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Where Have All the Shop Clerks Gone?

19 April 2017

From Strategy+Business:

We often talk about software and robots taking over jobs and eliminating the need for human labor. It’s common to hear these concerns center around jobs in factories, or in the trucking and taxi industries. Some of these changes may be far in the distance, or may not come about at all due to social and cultural resistance (and the fact that sometimes sci-fi-tinged ideas just don’t come to fruition). In fact, there are lots of jobs open in areas that you would think would be negatively affected by automation. For example, 364,000 manufacturing jobs were open in the U.S.  at the end of February 2017, up 58,000, or 18.9 percent, from a year earlier.

But the reality is that machines — in the form of software, e-commerce platforms, and payment systems — are already destroying jobs in one massive sector: retail.

Retail sales are rising in the United States — up 5.3 percent in February 2017 from the year before. And overall, the U.S. labor market is in very good shape, with unemployment at 4.5 percent and 78 straight months of job growth. The monthly JOLTS report shows there were an impressive 5.74 million jobs open in the U.S. at the end of February.

. . . .

However, the job market in the retail sector is behaving as it would only in times of recession, when retail sales are falling, or when the labor market is weak. In March, when the economy at large added 98,000 payroll jobs, the vast retail trade sector lost 29,000 positions. In February, 30,900 retail jobs were cut. In fact, retail employment is off in four of the past six months, and the sector employed fewer people in March 2017 than in it did in August 2016. According to the JOLTS report, the number of open jobs in retail has fallen significantly over the past year, from 612,000 in February 2016 to 542,000 in February 2017 — a decline of 70,000, or 11 percent.

What’s going on here? In a word, technology. But not in the way you’d think. Algorithms are not yet replacing salesclerks at the mall, and software is not stocking shelves in grocery stores. What is happening is that technology-enabled retail platforms, recommendation engines, and payment systems continue to grow and improve. And as they do, they are making it more convenient and more compelling for more people to do more of their shopping online. Non-store retail sales, which is mostly e-commerce, were up nearly 13 percent in February from the year before. In short, technology and automation are pushing a great chunk of retail sales through channels that are not physical stores. It still requires plenty of human work to fulfill all the orders. But the jobs will increasingly be in warehouses, in logistics and delivery — not in strip malls.

Link to the rest at Strategy+Business

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Bookstores, Disruptive Innovation

18 Comments to “Where Have All the Shop Clerks Gone?”

  1. There is a push to online in addition to the pull mentioned in the OP. Many retail jobs are low-paying, limited hours, no benefits, and not much training is provided. As a result there are many retail clerks who don’t know the store stock, don’t know how to work the till, and have poor retail social skills. Shopping in some stores can be an aggravating or unpleasant experience. When people no longer have to shop there, they won’t.

    • And don’t forget:

      ‘Do you want the extended warranty?’
      ‘Are you sure you don’t want the extended warranty?’
      ‘Are you really sure you don’t want the extended warranty?’
      ‘I can give you the extended warranty for half price, today only.’

      (etc)

      When I bought my iPad, I almost walked out of the store because they were so determined not to sell it to me without the extended warranty that I didn’t want.

      • I knew Circuit City was in trouble when they started pushing customers to get warranties on DVDs. In those days a new release movie debuted on Tuesdays for $9.99, and I could not believe the salesman was serious about a warranty. At one point I asked why that was even a thing. What were people doing with their DVDs? And why couldn’t they just wait for the movie to appear in the dollar bin if they broke it somehow?

  2. And of course raising the minimum wage doesn’t cause stores to cut staff either.

    Actually this might be a good thing, no more sales drone(s) following me around ‘worse buy’ trying to point out their more overpriced junk at me.

    Who am I kidding? I will have to be very desperate for something to willingly walk into one of their stores, much easier to look through Amazon’s offerings …

    As for other places, the clerks do listen to you anyway, I can’t count the number of times Sonic has gotten a simple order wrong (no pickles on one burger, no sauce on the other – so you get no pickles and lots of sauce on both …)

  3. When will they ever learn?

  4. At least half of Mack Reynolds’ SF ouvre talked about job loss from automation. People laughed at him. I think he gets the last laugh now.

    “Mack Reynolds… Mack Reynolds to the courtesy phone, please…”

  5. Will we never hear the end of how “great” the job market is? How “low” the unemployment rate is? Do they really think if they repeat this often enough, those 33% of people who DON’T have jobs and can’t FIND decent jobs will believe it? Do they think whatever percentage of people who have only part-time jobs or minimum-wage (or not much better than that) jobs will suddenly jump up and say, “All is well with the world now! How come I didn’t see it all along?”

    Geeze. When are these talking heads going to look around and see WHY retail is “acting like” we’re in a recession. Um… maybe because for a large proportion of workers, we are?

  6. We are falling into a glut of creative destruction and retail is the victim of the month. Lest anyone be confused, the number of warehouse and logistics jobs gained are not likely to be anywhere near of the number of retail jobs lost. Why can I say this with certainty? Because an equivalency implies B&M retail would compete effectively with online retail. You get cheaper, better service online because it does not require as many expensive bodies.

    No one is seriously thinking about how society will reshape in response to the devaluation of human input. Some people think they are safe on the side of the angels. Others look for scapegoats like those shiftless and lazy immigrants who are willing to work hard for low pay.

    But no one seems to be thinking much, except when writing defeatist dystopias.

    I’m no better. I don’t have a solution.

    Time for a glass of bourbon.

    • No one is seriously thinking about how society will reshape in response to the devaluation of human input.

      I am. I’ve been wondering for years what useful things humans will still be doing in a hundred years.

      The main conclusion I’ve reached is that I haven’t devalued human work enough in the books I’ve been writing.

      • Well, I’ve had my glass of bourbon.

        Without any reason, I am convinced that humans will be as important in 2117 as they are today. I’ve worked with machine learning, enterprise management, and supply chain systems enough to expect they will do much more in the future than they do today, so it’s not that I see flaws or limitations in the machine future.

        Way back in the the sixties, computer scientists fretted over what people would do when computers were fully realized. Most of them were optimistic, but vague.

        For a long time, we said that for every job lost, two others would be created, and that held up pretty well until the 2008 recession hit. I think that rubric is in the ditch now.

        So I am left optimistic for no good reason and no vision, faith and bourbon alone, that the blot of protoplasm that came up with the machine will come up with something to cope with the machine.

  7. These articles remind me of Wired‘s famous “The Future Doesn’t Need Us.”

    We’re heading toward an Elysium future. The movie with Matt Damon.

  8. I hate it when I’m asked several times for an email address: “Would you like to hear about new products?” “Would you like to get discount coupons on your email?” “Would you like to get a coupon for your next visit?” OMG, staaaahhhp. I don’t care how good the coupons are, my in box is already overflowing.

    We go into big box stores and see about four employees in the entire store. We end up walking in circles for ages, looking for someone when we need help. I despise shopping now.

  9. > stocking shelves

    Unlike the old days, a modern store’s employees don’t do much shelf stocking.

    In some places, like “convenience” stores or the ones attached to gas stations, the entire inventory is stocked by the vendors who supply the store. A truck backs up behind the store, and the driver stocks the potato chip and candy bar racks. The soft drink truck backs in, same thing.

    Most stores do *some* of their own stocking. At Wal-Mart vendors not only come in at night to stock the shelves, they probably own the shelves as well.

    The “stockboy” is mostly gone; stores generally just stack that function across most of the low-level employees now.

  10. The first thing I thought of when I read this was those scanners that are all around at Kohl’s or Target. No longer do you need to find a sales associate to inquire about a price that you can’t figure out. Then there are self-checkout lines. It simply isn’t that hard to scan items yourself, and one employee stands by to help whichever of the 10 customers checking themselves out instead of ten cash registers running.

    Of course, if you actually need help in a store, good luck.

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