Raw data on retail employment produces some interesting facts that may help explain why jobs are being lost and at the same time ease unemployment concerns.
Much has been made of the 80,000 job losses in US retail since February but that is on the back of an industry that employs more than 15m people. Store closures and reduced retail demand have brought shop floor staff reductions although back room retail employment is on the rise. The growth in new retail services, particularly those related to online has created employment opportunities in a range of new retail services.
Number crunchers have a significant impact in all industries and when you examine the statistics in retail sector employment you can see why staff numbers are under review. According to the Institute of International Finance, it takes less than one employee for every $1m annual sales to operate an online store, around 3 employees for a big box retailer, and around 8 for a traditional department store. Number crunchers gave been waving red flags about those proportions and during a time of declining retail sales, retailers have been reacting. Of course number crunching can ignore the importance of personal attention to customers. As the number of pure-play online retailers opening bricks’n’mortar stores continues to rise, we must assume that the dust hasn’t settled on this equation.
Finally, in an overall sense, there is evidence that employment gains from the growth of e-commerce outweigh the losses in traditional retail stores although like many industry transitions there are consequences for experienced floor walkers having to transition to the new skill set required for e-commerce. And of course market traders need to go through a similar shift in skills if they wish to continue in our industry and meet new consumer demands for retail services. The only thing that stays constant is change itself.