Automation Puts Millions of US Retail Jobs at Risk

Automation may be mission-critical to operational longevity in the retail industry, but it could be creating a significant pool of “stranded workers”.

Six million 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% of these positions, CSA reported.

That’s according to a new report, “Retail Automation: Stranded Workers? Opportunities and Risks for Labor and Automation,” conducted by Cornerstone Capital Group and commissioned by the Investor Responsibility Research Center Institute. The report identifies the structural factors catalyzing change in the retail industry.

 The report details the technologies retailers are deploying, looks at the drivers of automation, and provides a framework to analyze the automation strategies of 30 large retail companies. In some cases, 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.

 When it comes to adopting in-store technology, most of the surveyed companies are considering solutions 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.

 What many people don’t realize is that 36% of retail workers currently receive some form of public assistance, and the average retail worker is 38 years old. Contrary to perceptions, 71% of retail workers are full-time employees.

 The study also 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.

 “The retail landscape is changing rapidly and investors need to understand the social and governance issues impacting valuations for public companies in this sector,” said Erica Karp, Cornerstone founder and CEO. “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.”