Retail employs one in five working South Africans, contributes 11.5% to GDP (Gross Domestic Product) and rings up over R1.1 trillion in annual sales. Yet, this crucial sector faces a leadership skills deficit that can threaten the survival of many businesses, research from the University of Johannesburg (UJ) shows.

The sector is changing so quickly, and young people are often left disillusioned in their first jobs, despite graduating from higher education retail programmes, says Dr Mariette Frazer.

Dr Frazer is a senior lecturer at the Department of Marketing Management, in the UJ College of Business and Economics (CBE).

The findings are published in the research article ‘Building a sustainable retail future: Evidence-based strategies for transforming leadership education in South Africa’, and Dr Frazer’s doctoral thesis.

“The reality is that the actual work itself is not being related to [young retail staff], or they’re just not prepared. So, it’s a huge shock to their system when they come in here,” said an HR specialist in the retail sector interviewed for the research.

South African diversity

On the shopfloor, the country’s diversity in culture and age-groups poses challenges for retail graduates.

“One of the greatest mistakes we can make is to assume that retail leadership is universal,” says Prof Magda (Lia) Hewitt. “South African retail operates within a unique social and cultural context.”

Prof Hewitt is a Professor (Emeritus) in the UJ Department of Industrial Psychology and People Management in the College of Business and Economics, where the research originated.

“One retail graduate in the research described the discomfort of being a young manager expected to supervise older employees, in a culture where age traditionally commands respect.

“Another highlighted the challenge of leading teams where some employees are digitally fluent while others have spent much of their careers working in manual systems,” she adds.

“One of the HR managers explained that opening a store in some communities requires engaging with local community or traditional leaders before business starts. These are realities in South Africa, but they receive little attention in many retail leadership programmes.”

Online shopping vs shopfloor jobs

Added to all this is a developing threat to retail jobs in brick-and-mortar shops: the very technology some of the young graduates grew up with.

E-commerce grew by 32.4% to represent 19.6% of global retail sales in 2021, accelerated by the COVID-19 pandemic.

Online and in-app shopping provide great customer experiences, as do hybrid experiences with in-store pickups. However, these create new complexities to manage.

“In my view, online will never replace the physical store. But it will substantially change the way a retailer operates,” says Dr Frazer.

“We now see businesses like Checkers Sixty60 where the online order picker shops alongside the regular shopper. This can create in-store friction. Retail leaders such as sales managers need to be able to identify pain points in this new hybrid system and solve them,” she adds.

Urgent transition for youth jobs

The retail industry responded to the leadership skills gap with its own training, says Dr Frazer.

“Retailers invest on average around R60 000 to R100 000 per graduate in training alone when onboarding new employees.”

Dr Frazer bases these numbers on her experience with corporate retail graduate and management development programmes with large retailers such as Massmart and Pick n Pay over the past 15 years.

While retailers and institutions are both attempting to fill the skills gap, they do not realise just how quickly two challenges in particular are developing, she adds. One is Artificial Intelligence (AI) technology; the other is retail graduates’ self-leadership.

“The retail workplace is already reshaped by AI-assisted service, self-checkout ecosystems, and data-driven merchandising.

“The second and more urgent challenge is self-leadership, Emotional IQ (EQ), resilience, and the ability to hold a difficult conversation across a cultural or generational divide. This takes years to build in a person. You cannot fast-track emotional maturity in leadership the way you can fast-track a retail software rollout,” she says.

Institutions need to urgently restructure retail programmes – and retailers need to work with them to make this happen, she says.

“South Africa doesn’t have the luxury of a slow transition on this,” adds Dr Frazer. “Retail is one of the largest employers of young people in this country, and it’s one of the few sectors where a graduate, or even a non-graduate, can start on the floor and rise into leadership within a few years.  That pipeline is exactly what youth unemployment needs.”

Building new graduate skills

Making the transition to better-prepared graduates is possible, say both researchers, pointing to concrete, economical changes needed in retail programmes.

“Leadership education must become far more contextual,” says Prof Hewitt. “Rather than teaching leadership as theories from somewhere else, we need to prepare graduates for the situations they are most likely to encounter.”

“Role-play, simulations and case studies allow students to practise difficult conversations before they encounter them in the workplace,” she explains.

“Students can practise giving constructive feedback to an older employee while maintaining dignity and respect. Or they can learn how to introduce new technology to colleagues with different levels of digital confidence. These experiences allow students to make mistakes in a safe environment and build confidence before the consequences become real.”

“If our curriculum prepares graduates for these realities, we will produce leaders who are not only technically competent but also culturally intelligent, adaptable and capable of leading effectively in one of the world’s most diverse business environments.

Says Dr Frazer: “A student who leaves university with strong self-leadership will figure out shopfloor etiquette in their first job quickly. A student who leaves without it, will still be struggling with it a year in.”

AI coaching

Nervous retail students can even practise their leadership skills with the infinitely patient, always-available coaches that AI makes possible now.

“An academic can now build a chatbot that plays a difficult customer and gives structured feedback on a student’s response, using free or low-cost tools,” adds Dr Frazer.

An AI chatbot would need to coach students through highly realistic scenarios: An irate customer, a stock-out at peak trade, a colleague dynamic that needs de-escalating.

“Retail partners need to be involved in chatbot scenario design, not just as a site visit at the end of a module, but as co-creators of the content from the start,” she adds.

For the thousands of new entrants into the retail industry every year, the transition cannot come fast enough.

Research article: Building a sustainable retail future: Evidence-based strategies for transforming leadership education in South Africa

PhD Thesis: A leadership pedagogy for advanced retail curriculum offerings at public higher education institutions