The Weekly Archive: The Future Promise Of Ecommerce Jobs

ARC ^ | July 9, 2017 | Dan Rowinski, Editor-in-Chief

[2ndDivisionVet]

The potential energy of ecommerce has yet to be fully unlocked.

Retail jobs are hemorrhaging throughout the United States. Credit Suisse predicts that 8,000 retail stores will close in 2017. Radioshack is closing 1,430 stores, Payless Shoes is closing 800 stores and Sears is closing 265 stores.

According to the U.S. Census reported by The New York Times, department stores have lost 448,000 jobs in the last 15 years, offset by a net gain of 645,000 net jobs in the retail sector in that time, due to natural economic growth. Warehouse clubs (which presumably includes Wal-Mart as well its Sam’s Club division) have gained 841,000 jobs in that time.

Ecommerce in that time has created 178,000 net jobs, which is not nearly enough to offset the attrition faced by department stores. But ecommerce sites, like any digital property, get more bangs for their bucks from employees.

The Bureau of Labor Statistics estimates that 8.4% of all retail sales is done through ecommerce in the U.S. This number is fungible depending on retail sector and time or year. Other estimates put the total share of retail sales done through ecommerce between 12% and 20% depending on time of year (ecommerce has spiked during the holiday season in recent years, for instance).

The demographics of retail jobs are changing too. The Labor department estimates that 23% of retail jobs are in small metro or rural areas (under 250,000 people). Only 13% of ecommerce jobs are in those same areas. Ecommerce jobs are clustered around medium-sized metro areas (250,000 to 1 million) and large cities.

Ecommerce has definitely put the squeeze on the margins of the broader retail industry. The breaking point has come as ecommerce rates of retail have grown into the teen percentages in certain quarters, leaving little profit or growth for brick and mortar businesses treading water in a changing economy. The closed stores and job losses are a product of the transition period that the entire human race is facing as the information age comes of age. Those jobs are not coming back.

At the same time, the potential energy of ecommerce has yet to be fully unlocked. Especially from a jobs standpoint.

Amazon may take up most of the air in the ecommerce ecosystem, but there is room for other companies to grow. According to the Labor department, three-fourths of ecommerce firms employ four or fewer people. Of the companies that grow, they will create a more competitive landscape that will require more workers. These are not going to be traditional retail jobs like cashiers or sales floor associates. The jobs will come more into the realms of software development, marketing and advertising, fulfillment and delivery, human resources. Ecommerce will need more content creators and copyeditors, warehouse employees and the logistics to handle the growth.

The vaunted efficiency of digital commerce will decline as competition increases, but that is the consequence of growth. As ecommerce grows to 20% and more of total retail sales, more full time good jobs will become available at both the high and low ends of the education ladder.

Amazon is the best example of what the maturation of a late-stage ecommerce company looks like. It is adding thousands of employees in warehouses across the country while also increasing its developer, marketing and advertising headcount (and this is just in the ecommerce business, not all of the other categories it plays in). The real estate that Amazon will acquire in its Whole Foods transaction will see workers displaced from the front of the store to the back of the store while more digital infrastructure (through the form of Amazon Web Services) comes to support the operation.

This is how the retail world will change in the coming years. It is a microcosm of how every other business in the macro economic ecosystem will change as well as business becomes more efficient through software and machine learning. Education and worker training programs will need to rapidly change to navigate the transition period.

[tbw2]

eCommerce is driven in part by convenience, having things delivered to your home instead of having to go out shopping.
I expect it to grow as more people are home-bound due to age related physical limitations. Who needs meals on wheels when you can order anything from groceries to chef kits from Amazon?

[2ndDivisionVet]

Both of us are disabled. We talked to Meals On Wheels and they hinted around that we were too young.