How’s this for an alarmist headline? Retail jobs are disappearing as shoppers adjust to self-service (LA Times Mar 3) Here’s the article’s point of a view in a nutshell:
In an industry that employs nearly 1 in 10 Americans and has long been a reliable job generator, companies increasingly are looking to peddle more products with fewer employees. Shipping and warehousing workers are being replaced by robots that can process packages more efficiently than humans. Virtual assistants are taking the place of customer service representatives. Kiosks and self-service machines are reducing the need for checkout clerks. …
“We have a service economy, and the service sector is starting to automate,” Ford said. “We’ve seen that technology does destroy jobs in those sectors.”
The shift is as close as the corner store. Like gas stations and banks before them, supermarkets are encouraging patrons to avoid cashiers. Most major grocery chains have equipped their stores with a few self-service lanes, which research has shown boosts revenue and profits.
Shoppers at Fresh & Easy Neighborhood Market, a subsidiary of British retail giant Tesco, don’t have a choice — all checkout stations at the chain’s 156 U.S. outlets are do-it-yourself. Customers like the speed and shorter lines, said Brendan Wonnacott, a company spokesman.
This video focuses on AVT Inc., a maker of advanced vending machines that is featured in the article.
So is increasing automation in retail really a cause for concern?
I frankly have a hard time getting too worked up about it. Once upon a time, vending machines might have cost cigarette girls their jobs. But many applications today go in a different direction. The article fails to ask whether these sales would be taking place without automation. Back in the day, bars were going to sell smokes either by a person or a machine. It’s less clear today whether firms would still be offering products for sale if they couldn’t use vending machines.
Take for example, my local Macy’s. It has a vending machine selling iPods. Or my local skating rink. Its vending machine sells shoe laces that fit hockey skates. Without vending machines, those sales don’t happen. My Macy’s doesn’t sell any other electronics and is around the corner from an Apple store. I cannot imagine it would dedicate the floor space and personnel to sell iPods in the conventional manner. Ditto the park district skating rink. The vending machine may be a life saver for the parent of a peewee hockey player suffering a wardrobe malfunction just before an early morning practice but that is going to be a once in a month event and not worth staffing a pro shop to serve. A similar logic applies to the hotel bar offering sunscreen featured in the video. The hotel does not have to offer this product. Hotel bar implies martinis, not Coppertone. If the hotel did not have an easy way to manage and present the inventory, they wouldn’t do it.
Self-checkout lanes may be a different story, but aside from Fresh & Easy, they have not completely squeezed out human cashiers. As I have argued before, grocery stores still need to staff up for peak times. The real benefit from self-service checkout (I believe) comes at off-peak times when variability makes the one or two human-staffed lanes that would otherwise be open inadequate. That says self-service has the potential to make customers much better off (if they care about waiting times) with minimal impact on overall employment.
Finally, let me say that I don’t think that Fresh & Easy has killed jobs. They are in very competitive markets in Southern California and Arizona. And they are late getting there. This is a little like Macy’s selling iPods. Do you really think that Tesco would have gone into these markets if they had to follow a conventional supermarket format?
There is an interesting web novella Manna about this issue here
http://www.marshallbrain.com/manna1.htm
The novels setup of how automation leads to bad consequences is convincing. The journey away from those bad consequences isn’t.
I presume the aim of any society is to have 100% unemployment. At least of the boring jobs. Leaving us time for commenting on blogs and doing cool stuff.
Do we have a society where someone whose work at a checkout is replaced by a cheaper robot can get their Maslow’s needs fulfilled? If so the Luddites are probably wrong. If not I don’t blame them for throwing their shoes in the workings.
Every advancement has been heralded as the end of times for employment. In reality, though, productivity drives the entire economy and results in a net job creation. While the cashier may find no comfort in that fact initially, as the economy becomes more efficient it creates jobs that people require.
I am in the productivity business. If my only goal in life was to remove workers I would have found another business. If you can increase productivity by 10%, taking away the non-value add work that even the worker doesn’t find fulfilling, it is equivalent to 10% more workers showing up each day.
Ask any Operations person; would you like to have 10% more workers than you have today without any increase in direct labor cost? New York minute comes to mind as they shout YES. One project we did with Toyota delivered Six Sigma accuracy AND a 292% increase in productivity. Resources that were tied up doing one set of tasks are not reassigned to other work so that they can expand their business.
Investments in automation, software and anything that makes the economy more productive is a good thing. Alan Greenspan himself has identified the positive effects it has on the growth of a nation. With all of the head count reductions that have gone on in the past two years, companies must make more effective use of their direct labor and customer value is directly impacted.