Retail Trade

March 4, 2011
Retail jobs are disappearing as shoppers adjust to self-service

Automation — long a force in agriculture and manufacturing — is accelerating in the retail sector, a trend that could hamper efforts to bring down the nation's stubbornly high jobless rate.

The new employment report is out and the first thing my eye went to was the drop in retail trade. It has really been struggling in recent years.

The following chart shows retail trade employment per capita. The retail trade employment bubble is over and there's no going back.



The following chart shows retail trade employment as a fraction of nonfarm payrolls. Roughly 1 job out of every 9 jobs is located in this industry and the trend just isn't looking good for workers here.



BLS: Retail Trade (2009)

1. Retail Salespersons: 3,891,310
2. Cashiers: 2,828,730
3. Stock Clerks and Order Fillers: 1,303,730

BLS: Retail Salespersons

Despite the growing popularity of electronic commerce, the impact of online shopping on the employment of retail salespersons is expected to be minimal. Internet sales have not decreased the need for retail salespersons.

I strongly disagree. The following chart shows the exponential growth in nonstore retail sales per capita and is adjusted for inflation. It is growing at 5.1% per year in real terms and it is back on trend. I have never spoken to a retail salesperson when making an online purchase.



BLS: Cashiers

Continued growth in retail sales is expected, but the rising popularity of purchasing goods online will limit the employment growth of cashiers, although many customers still prefer the traditional method of purchasing goods at stores. Also, the growing use of self-service checkout systems in retail trade, especially at grocery stores, should have an adverse effect on employment of cashiers. These self-checkout systems may outnumber checkouts with cashiers in the future in many establishments. The impact on job growth for cashiers will largely depend on the public's acceptance of this self-service technology.

I strongly agree. It would seem the same person did not write both outlooks.

BLS: Stock Clerks and Order Fillers

Job openings in grocery, general merchandise, clothing, and department stores will be greater than in other industries, because much of the work is done manually and is difficult to automate.

Innovation starts as a trickle and progress never ends. Just because something is difficult to automate now does not mean that it will always be difficult to automate. In fact, it is already starting to happen.



Minimization of manpower requirements
Lowering expenses for stocking of shelves

Robotic Nation by Marshall Brain

The problem is that these systems will also eliminate jobs in massive numbers. In fact, we are about to see a seismic shift in the American workforce. As a nation, we have no way to understand or handle the level of unemployment that we will see in our economy over the next several decades.

These kiosks and self-service systems are the beginning of the robotic revolution. When most people think about robots, they think about independent, autonomous, talking robots like the ones we see in science fiction films. C-3PO and R2-D2 are powerful robotic images that have been around for decades. Robots like these will come into our lives much more quickly than we imagine -- self-service checkout systems are the first primitive signs of the trend.

As a former lead software engineer, I believe it. We haven't seen anything yet. In a perfect world, this would create a huge improvement in our standard of living. Too bad we don't live in a perfect world. We live in this one.

Source Data:
St. Louis Fed: All Employees: Retail Trade
St. Louis Fed: Total Nonfarm Payrolls: All Employees
Monthly & Annual Retail Trade
St. Louis Fed: Population
St. Louis Fed: CPI-U