Robots and the Great Depression in Retail

Amazon is eating the retail industry’s lunch. Walmart has finally woke to the challenge and is beefing up its stores with technology: online purchase and store pickup (BOPUS); smart shopping carts; point of sale and delivery kiosks; robots in warehouses and stores. Thrashing. They have a huge lead in stores and sales, but it seems, no vision.

Meanwhile, Amazon has its leadership in cloud services; advanced AI technology; an online juggernaut for nearly everything; warehouse robots; and now it is dipping its toe into Whole Foods; and brick and mortar retail. It may even buy Target. It has vision and a steady incremental onslaught that traditional retail cannot match or even prepare for.

More retail outlets, especially in malls, closed in 2017 than at any time in history.

Retail employment has recovered steadily to go beyond the pre-2008 debacle; but only just. Compare retail employment recovery to the S&P 500 and it is clear just what a miasma retail employment is in. The stock market has burgeoned to new records. Retail employment actually decreased in 2017 by about 70,000 jobs, with women’s loss of jobs in retail almost double that. Is this a sign of a stockmarket debacle, like the one in 2008; or is it just further proof that labor is being outmuscled by capital.

Men can be employed in warehouses and inventory, where women usually are not; and retail has decided those positions are not as vulnerable.

But Amazon’s robotic warehouses show that retail outlets are fundamentally wrong about their strategy. Amazon has decided to hire robots rather than people, and have added more robots than people to their bounding enterprise, since buying Kiva robotics. They now have more than 100,000 robots and 140,000 people in their warehouses.

For the diminishing brick and mortar enterprise, retail robots, like Pepper, can provide services and unique happy shopping experiences that a human salesforce simply can’t.

Over 15,000,000 jobs exist in retail. Almost all of those jobs (let’s say 90%) are vulnerable to automation. Many stories in the news complain of the retail apocalypse, but they are referring to the lost stores and malls. This is the small part of the story. Fifteen million retail jobs are the real story of this looming dystopia.

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