The future of work in the retail sector

The future of work in the retail sector

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Technology is playing an increasing role in our everyday lives. Futurists and researchers have warned of the effect these changes will have on employment and work as we know it. Jobs that have elements that are predictable and repetitive are likely to have these elements of the job automated. The jobs at risk include cashiers, clerks, and mining and maintenance workers, as many elements of these jobs are both predictable and repetitive. Not only are blue collar jobs at risk of automation, but also white collar jobs like bookkeeping, accounting and auditing clerks.
 
The debates arguing that jobs are at risk of being replaced or computerised is based on studies conducted mainly in Europe and Northern America. In this context, it’s difficult to predict to what extent job losses will be experienced, which makes predictions in the developing world even more precarious.
 
What has come out of our research is that the nature of work in the near future will be ‘flexible’, and this could have serious implications for the social protection of workers.
 
As a case study and because of our involvement with unions in this sector, the LRS looked at retail for the purpose of this research. Retailers are increasingly shaping their models based on convenience and the experience of shopping. E-commerce, which entails ordering shopping online, is becoming more and more prevalent. In addition to the advantages customers could experience through automated stores and e-commerce, retailers have much to gain. Retailers would require less floor space in future as shopping goes online. Such a decreased reliance on human labour will not only have cost-saving effects, but also avoid the demands of organised labour such as providing workers with adequate social protection.
 
However, services like online shopping and automated stores are generally associated with middle to high-level income groups. When we consider the African context, it is well known that affordability and literacy levels differ to that of the global North. There is a case to be made that a large percentage of the buying power in developing countries is located in an LSM bracket that does not necessarily support automation processes. The Living Standards Measure (LSM) is a tool used in South Africa to group people according to their living standards. It divides the population into 10 LSM groups, 10 (highest) to 1 (lowest). A successful retailer such as Shoprite’s majority of buyers are located in the mid-range LSMs.
 
Automated stores and Big Data mining represent complex systems that operate at very high costs. However, as the cost of automation decreases automation could become more accessible. This is difficult to foresee as automation is further reliant on infrastructure – like good internet connections. Automation can, therefore, be regarded as a slow process that has to overcome economic, societal and legal hurdles which are often more pronounced in a developing context.
 
It should be noted that the experience a retailer is trying to create in the developing world could differ fundamentally from that in the global North. Retailers in sub-Saharan Africa could have already started the automation process, but it becomes a branding decision. It relates back to the experience they want to craft in a context where price is valued more than convenience.
 
Some are also more cautious regarding the role of technology in retail and the extent that automation would actually lead to job losses. Richard Kestenbaum, co-founder of private investment banking firm Triangle Capital LLC, reasons that technology is important but will remain as only a tool in which the connection between a consumer and a product is made. It is not the answer to all the challenges existing in the sector.
 
The reality is that work is starting to take on a more flexible form in which workers are not protected and jobs are not secured, according to Kolawole Omomowo’s paper titled, The changing nature of work: The creation of a ‘working poor’ population in post-apartheid South Africa.
 
Outsourcing of work is fundamental to a value chain in which cost dominates all decisions. Outsourcing becomes a way for organisations to rid themselves of less-skilled workers and to have that work done at a lower cost. The steps employers are willing to take to free themselves from a permanent guaranteed workforce is in line with what retail workers are experiencing on the ground. Unions are constantly faced with employers whose main objective is to terminate all permanent contracts that provide employees with any form of social security.
 
Our research shows that the future of work is content-driven and that some have argued that the extent of automation is often exaggerated. It is, however, anticipated that routine or predictable tasks are more susceptible to displacement than non-routine tasks. Such predictions place a sector such as retail at a higher risk than an industry such as Information Technology (IT). It is predicted that while the jobs themselves may not entirely vanish, the jobs will be ‘redefined’. If a job radically changes, a worker may indeed not have the new skillset.
 

Bibliography

 

  • Arntz, M., Gregory, T. and Zierahn, U. 2016. “The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis”, OECD Social, Employment and Migration Working Papers, No. 189, OECD Publishing, Paris. http://dx.doi.org/10.1787/5jlz9h56dvq7-en
  • Kestenbaum. R. 2017. Where Retail Technology Needs To Go Now. https://www.forbes.com/sites/richardkestenbaum/2017/12/10/where-retail-technology-needs-to-go-now/#4fb4d3875fc6 Date of Access: 8 March 2018.
  • Omarjee, L. 2017. The future of retail: Robots to replace people? https://www.fin24.com/Companies/Retail/the-future-of-retail-robots-to-replace-people-20170109
  • Omomowo, K. E. 2011. The changing nature of work: The creation of a ‘working poor’ population in post-apartheid South Africa. Development Southern Africa Vol. 28, No. 5, December 2011.
  • Singh, S. 2008. Impact of Internet and E-Commerce on the Labour Market. Indian Journal of Industrial Relations, Vol. 43, No. 4 (Apr., 2008), pp. 633-644. Published by: Shri Ram Centre for Industrial Relations and Human Resources. Stable URL: http://www.jstor.org/stable/27768158

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