- As much as 80% of retail jobs at risk from automation, Citi and University of Oxford predict.
- Low-skilled jobs most at risk and will have profound effects on communities.
- ‘Watershed’ moment coming for retail jobs, Citi and Oxford warn.
LONDON — Analysts from Citi bank and academics from Oxford are predicting seismic changes to the retail industry that could mean low-skilled jobs “vanish.”
“The lesson of the twentieth century has been that most jobs that become automatable eventually disappear,” writes Carl Benedikt Frey, the codirector for the Oxford Martin Programme on Technology and Employment. “Retail is one industry in which employment is likely to vanish.”
Benedikt Frey, who works at the University of Oxford’s policy school, makes the prediction in the latest note in Citi’s “Technology at Work” series, circulated to clients this week. The third paper in the series, which runs to over 100 pages and is authored by academics like Benedikt Frey and Citi analysts, looks at the impact of automation and e-commerce on retail.
Benedikt Frey and his colleagues focus on the implications for employment in the sector. They estimate that 80% of jobs in transportation and logistics are at risk from automation, as the rise of self-driving trucks and increased warehouse automation eradicate delivery and fulfillment jobs.
Almost two-thirds of cashier and sales jobs are also at risk of disappearing due to technology, Citi and Oxford argue. They point to innovations such as Amazon’s automated supermarket, where shoppers simply scan what they want with their smartphones, and the rise of online shopping, which makes physical stores redundant.
“The rise of e-Commerce players like Amazon constitutes only the early beginnings of the displacement of traditional retail jobs in department stores and high street shops, allowing consumers to check out without encountering a single retail worker,” Benedikt Frey and his colleagues write.
If the predictions come true, millions of jobs around could be lost over the coming decades.
‘The downfall of retail employment will affect every city and region’
While automation and technological innovation can often lead to new types of jobs being created, Citi and Oxford believe that its effects on retail will be more like agriculture, mining, and manufacturing, where jobs have simply disappeared.
Low-skilled workers on shop floors and in warehouses are likely to be hardest hit. While automation and robotics are creating new types of jobs in retail, they are higher skilled roles often requiring degrees.
“The demand for low-skilled workers performing routine tasks has experienced a secular decline,” Benedikt Frey says.
More than 55,000 retail jobs have been axed in the US in 2017 alone and the British Retail Consortium warned earlier this year of a decline in the number of retail jobs in the UK as shopping moves online.
The disappearance of factory jobs has led to the devastation of many communities in areas like the so-called “rust belt” of the US but Benedikt Frey says the decline of retail jobs is likely to felt much more widely.
“Unlike manufacturing jobs which are highly concentrated, the downfall of retail employment will affect every city and region,” Benedikt Frey writes.
The academic says the developments could be a “watershed” for global labour markets, adding: “The prediction of President Obama, that, “The next wave of economic dislocations won’t come from overseas, it will come from the relentless pace of automation that makes a lot of good, middle-class jobs obsolete,” is thus likely to be proven accurate.”
Changes to the global retail industry are just beginning, Citi and Oxford add, writing: “In the last decade retail sales transacted online have gone from ~2% of total to ~8%, yet penetration of automation remains quite low.
“E-Commerce penetration varies greatly by country, and as millennials enter peak spending years the e-Commerce driver will increase, meaning that much of the disruption from automation in transport, warehousing, and logistics is yet to come.”
Last year Citi and Oxford predicted in its second “Technology at Work” note that 57% of jobs across the OECD are at risk of automation. The World Economic Forum has forecast the net loss of 5 million jobs globally by 2020 as a result of advances in robotics, automation, and artificial intelligence.
Business Insider Emails & Alerts
Site highlights each day to your inbox.