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Automation and Retail Jobs

Before Jumping into what I'm about to say, I encourage you all watch this video:

https://youtu.be/_h1ooyyFkF0

 

You may also look at this article:

https://www.aeaweb.org/articles?id=10.1257/jep.29.3.3

 

The article actually shows a spot where Automation doesn't have to remove jobs, but can change what those jobs do. This section sits in the "Service" industry. (Biggest example being that Bank Tellers' jobs actually GREW between 40% in the 30 years AFTER the ATM was introduced.)

 

Allow me to quote:

"First, workers are more likely to benefit directly

from automation if they supply tasks that are complemented by automation, but

not if they primarily (or exclusively) supply tasks that are substituted."

 

Within the Service Industry lies Retail Workers, Food Workers, and other "Customer Facing" jobs. Yet within this same Industry is that of Sales, which saw a decline - of course this was also during a period of Recession, where lots of stores began closing down due to lack of sales. (Radio Shack and Sears to name a few.) Many of those Sales jobs were commission based jobs on what were called "non-essential" items, like fashion and electronics. (Food and shelter based stores seemed to fare really well even during the recession.)

 

So why the increase in Bank Tellers?

Well, the tellers went from simply dispensing cash to becoming more of a sales force by using a system known as relationship banking. Tellers were then spread out to offer additional services that a bank could provide its customers, perhaps in relation to services a customer were aleady using.

 

So why am I talking about this?

 

It's because I have worked in retail for over 15 years, and was a survivor of the great Radio Shack shutdown. For me, Customer Service has become more than a job, it's my entire career.

 

What I personally noticed was that during the same time Radio Shack and other similar companies were closing stores and going into Chapter 11, Food Service companies, grocery stores, and Home Improvement stores were growing and opening new locations. I also have noticed that many of the companies that are failing now simply have been unable to keep up with the fast pace that technology provides/demands.

 

I have worked in stores that both have Self Checkout lines and stores that only had live cashiers, so what I'm about to say comes from that experience.

 

Am I worried about SCO taking away jobs?

The short answer here is no.

 

The long answer starts with a phrase:

Retail work is a "Labor Control" industry.

 

What this ultimately means is that the number of people you see within a store at any given time usually directly correlates with the "historical" amount of business that store makes within that time frame. Labor control goes on how well a store did in the past to decide how to schedule a store for the present. In effect, labor control is a version of induced demand.

 

The more sales a store made during a certain time of day, for that given day in the previous year(s) actually determines how many employees that store can have for the same day this year and beyond. In other words, the more customers a store had in the past determines how many employees they can have now and in the future.

 

Right now, many large style stores have a problem.

To help keep demand within their goals and expectations, there has to be anywhere between 2-5 times more cashiers than can be on the actual sales floor. Cashiers are not generally trained to have the product expertise that a Sales associate would have, yet they make up the majority of retail based jobs.

 

Esentially, cashier positions are killing Sales positions.

This is especially true of larger stores with multiple entrances/exits. Because even the bare minumum amount of cashiers that a store can have on staff at any given time is at least 1 per exit point. (Large box retailers may have several exits spread across the front end that need cashiers nearby.) The number of cashiers on staff must also fluctuate to accomodate how busy the store is throughout the day as per the sales history of that store. Cashier positions increase more than Sales positions to accomodate demand and keep customers moving as quickly as possible.

 

Sales positions are also slower to increase due to the fact that sales positions in many cases were automated even before automation was a thing. The demand for Sales positions has been on the decline, even without automation, because more customers have become knoweldgable about the products/services they need. Many times a customer knows what they seek and just need to know where to find it within the store. This means that services like in store locations offered on company websites/apps reduces the need for extra sales positions.

 

Those same tools would also be available to the cashiers and other employees of the store, reducing that need further. Leaving actual sales positions to be for more specialised products and services, to assist customers in finding/ordering the items/services needed to fix the customers' needs, to answer detailed questions about a product/service, and/or to assist in keeping shelves stocked.

 

So what does this have to do with SCO?

I have heard cashiers affectionatly be nicknamed the "front end warriers" - they are the first people customers see as they enter the store, the last people customers see before they leave, and in many cases - the only people customers end up interacting with.

 

If a customer comes in knowing what they want, and where to find it, then the only person they talk to would be the cashier as their are being charged for their purchases. The cashier position is usually entry level and in many cases minimum wage. Most of the time, they only stand at registers and ring up merchandise. They also act as the last line of defense against potential theft, which is why at least one is needed per exit.

 

But, since these positions are also affected by the same induced demand of labor control, which is "how many people can we afford to have on duty compared to last years' sales" - cashier positions are very flexible and depending on the time of day, you could have only 1 cashier available or more, depending on how busy the store was in the past.

 

This is where SCO comes into play:

The self checkout systems actually do not have to reduce the number of cashiers available, but they can improve the customer checkout times during slower periods when the number of cashiers available would already be reduced.

 

Many stores use this model:

"If it isn't a busy time period, reduce the number of people working."

 

That means that regardless of the presence of SCO, there may be fewer cashiers available to ring up merchandise - espeically during slower times of the day as per the labor control setup.

 

If there is a sudden uptick in sales during this historically slow time, that means 1 cashier without SCO can only ring up one person at a time. This could lead to long lines at checkout, which means waiting a long time before you can leave the store with your purchase.

 

On the other hand, if SCO was present, that same cashier can assist up to 10 customers at a time, though on average a SCO cashier only has 4-8 SCO registers. In many cases, the checkout process is fairly straight foward and anyone can scan the merchandise, pay, then leave. The only time SCO could cause any wait time for a customer is if they need the cashier to assist them for any reason. This could be if something doesn't have a barcode or if they are writing a check. So that same cashier can help ensure that the lines move more quickly and there is less waiting.

 

Does this mean SCO is taking cashier jobs?

The short answer again is no.

 

Cashiers are almost like tellers. They are the Service side of the house of retail. Which means they provide a social service as well as merely ringing merchandise. SCO (like the ATM) cannot perform that social task and provide a good customer experience. All SCO does is allow the process to be more streamlined so customers are not waiting for the limited resource of cashiers. A SCO cashier is still a cashier, and all SCO systems require at least 1 cashier present to assist customers in the checkout process.

 

Literally a cashier's job description is:

"Assist customers in the checkout process."

So a customer using a SCO is not taking a cashier's job, nor are they doing the cashiers job for them.

 

Now why would SCO not be taking cashiers' jobs?

This answer is very simple. We still need cashiers to assist, even at SCO and with retail jobs following the labor control model, cashier positions would be lowered/lost due to the induced demand of the store's sales. Just like cashier positions would be needed/increased as that demand increases.

 

In other words:

How many hours a cashier gets and the amount of cashiers a store has is solely based on the sales of the store. As more customers come to buy from the store, more hours are alloted to positions. As less customers come to buy from the store, less hours are provided.

 

So the only thing that can threaten cashiers' jobs are the customers themselves.

 

Lack of customers = lack of cashier/retail jobs.

Increase of customers = increase of cashier/retail jobs.

 

SCO has no direct impact on this formula. If a store is going to reduce the number of cashiers, they will do it regardless of if SCO is there or not.

 

SCO does free up the cashiers so they can help provide a better customer experience and offer better customer service - granted the limitations of being a cashier - to more customers at the same time.

 

Taking into consideration that retail jobs are now more demanding, and people working these jobs need to be able to multi-task, this extends that ability to the cashiers who were preivously stuck doing one single task at a time. Knowing that, I personally believe that SCO is helping to improve customer service while not directly impacting any jobs.

 

If we could get to a point where we needed fewer cashiers, maybe that will lead to an increase in those declining sales associate positions on the floor, and those who were cashiers can fill that need.

 

With that in mind, my experience is that Automation does not have to eliminate jobs. Nor does it mean that automation means that jobs are at risk of being lost.

 

The ATM led to an increase in Teller Jobs.

The Automated Phone Service led to an increase in telephone CSR jobs.

 

So jobs within the service industry are improved by automation.

 

So the few jobs that could be "lost" to automation are replaced with new jobs, and those jobs may have been hazardous for humans to do to begin with.

 

So, if you really want to save cashier/retail jobs:

 

Get off the internet and go buy items from your local store. I know many of you will have a hard time with this since you can "get it for so much cheaper online." Well, that lower online price has a bigger price tag attatched to it - the loss of cashier jobs and the stores they work in. Don't argue with a cashier in a store about SCO taking their job, because they are still standing there, ready to assist you - even if thats at SCO.

jmac32here 11.27.2019 0 75
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11.27.2019 (14 days ago)
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