The Death of Retail Shopping

Recently, an article discussed how Amazon (and other online companies) are going to basically destroy a large percentage of jobs in retail stores.

Sadly, shopping in retail brick and mortar stores (a physical store in your town) has been on a decline for decades.  You can trace the start of its decline with the opening of shopping malls, and a steeper decline with the rise of all-in-one megastores like Walmart.  As we advanced into the Internet Age, the shopping trend shifted that way as well, and retailers quickly learned that it’s a hell of a lot cheaper to simply list items on a website and then ship them to the customers, saving tremendous money by not needing a physical store.

Internet

Today, online shopping is more popular than ever thanks to reliable sellers, cheaper prices, and fast and reliable shipping through not only the USPS, but UPS and FedEx as well.  It’s never been easier to order items and have them delivered to your address a few days later.

As companies such as Amazon and eBay continue to grow, just how much of a threat is that to the retail shopping world?

I’m one of those shoppers who will try to purchase locally, if possible.  If the price is similar to online stores, then I’d rather purchase it in a local store and have the item right then and there.  I don’t have to worry about waiting for it to arrive in the mail, and it’s very easy to exchange or return if there’s a problem.

Last year I purchased a TV through Target’s website and picked it up at a local store.  Same thing for a laser printer purchased through Office Depot.  I was able to get both items for good prices that matched anything that I saw on Amazon or eBay, and I was able to pick up both items in person.  Best price + immediate pick-up = a win-win scenario.

But it was a different story when I was recently purchasing items to upgrade our home’s entertainment system.  Walmart wanted over $20 for a 50-foot coaxial cable, but I was able to purchase a similar one for around $8 through eBay, and with free shipping.  I needed two HDMI cables, and Walmart wanted $12 for a single four-foot long HDMI cable.  On newegg.com I was able to purchase a six-foot HDMI cable for $4 with free shipping.  I purchased two of them, and they quickly arrived a few days later.

So instead of spending over $40 plus tax and purchasing the items locally, I only spent about $16 and shopped online.  That’s real money right there, especially for families like mine who have to work with a limited budget.  Let’s also not forget that by shopping online I did not have to drive my car (gas money) or take the time to drive there, shop in the store, and deal with the local idiot workers.  (Okay, not all of them are idiots.  Some of them are good people who are stuck working there.  It’s Walmart, after all.  Drop your expectations when you enter the store.)

That’s really the limit though for my wife and I and our online shopping.  Occasionally we’ll purchase specialty items online, but almost everything else is purchased locally.  We’ll both gladly support the local merchants whenever possible, but not if it’s a large difference in price.  At the end of the day, money is still money, and not all of us have deep enough pockets where the price doesn’t matter.

Are retail stores facing a growing threat from Internet companies like Amazon and eBay?

Absolutely.

Just like how Walmart put the squeeze on local mom-and-pop and main street stores, the online world is putting the squeeze on virtually everybody else.

To operate an online store, all you need is a website, a warehouse with items, and access to a shipping company. Without going into too many details, that’s basically it.  It’s easy to see what your competitors are charging for prices, and you can set and change your prices very quickly.  Such a business can be operated with as few as a couple of people.  I worked for such a place that sold auto parts online, and our company had about ten people.

That’s a very real threat to today’s brick and mortar retail world.

 

Are jobs simply being transferred to a different format?

I’ve seen this argument online where people say that the layoffs in retail stores isn’t that accurate as places like Amazon are increasing their hiring, thus creating new jobs to replace the eliminated jobs.

For starters, you have to live near one of those warehouses or be prepared to locate to one, though good luck if you’re hoping for the company to pick up your moving expenses.  If you’re living and working in most cities across the country, and your store is closed so that the company can shift its operations exclusively online, then you’re out of a job no matter how many people are being hired in other cities for warehouse jobs.  That doesn’t help you one bit if you don’t live near one of the warehouses.

If you decide to make the transition, then you have to be prepared for a completely different work environment.  You may have been a cashier or a sales clerk in the retail store, but in a warehouse environment you might be picking orders (yeah, it’s a cliche example), or more likely handling returned items and customer complaints.  Automation can handle some areas of customer service, but companies still like to have human beings available to help solve customers’ problems.

Remember that as automation continues to rise in warehouses, then there will be fewer jobs available to average, hourly workers.  That also means fewer positions for those who want to be managers as well.

The future of retail shopping.

It doesn’t take a business analyst to see the doom for the future of most retail stores as they continue to look for ways to cut their expenses and compete with Internet shopping.

Grocery stores will always be around as people will continue to want to have immediate access to their food, so they can personally select it as well as have it right then and there.  How many times have you planned a meal that day and realized that you were either missing an ingredient, or something you thought was good had actually expired?  Like most people, you’ll make a quick run to the store to get the necessary supplies.

However, just because you have a grocery store doesn’t mean that you need to have a bunch of cashiers to help run it.  If you want to see the future of “smart” stores with fewer workers than ever, check out Amazon Go.  That, my friends, is how grocery and retail stores will look in the near future.  Sign in when you enter the store, sensors track everything that’s in your cart, and it’ll automatically bill you when you leave.  It eliminates cashiers, it dramatically cuts down on theft, and it speeds up the shopping process.

It wouldn’t be long until the other major stores adopted that style of technology and shopping experience.  Combine the “smart shopping” experience with a full grocery store and limited retail shopping (mainly basic necessities as well as seasonal items — Christmas, Easter, summer, back-to-school, Halloween, etc.), and there you go.

Workers will still be needed to receive the trucks and stock the shelves, and you’ll still need a few people on staff for customer support.  Through in a few technicians and a janitor or two, and there you go.  It’s very conceivable for a megastore such as Walmart to condense its operations, operate as a “smart store,” and reduce their labor as well.

All other supplies can be purchased online.  Drones can deliver small items to your residence within the hour, and highly-efficient delivery vehicles can take care of the rest.  Unless the retailer chooses a delivery company such as USPS, UPS or FedEx.

Conclusion.

Internet shopping continues to rise, and companies will be forced to make the necessary changes to stay in business.  Sadly, this means that many hourly jobs that average people rely on will be lost to downsizing and automation.

The best thing going for retail stores right now is that not everybody shops online.  Yet.

Time and technology are the enemies for retail stores.

As technology and concepts continue to advance at a rapid pace, and with companies fighting to keep their operating costs as low as possible, then most retail stores simply will not survive.  “Smart stores” will eliminate many jobs, and other stores will shift completely online, eliminating their retail stores completely.  Those unemployed workers will have to find a way to survive in a world where automation and technology continue to grow and eliminate the same hourly jobs that millions of people rely on for survival.

It’s just a matter of time until society reaches the breaking point of there not being anywhere near enough hourly jobs for the general public.

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