As we have reported on in the past, the automation of the workforce will continue, and probably at an accelerating pace starting in 2017 and continuing until the mid 2020s. Numerous studies show that retail jobs could be the next to go. In fact it is estimated that a higher proportion of retail jobs could be automated than manufacturing positions, with as many as 7.5 million jobs at risk per the Cornerstone Capital Group. Now that is a big number!
There will not be one straight-forward, clear way in which automation will replace all of those retail jobs. The reality is that it will probably be many different positions that are impacted in many different ways. Just a few examples of how millions of retail jobs could be made obsolete include the following.
- More automatic check-out scanners can be installed in stores, thereby eliminating hundreds of thousands of cashier jobs.
- Waiters and waitresses that are no longer needed to take orders as tablets or other devices are used, and this is already happening in 2017.
- Retail floor sales jobs could be impacted as stores drive more shoppers to either apps or online sites to get their questions answered.
- Robots or other technology can reduce the number of retail workers needed to stock shelves.
- There is also constant impact to back-office jobs, some of which are retail focused. For example less people are needed to take inventory due to better IT systems, etc.
Amazon uses automation
Those are just a few examples of how automation may impact retail jobs. That list doesn’t even include the maybe biggest possible change, which is of course Amazon. Now while Amazon may be creating jobs (most of which are in their distribution centers) at the same time they are putting more stores out of business. That of course will cause hundreds of thousands of more people to lose their jobs.
Amazon uses robots and various process to automate their distribution centers. So this means that for every job they displace in a store, the need for staff at the Amazon centers will not be enough to offset those retail loses. So the bigger this e-commerce company gets, the more hardship it creates for American workers.
There was a study done that indicates Amazon needs half of the workforce to sell items as compared to a store such as Macy’s. So that means if Macy’s needed 100 workers in one of their stores, Amazon could sell the same amount merchandise with a mere 50 workers. So the automation they use is twice as productive…that is a bad omen for the workforce.
In addition, Amazon has also expanded to other product categories. They are starting to get heavy into the grocery business in 2017, and it is also expected they may start to sell some medical items including prescriptions. Both of those steps will of course impact retail jobs at drug as well as grocery stores.
Increasing wages lead to more automated retail stores
It is somewhat ironic in that another reason for automation to replace retail jobs is that the minimum wage is increasing in many cities and/or states. So stores, which operate as “for-profit”, need to watch their bottom lines to try to control costs.
Now with minimum wages going up it is becoming much more cost effective for a retailer to invest in more automation for their stores. for example, if cashiers get paid more money, then it makes more sense for a retailer to just invest in an automated scanner to replace said cashiers. As that investment, while coming with an up-front cost, will save the store expenses over time; increased wages for workers is strongly correlated to more lay-offs and automation.
As we always say, prepare now for the inevitable changes. If you work in the retail industry, or may at some time, gain new skills. Learn how to benefit from these future changes instead of being a “victim”/lay off from them.