Automation might mean fewer jobs

Retail isn’t the first industry to spring to people’s minds when they think about the bleeding edge of automation and technology, perhaps because it is so woven into the fabric of our everyday lives. The fourth industrial revolution will affect individual sectors very differently. However, for two reasons retail is a bellwether industry for the future of work.

Firstly, British retail is one of the most competitive industries in the world. It is incredibly responsive to the consumer. What people want to buy and how they want to do so is continually changing. The industry responds and as a result the nature of retail jobs change; the supermarket and the whole idea of self-service groceries is an innovation from the 1950s. The same need to respond and innovate has driven the UK’s supremacy in e-commerce. Online counts for about 15 per cent of sales here and the value of that is higher than almost any other country in the world.

Things are still changing month by month. Multichannel retailers are already finding that people are differentiating less and less between buying online and in store, they just want the item that they purchase to work. For them the future of shops may be partly showroom, partly collection point, partly a space to hold events and provide experiences and services that you can’t get from an online competitor.

Secondly, the retail industry is the largest UK private sector employer—employing almost three million people, one million of whom are under 24. The changes to jobs in retail will affect people more than any other industry, and in many cases these will be people just starting their careers.

While technology has brought changes to the retail workforce before, the difference this time is how many new costs retailers are experiencing, many of which are related to employment. Over the past half century, the contribution of retail to providing good quality, entry level jobs in communities across the UK has been made possible through steady improvements in productivity. At the moment, the fact of life for retailers is that labour costs are going up and technology costs are going down. Investing in technology is no longer a choice.

The structural changes to the retail workforce will not impact everywhere equally. Deprived regions are likely to be affected by there being fewer retail jobs in the future due to fewer other options locally. Our research also shows that rather than the lower paid workers in retail, it is the middle core of people who report that working in retail is the only job they can find. To lessen the impact on sections of the workforce who for various reasons are not well placed to find other work, we have made a number of asks of government, including a proper industrial strategy for retail and using the proceeds of the Apprenticeship Levy to help people who may be mid-way through their career to retrain or keep their skills up.

Government will need to work with retailers to mitigate the impact and help ensure that workers have the skills to use technology to improve their own productivity. Less interesting parts of jobs—like checking the stock room for customers—could be taken care of and AI could aid our decision-making. A collaboration between people and technology that maximises the strengths of both. To make this feasible, we will need to ensure productivity increases among retail workers in their own right.

We have a choice between improved productivity driven by better jobs, innovation and new skills for the digital age and improved productivity driven primarily by a shrinking UK retail workforce. Today, 100,000 people are employed in retail jobs that did not even exist five years ago. Fewer jobs in retail in the future seems inevitable but, by working together, there is an opportunity to ensure they are better ones.