Amazon and other online retailers have disrupted the traditional setting of a retail employee from mom and pop storefronts to vast distribution hubs or a maze of computer servers. Ecommerce is changing the face and function of retail jobs. As another class of new graduates continue their job search, two long-held perceptions of retail will change.
Retail No Longer Means Low Pay
Online retailers like Amazon have dramatically changed customer expectations. Quick delivery times mean ecommerce operations often require 2-3 times the labor that a traditional warehouse would employ. Rising labor costs resulting from a 10-year low in unemployment have contributed to overhead while investments in automation (i.e. AI and robots) try to counter the low-cost labor shortage while at the same time raising the skills required of future employees.
Some automated systems help pickers find items faster with more accuracy. According to Kohl's Indiana fulfillment warehouse, the facility processes three times faster than other sites all due to automation. Automated material handlers, high-speed conveyors, and robots with vision capability are all available for use in today's distribution centers. Robots can handle 2400 inventory picks per hour. Humans usually pick 65 units per hour. That's an astounding difference.
To no one's surprise, Amazon has led the industry in robotic applications. The company plans to add 16,000 more robots to its new distribution system.
(Help wanted: engineers)
Lower Prices Don't Always Mean Lower Costs
Buried beneath the headlines, Amazon's acquisition of Whole Foods was doing more than getting them deeper into the grocery business. In truth, while they were pushing down shipping charges for the entire industry, they have been losing money (an estimated $7.2 billion in 2016) - in large part due to expedited delivery times and the heavy costs of "last-mile" delivery to your front door. Whole Foods gives Amazon storage and storefronts in 460 of the most affluent neighborhoods in America, giving them mini-distribution centers within 10 miles of 80% of the population, significantly lowering their cost burden, perhaps enough to start making a profit.
The push to lower delivery costs while keeping prices down doesn't stop there. In the past few years, Amazon has leased 20 Boeing 767 cargo jets and added a fleet of long haul trucks to rely less on Fedex, UPS and the U.S. Postal Service.
(Help wanted: pilots and drivers)
The average retail job is changing. Look no further than your local shopping mall to find fewer stores and fewer clerks. Developers are figuring out what the mall of the future looks like, but count on significant amounts of real estate dedicated to back-end storage and logistics to continue to reduce the costs of getting packages to your door and sometimes back again, for free.
Onestop Internet is an end-to-end ecommerce solutions provider, combining logistics with web development, creative, photo and video studio, and a full-service performance marketing agency to guide brands through constantly changing world of digital commerce. Contact us to see how we can help reduce your logistics and delivery costs.