A new study purports that 6 to 7.5 million retail jobs likely will be automated out of existence in the coming years, leaving a large portion of the retail workforce at risk of becoming “stranded workers.” Retail cashiers are at highest risk for automation technologies, and women hold 73 percent of these positions.
Some 16 million Americans are employed in retail, which represents 10 percent of the nation’s working population and generates six percent of U.S. gross domestic product. A lack of disclosure on key labor metrics by retailers puts investors in the dark on how these companies are responding and what the fate of their workers could be.
According to Cornerstone Capital Group’s report, Retail Automation: Stranded Workers? Opportunities and Risks for Labor and Automation, which examines current and potential automation initiatives across 30 retail companies, in some cases, the technology is complementing labor by freeing workers from mundane tasks and facilitating a more personalized customer experience. In others, technology has the potential to automate a significant part of the sales process and render a range of jobs redundant. Taken together, store closures and technology have the potential to dramatically alter the employment landscape in America.
Erika Karp, Cornerstone founder and chief executive officer, notes: “The retail landscape is changing rapidly and investors need to understand the social and governance issues impacting valuations for public companies in this sector.” She further states, “Retailers are facing a perfect storm: they need to balance demand for wage increases with the negative optics of future job losses. The winners in retail will be companies that provide recruitment, retention and training for workers and innovate with forward-thinking future store strategies.”
Some of the report’s findings include:
Some 36 percent of retail workers currently receive some form of public assistance and the average retail worker is age 38. Contrary to perceptions, 71 percent of retail workers are full-time employees.
Of the 30 companies analyzed in this report, most are considering the use of in-store technology such as mobile devices, self-checkout, digital kiosks and proximity beacons. In addition, sensor-based checkouts and smart shelves are a growing technology, as found in Amazon Go stores.
The report indicates that WalMart and other large retailers have greater market share in communities with less than 500,000 people. If employment trends correlate to market share location, retail automation by retailers could disproportionately impact these smaller communities.