If everything worked as expected do the following to complete the setup.
Add Gamepad Configurations to RetroArch emulator
The RetroArch emulator will be the base emulator for most of the consoles you wish to emulate... so we need to configure the gampads.
Open the file ~/RetroPie/configs/all/retroarch.cfg.
Find the "#### Input" section and add the following:
input_player1_a_btn = 1
input_player1_b_btn = 2
input_player1_start_btn = 9
input_player1_select_btn = 8
input_player2_a_btn = 1
input_player2_b_btn = 2
input_player2_start_btn = 9
input_player2_select_btn = 8
input_player1_left_axis = -0
input_player1_right_axis = +0
input_player1_up_axis = -1
input_player1_down_axis = +1
input_player2_left_axis = -0
input_player2_right_axis = +0
input_player2_up_axis = -1
input_player2_down_axis = +1