Australia

Online shopping could spark retail jobs ‘Armageddon’

Australian retailers continue to struggle. July's ABS figures show retail sales were the same as they were the month before — zero growth.

Over the past year, retail turnover has grown 3.2 per cent, which sounds good but is less impressive when population growth and inflation are taken into account.

After health care, the retail sector employs more Australians than any other.

With smartphones, voice-activated assistants and the local opening of the world's largest online retailer, Amazon, the amount we spend online is soaring. As that figure rises, what does it mean for millions of workers?

At Melbourne Snowboard Centre, working for the shop or the website are the same.

"The way people shop nowadays it's imperative you do have an online store with your product featured on it as well," e-commerce manager Daniel Rim said.

"The product nowadays, when customers are coming and buying something — whether it's $100 or $1,000 — I don't really know anyone who doesn't do a little bit of research first."

Employee roles changing

Australians spend eight of every hundred of their retail dollars online.

In the US, that figure is more like 10. In the UK, it is 17 dollars out of every hundred.

Because of that trajectory, the recent local launch of the world's largest online retailer, Amazon — and the growth in online shopping generally — will not only affect customers and rival stores, but also the 1.3 million Australians working in retail.

Industry consultant Brian Walker of Retail Doctor Group said there was trouble ahead for Australian retail workers if we followed global trends.

"It's the ongoing transfer of roles and skill sets as automation and online start to make their presence felt," he said.

"The next wave will be artificial intelligence (AI), voice control. So the customer experience is changing and, accordingly, employee roles are starting to change as well."

Some retailers are already there. At the snowboard store, 60 per cent of sales are now completed in the store front and 40 per cent online — packed in the warehouse out the back. The same staff serve both.

Man checks stock on computer at Melbourne Snowboard Centre

Using touchscreens in the store, the website acts both as a warehouse and a sales tool.

"Physically in the store we're limited by space," Mr Rim explained.

"We have quite a large catalogue of stock and being able to sort of take the customer and say, 'Hey, this is what we've got on the wall and this is what we can show you in this square metre of space, but this is what we have as well'."

When the shop is quiet, staff help to pack online orders.

Having both online and physical stores — a model called omnichannel — allows retailers to diversify, giving them a stake in the future.

'Turning retail on its head'

Mr Walker said the Australian launch of Amazon, was a pivotal moment for the industry and workers.

"They really are, frankly, the Armageddon of traditional retail, because they've taken the model and they're turning it on its head," he said.

"Instead of consumers visiting retail, retail in effect is coming into consumers' hands in exchange for data."

Internet-linked assistants in the home — which mean adding to the shopping list is just a yell away — are another danger sign for traditional retail.

Electronics chain JB Hi-Fi is heavily exposed to the threat of Amazon. It has embraced the omnichannel model and, although online only makes up 5 per cent of sales, that figure soared by a third this year.

Even for troubled chain Myer, online sales surged by 49 per cent this year.

Australia's biggest retailer, Wesfarmers, would not comment on its digital plans, but recently appointed the ex-president of Walmart International as an adviser to the board.

In the US, businesses like Walmart are prospering, but rely less on their physical stores — meaning fewer in-store jobs for lower-skilled workers.

"The online retail sector, is a lot less labour intensive," IBISWorld senior industry analyst Andrew Ledovskikh said.

"There are far fewer customer-service positions, there are far fewer back-room jobs … you're not seeing it replace losses in certain sectors of the retail space."

No secure full-time jobs in Amazon warehouse: union

Amazon workers at its Australian distribution centre in Melbourne would not talk to the ABC, but their representatives said they did not hear horror stories, such as those reported overseas.

However, National Union of Workers (NUW) organiser Tegan Milliken said all the staff were employed on part-time and casual contracts by a labour-hire firm.

"Here at the moment they're on, just a bit over the minimum wage, so that's a good thing," Ms Milliken said.

"And [labour hire firm] Adecco is committed to keeping it there at this stage. But at this point we've had no commitment whatsoever for permanent work.

"[Amazon] are almost the world's most profitable company and we believe that they most definitely can provide full-time work and secure jobs that people can count on."

That might be some way off.

Chinese online behemoth JD.com recently opened a warehouse in Shanghai, which is four times the size of Amazon's Melbourne distribution centre.

The Shanghai warehouse has just four employees — and their only job is to service the robots which process the online orders.

Back at the snowboard store, the online business does not compete with the in-store business, they are simply focused on staff getting customers the right product.

"We try our best to outline, online, every feature, the ins and outs of each product," Mr Rim said.

"But I don't think we can do away with in-store staff and being able to break it down with the customer and get them the right product.

"For that, there will always be someone behind the counter."

Original Article

Leave a Reply