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Is tech investment taking away retail jobs?

Jobs in retail are in decline, and many blame increasing costs and investment in technology – but what should retailers do to adapt to tech disruption?

Retail jobs have fallen in the third quarter of 2017 compared with the same period last year, according to figures from the British Retail Consortium (BRC).

The study found that working hours in retail fell by 4.2% in the third quarter year on year, and reductions in hours were seen in both full-time and part-time contracts – the fastest rate of decline since BRC began monitoring these figures in 2008.

BRC chief executive Helen Dickinson said this was due, in part, to an increase in technology adoption in the retail space.

“The pace of job reductions in the retail industry is gathering steam,” she said. “The three months to September saw the sharpest year-on-year drop in hours and employment since the monitor started in 2008. Behind this shrinking of the workforce is both a technological revolution in retail, which is reducing demand for labour, and government policy, which is driving up the cost of employment.”

Advanced digital technologies are becoming more integrated into the retail workplace, not only reducing the need for retail workers, but also requiring retailers to teach their employees new skills to ensure the store’s tech has value.

Dickinson argued that as retail accounts for nearly 10% of the UK’s overall employment, more must be done by the government to add flexibility to the Apprenticeship Levy to allow retailers to use it to provide digital skills training for their staff.

But strict rules govern the Apprenticeship Levy, leaving many concerned that the government may not provide the correct guidance on how the levy could be used to teach existing staff the skills to survive in a digital environment.

“The challenge for retailers will be in maintaining the pace of productivity improvement as they come up against shortages of the skills needed for a new, digital-dependent industry,” said Dickinson.

Shift in consumer behaviour

Despite falling retail employment, BRC found that more stores are opening, with convenience shopping boosting the number of stores in the UK by 2.4% in the third quarter.

This shift in consumer behaviour towards convenience shopping results from higher consumer expectation, driven by disruptive shopping platforms such as Amazon, and this rise in customer expectation and blurring of the lines between channels is one of retail’s biggest challenges.

This is leading a number of retailers to implement in-store and online technologies to cater to the new way customers are shopping – including self-checkouts and digital kiosks.

In some cases, in-store employees are equipped with tech in the form of endless aisle systems or mobile checkouts. At certain points in the customer journey, consumers of all ages still want to interact with a human employee.

Technology adoption should be designed to automate certain processes, rather than cutting the need for an employee out of the business, and Anil Gandharve, vice-president and global head of retail, CPG and manufacturing at Mindtree, said retailers need to strike a balance between convenience technology and human interaction in stores or through help services.

“The challenge for retailers is to maintain high productivity levels by investing in these new innovations, while not losing the human touch required to grow and retain their customer base,” he said. “The key to industry-wide success rests on striking the right balance between tailored technology and in-store human experience.”

Read more about retail tech

Many retailers have equipped staff in bricks-and-mortar stores with technology – but research still suggests that consumers are often not impressed with shop staff’s use of tech. Research by Salesforce found that 47% do not think store staff have the right tools to give customers the experience they want.

If they do not receive a good experience, modern fickle customers – who lack traditional brand loyalty – will quickly shop elsewhere and Chris Wood, director of UK retail at Salesforce, believes training staff to use technology in stores is just as important as implementing the technology to begin with.

BRC’s research found that 50% of retailers aim to increase retail staff in the final quarter of 2017 when the retail industry becomes busiest in the lead-up to Christmas.

But Salesforce found that 57% of people in the UK plan to do more than half their Christmas shopping online, and Wood said this is a sign retailers need to use digital technology and highly skilled retail staff to adapt to consumers’ new-found omni-channel behaviour.

“Consumers are using all available channels – online, mobile, social and in-store – to research and plan their holiday shopping,” he said. “Retailers need to be ready to respond to this shift in shopping behaviour and it is clear that digital adoption and plugging the skills gap will be key to holiday sales.”

Threat of automation

Like many sectors, the retail industry sees jobs under threat of automation due to the nature of roles, and many employees in this sector have fewer qualifications – making training in areas such as digital skills important in attracting and retaining staff.

But Heather Barson, director of retail and hospitality at Fujitsu UK, said firms should be focused on increasing productivity by using technology to reduce repetitive tasks and processes, rather than eliminating employees from stores completely – repurposing staff and giving them more time to spend with the customer.

“Doing this will allow them to better provide a more personalised service for customers, complementing the experience they find online,” said Barson. “While technology can be used to improve a retailer’s service and better equip staff, the human touch will always be needed to make that emotional connection.

“And when considering the ever-increasing rise in multi-faceted jobs, prioritising technology to take on the time-consuming and mundane tasks will help create a new set of jobs with a new skillset that balances the retail roles that are now using technology.”

So although the figures show that retail jobs are in decline, many agree that consumers will always want and expect to see employees in physical retail spaces.

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This is crazy to me. Outside of pure laziness, I do not understand why people prefer shopping online. It's cold, it's impersonal, you cannot really see what you are going to get, it's wrong half the time so now you have to deal with returning it, and your information is there for the taking by any number of hackers out there in the new Wild-West that the Internet has become.

I want to see, feel, touch and even try on the thing that I am looking to buy. And yes, I like the experience of interacting with the store rep. Not to mention the fact that I enjoy supporting the local economy. When I go out to eat, I refuse to interact with these automated kiosks that they are trying to push on us now. That charming waiter or waitress is a key part of the dining experience, and I will not have that ruined by some machine. The chef puts his heart and soul into creating what I am about to eat. I do not want a precisely prepared robo-meal.

These companies forget that robots and machines are NOT consumers. So when you have replaced all of the people with machines and those people cannot afford to be consumers any longer, where does that that leave you?

People, say no to the robots, say yes to retaining jobs, get off your duffs and go shopping!

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