Declining job postings, increasing layoffs and vacant storefronts. By looking at the headlines that dominate recent coverage of the retail industry, the casual observer could easily buy in to the notion that retail is dying. Nevertheless, millions of consumers prepare to hit brick and mortar stores for another Black Friday to begin filling their holiday shopping lists. And millions more will follow suit online a few days later for Cyber Monday.
Speaking with managers on the ground reveals an entirely different picture than what headlines portray. It's not retail itself that is failing in the digital economy. Instead, it is the metrics by which we measure retail success that lag behind.
The National Retail Federation projects holiday sales figures for 2017 to increase to nearly $682 billion, which would mark a 4 percent rise over last year's record figures. But critics continue to point to other data points, namely the continued drop in seasonal positions. Seasonal hiring peaked in 2013, at 764,000 new jobs, but has dropped precipitously in the years since. This year, the federation predicts only 500,000-550,000 seasonal positions, down from 570,000 last year. The correlation drawn here is that fewer hires inherently means lower demand.
But not all jobs are created equal, and the positions created today are vastly different from those a decade ago. Retail jobs now aren't just cashiers, shelf stockers and warehouse workers. These are the visible positions that everyone sees as they go about their holiday shopping. As they drop, it's noticeable.
What goes unseen is the tremendous resources stores are dedicating on their backend operations. Target announced earlier this year a $7 billion plan to improve the customer experience both in-store and online. In order to do this, they'll need web and app developers, marketing experts, supply chain managers, business analysts and several other higher paying positions. It's these positions that are taking the place of seasonal employees.
As an instructor, I often encourage my students to look at the job postings on the National Retail Federation's website. This provides a better glimpse at just how varied the positions are today, and the pressing needs retailers face. It's no longer the low-pay, entry-level positions that previously occupied these pages. As with other industries, artificial intelligence, robotics and other new technology will continue to reshape retail, and it will demand thoughtful professionals to implement them in ways that help customers.
Secondly, vacant storefronts are all too common and have come to epitomize the "retail is dying" narrative. However, they are not a victim of trends happening now so much as they as are obvious reminders of past mistakes. Throughout the last half century, American consumerism ballooned and a frenzy of malls and shopping centers opened through the 1980s.
In those days, people weren't calculating the right size of space per person and the boom resulted in the U.S. being a tremendous outlier in retail space. In 2014, the U.S. still had more than six times the square footage of retail space than did other Western countries like the United Kingdom, France, Spain and Germany. With nearly 24 square feet per person, compared to less than four square feet per person, there was bound to be some regression to the norm, and it's compounded by the fact that organizations are growing more cognizant of their space, and how to maximize every inch.
The consumer buying experience is growing increasingly more complex, but the metrics to gauge them have remained largely unchanged. It's time to retool the lens through which retail is viewed, because what we have now distorts reality.
Frankly, retail is booming. While so many have proclaimed retail DOA, experts are preparing for a record holiday spending season, as consumers continue to open their wallets.