Robots have been pegged as major threats to retail jobs—however, the concern could be more overblown than previously thought.
While headlines continue to tout retail’s demise, automation’s role in creating more, higher salary jobs has been largely overlooked, The Wall Street Journal reported. The popularity of robots has led to an uptick in e-commerce jobs over the past few years, since companies are looking to innovate and hire more people to fulfill consumer demands.
Even though brick-and-mortar store closures are rampant, e-commerce tycoons, like Amazon, have offset job loss with their high-tech fulfillment centers stocked with bots and other automated operations.
According to Progressive Policy Institute chief economic strategist Michael Mandel, warehousing has contributed 274,000 jobs in the U.S. since 2007. Mandel said that total e-commerce employment has grown to 401,000 jobs over the past decade, which is nearly three times the brick-and-mortar job decline. Mandel added that fulfillment centers pay on average 31 percent better than physical stores in nearby areas, which has been a boon for workers, but a concern for industry members who are worried about how e-tailers will afford to pay more workers and still keep their prices appealing to consumers.
Experts argue that despite these issues, e-commerce has prevailed for two main reasons—convenience and personalization.
E-commerce sites don’t just sell affordable items, they allow consumers to find a variety of products, pick the ones they want and generally have them delivered in as little as 48 hours. Or less.
[Read more on retail’s automation push: Report: Millions of US Retail Jobs at Risk Due to Automation-Or Are They?]
Consumers are also willing to pay more for convenient shopping. Cowen & Co. analyst John Blackledge estimated that 42 percent of U.S. households (53 million), are Amazon Prime members, which provides them with one-to-two-day delivery, same day delivery in certain urban areas and other exclusive perks for $99 annually. Prime members are also said to order twice as much as non-Prime members across many items, including apparel and household goods.
Amazon stays competitive, among other reasons, by stimulating consumer demand and absorbing delivery costs. The e-commerce tycoon uses the margin it earns on products to operate its fulfillment centers and better serve its consumers.
For Amazon, investment into its fulfillment centers allows for more than simply hiring workers. Employees at its Fall River, Massachusetts e-commerce center doesn’t just hire workers—it trains them to work side-by-side with technology, including forklifts and automated machinery.
“The vast majority of our workforce never had experience in a warehouse, never had any experience driving a forklift or powered industrial equipment, and we provide them that skill and training, we teach them the new retail,” said Andrew Sweatman, general manager at the fulfillment center.
At the warehouse, Amazon’s software and automated technology works alongside employees, helping them locate products for consumers. Items are already scanned into Amazon’s inventory and something is needed from the fulfillment center, it shows up on the scanning gun of a worker nearby. Guided by sensors that communicate with floor wires, the worker’s forklift will lift them to the bin where the item is located. Automated conveyor belts then help workers pick the right box, check the contents and weight of the box, affix a delivery label and send boxes to delivery trucks.
As shown with Amazon, retail jobs aren’t just disappearing. As retail continues to transform, brick-and-mortar jobs could transition to e-commerce jobs, enabling humans and robots to work together in the same environment, while retailers maintain an agility necessary in today’s uncertain sector.