June Jobs Report Shows Retail Losses, What Happened?

What’s Driving Trends in Retail Jobs?

While the country is enjoying a growing, healthy economy with low unemployment, not all jobs are safe. After an addition of 28,800 retail jobs in May, the Bureau of Labor Statistics reports that the industry lost 22,000 jobs in June, most of those in general merchandise stores.[1] This comes after a December that saw 55% fewer jobs than December 2016. December is typically the biggest hiring month for retailers. What’s the explanation for these number?

E-Commerce Growth and the Amazon Effect

E-commerce grew by 49 percent in 2017 representing 13 percent of total retail sales, according to a U.S. Commerce Department.[2] Most of the credit for this increase belongs to the undisputed, e-commerce king, Amazon.

You can order almost anything from Amazon and in some circumstances have it delivered the same day. This convenience factor is enticing, especially to younger generations that would rather interface with technology than people. Millennials have been a big reason for the spike. A study from UPS and research company ComScore found that 51 percent of all millennial retail purchases are made online.[3]

This change in lifestyle and preferences has driven the nail in the coffin of department stores. Toys R’ Us shuddered all stores earlier this year. Macy’s, a once dominant retail force, is shutting down stores. And, there are countless others in bankruptcy.

It is not necessarily because these brands did not shift their strategy sooner. Amazon saw vulnerabilities and was able to get more shoppers on their site instead of in those stores.

In-Store Technology

Most everyone is familiar with self-check-out. These kiosks offer convenience to shoppers and allow retailers to cut back on cashier positions. Another in-store technology that is emerging is automation and AI that tracks inventory needs, which could then be stocked by robots.

The job in retail of “working the floor” has, for the most part disappeared, except in high-end stores. With technology enabling retailers to work leaner at their brick-and-mortar locations, they have the opportunity to cut costs. Those cuts leave workers without a job.

Other Trends to Watch

One interesting perspective is that the majority of jobs being lost are those that can be automated. This could open up opportunities for higher-paying, more skilled jobs in retail. Another thing to watch will be the new tariffs levied on China and how those will impact jobs. The bottom line is that shoppers changed; many retailers did not, which lead to their decline or demise.

[1] https://www.bls.gov/web/empsit/ceshighlights.pdf

[2] https://census.gov/retail/index.html

[3] https://pressroom.ups.com

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