What Digitization and Higher Pay Means for the Future of the Retail Workforce

Originally posted by Stephanie Otey on MarketScale.

Between the coronavirus pandemic, automation and online ordering, the job of a retail worker has vastly changed so what will 2021 look like for the retail workforce? Will it be business as usual?

While 2020 proved that retail workers are essential to the economy and society, their employers may not consider the same to be true with their future business operation plans.If retailers want to remain competitive in the growing digital space, they will have to invest in their employees’ learning and development needs as well as their pay.

Ocado Limited is one of the world’s most technologically advanced online retailers. Even before the pandemic accelerated the digital workspace, Ocado employees were collaborating with robots to package groceries. “None of the 13,000 people that work for Ocado would have a job, myself included” said Chief Technology Officer, Paul Clarke, to the Economist. “If it wasn’t for what we do with technology and automation. As we’ve found new ways to automate processes, the number of people working for Ocado has only ever increased because of the ongoing growth of the business.” 

While Ocado has created more jobs internally with its technology, it may soon change the work of their partners’ in-store retail employees. Instacart is revamping their arrangement with Kroger to the “Partner Pick” model resembling the one it already has in place with Sprouts Farmers Market. By mid-March, Kroger expects to transform how its workers select in-store orders with Ocado’s picking software. However,  Insight Grocercy Business reports that, “Kroger declined to address how or if the forthcoming Ocado picking software rollout might affect jobs associated with Instacart”.

New research from UC Santa Cruz further quantifies the effects the pandemic has had on the nature of the retail workforce. The report shows that 45% of households have ordered groceries online during COVID-19, many of which for the first time. On the upside, it has improved the quality of new jobs created from this transition but usually delivery and fulfillment work is performed by independent contractors hired by the platform so that means lower pay, no employment protection or access to benefits. This is a major concern as many retail workers engage in the on-going minimum wage debate leveraged by President Biden’s proposal to raise the current federal minimum wage to $15 per hour.

The concern is that this would likely motivate retail companies to further automate these minimum wage jobs or contract them as needed to lower their labor costs, which would also lower the amount of jobs and hours available. Between the pros and cons of higher pay and the digital advancements in the retail workflow, the future of the retail workforce continues to evolve.

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