The retail industry accounts for approximately 11 percent of the workforce in the United States today, but advances in robotics appear likely to cause those numbers to change, or at least evoke a shifting definition of what it means to work in retail settings.

On the one side, robots can increasingly do jobs that previously had been left to human workers, suggesting reduced employment opportunities for workers. For example, Walmart has installed Cash360 machines in nearly all its stores. The machines count cash drawers more quickly than human workers could and make immediate deposits, increasing the efficiency of the stores’ accounting operations. As a result, many of the accounting employees who previously staffed the back offices of the retail stores are finding that their jobs no longer exist.

For some workers, companies encourage lateral moves, such that they might be offered a customer service job on the floor instead of working in the back office. According to a representative of Home Depot, the expanded uses of self-checkout technology benefit everyone, because they free up employees to help customers in the store, rather than tying them to the checkout counter. However, not all retail employees would welcome such a change. As one back office worker explained, “I never worked on the floor … and I had no desire” to start doing so. Accordingly, Walmart lost approximately 500 employees who quit rather than change positions when it shifted to using the Cash360 machines.

Although both retailers and the companies that innovate the supportive technology insist that their goal is not to replace workers, an analysis of the trends indicates that they have done just that. For example, Walmart still accounts for the jobs of nearly 1.5 million people in the United States. But measured by the ratio of workers per square foot of retail space, it employs a 15 percent smaller workforce than it did just a decade ago. Nationwide and across all retail firms, approximately 71,000 retail jobs have disappeared in the past year.

But on the other side, some employment sectors are growing, and robots have yet to limit the number of jobs. For example, the vast increases in e-commerce created the need for approximately 262,000 new warehouse workers who could pick items from shelves, pack them appropriately, and ensure their accurate shipment to consumers’ homes. Thus far, robots have not been able to achieve such accuracy, because of the difficulty of writing robotic algorithms that allow artificial intelligence to understand the difference between unique flavors of the same type of chips or recognize when an item has been misplaced on a warehouse shelf. Because e-commerce logistics operations often deal with millions of product offerings, with inventories that change constantly, the point at which robots will replace warehouse workers is still somewhat far in the future.

And yet, it also is approaching. There is little doubt that retail operations will continue to feature robot “workers,” who are less expensive, more reliable, and less varying in their performance than human employees. The entire supply chain is likely to be affected: In-store self-checkout operations are already in place; self-driving trucks to transport products are close to appearing on the roads. Furthermore, Amazon is leading the drive to get robots that can pick products from shelves, so even those warehouse jobs might be at risk. Where will the human workers go then?

Discussion Questions:

1. What are the advantages and disadvantages of replacing humans with robots, from retailers’ perspective?
2. If you were running one of the retailers faced with replacing humans with robots, would you do it? Consider the retailing environment and the various stakeholders in developing your answer.

Source: Sarah Nassauer, The Wall Street Journal, July 19, 2016. See also Brian Baskin, “Next Leap for Robots: Picking Out and Boxing Your Online Order,” The Wall Street Journal, July 25, 2017.