going to buy online,’ it’s a heartbreaker,” said Betty Lloyd, a Queens resident who has worked at Bloomingdale’s 37 years. Like Moses, she’s making at least 20 percent less than she did five years ago.
Studies show that even with the increase of online shopping, customers like to visit stores — and well-trained sales workers make a big difference in customer satisfaction, said CUNY’s Luce. “Retail workers at Bloomingdale’s likely provide a good deal of value to the company for their service and should be compensated fairly.”
Spokespeople for the retailer did not return requests for comment.
Bloomingdale’s has 55 stores overall, according to a regulatory filing by parent company Macy’s. And unlike locations under the Macy’s brand, the count of Bloomingdale’s stores has risen in recent years, up from 50 locations in 2014. Bloomindale’s will open stores in 2019 in Norwalk, Connecticut, and San Jose, California. Conversely, the number of Macy’s locations has gone from 773 in 2014 to 673 in 2016.
Source: CBS News MoneyWatch