Robots, automation and artificial intelligence could replace 7 million US retail jobs within a decade, with women and low-wage workers most at risk, according to new research.
Retail is the biggest private sector employer in the world and employs 16 million American workers, or 1 in 10 of the workforce.
But a new report by Cornerstone Capital Group suggests 47 percent of American retail jobs could soon disappear, with cashiers, 73 percent of whom are women, most likely to be replaced by new technology.
In-store consumer technologies like self check-out are becoming widespread in supermarkets, cutting the overall number of cashiers required. Now task management software like Quevision can predict the precise number of cashiers needed at different times, allowing companies to cut employee hours and take millions off their wage bills.
Automated ‘digital kiosks’ piloted by MedAvail are dispensing prescriptions instead of pharmacy assistants, while mobile devices are taking on the duties of other sales staff. Macy’s image app shows shoppers product reviews for items snapped on shelves, and Walmart’s app offers special deals to customers as they browse the store.
Retailers are reacting to what the report dubs the “Amazon Effect,” pursuing automation to cut jobs and compete with online retailers like Amazon, which diverts its labor savings into lower prices that are proving irresistible to the average consumer. Amazon made 43 percent of all online sales in 2016, and rapid innovations in e-commerce continue to drive consumers away from stores and onto the web.
Competition on the high street looks set to increase with plans to launch Amazon Go, the “just walk out” convenience store heralded by the New York Post as “the next major job killer.” Amazon brutally hammers home the point in its promo ad, boasting “no lines, no checkouts, no registers.” Instead, the store will use sensors, computer vision and deep learning to detect items in a shopping cart and automatically bill the customer as they leave.
Increasing political pressure to raise minimum wage is also spurring retail owners to invest in job-replacing technology. With low-paid workers struggling to make ends meet – 36% of retail workers receive public assistance – the ‘Fight for $15’ movement has taken off, a number of states have seen legislative efforts to raise minimums to $12 or $15 an hour, and numerous localities have introduced minimum wages above state levels.
Retailers mostly absorb cyclical wage rises that occur when unemployment decreases, but they are bringing out a bottom-line response to these structural wage demands – investing in technology to cut low paid workers out of the equation altogether, leaving them as the report says, “stranded workers.” This baring of rival economic interests demonstrates the seriously disruptive implications of automating industries.
Jon Lukomnik, the executive director of the Investor Responsibility Research Center Institute which commissioned the study, said the findings “should sound the alarm for economists and political leaders. The shrinking of retail jobs in many ways threatens to mirror the decline in manufacturing in the US.”
Lukomnik emphasized the systemic effects of automation replacing low-paid jobs: “Moreover in this case, workers at risk are already disproportionately working poor, so any disruption may cause strains in the social safety net and stresses on local tax revenues."