As of August 8th, 2022, U.S. retail employment is at essentially the same level it was in June 2018, eighteen months before the pandemic, at more than 15.8 million employed. There was a precipitous drop in retail employment at the start of the pandemic in March 2020. It fell to 13.3 million from 15.5 million employed in one month. A V-shaped recovery followed it. By August 2020, retail employment eclipsed 15 million and has been steadily recovering, including jobs migrating online (see the chart below of retail employment of BLS statistics from the St. Louis Fed).
These macro-retail employment statistics do not show a definite shift in retail employment from brick-and-mortar establishments to online retail. The driver was the change in consumer buying habits. Consumers were already migrating to buying online before the pandemic, but the pandemic accelerated the rush to online buying.
Retailers (and all companies for that matter, except for Amazon and others born digital) had to shift to “all online all the time immediately.” IT teams made a massive shift. Cloud service providers ramped up so companies could scale.
As the life-threatening consequences of the pandemic have eased, retailers reopened brick-and-mortar stores, but to more online savvy consumers. These consumers can discern when to shop and buy online versus in a physical retail establishment. The result is that retail jobs are steady – but there is a shift in hiring to online versus in-store associates.
Retail experts underscore the online hiring trend.
This trend was underscored when BestBuy issued this statement on August 13th: “With an ever-changing macroeconomic environment, including customers shopping more digitally than ever, we have made adjustments to our teams that include eliminating a small number of roles.”
In addition, e-commerce growth continued as the U.S. e-commerce spending in Q2 of 2022 was the fourth straight quarter of single-digit growth following the 45%-50% jumps during the first year of the pandemic based on an analysis of U.S. Department of Commerce figures released on August 17th. In addition, the year-over-year increase in online sales also outpaced that of stores for the first time since early 2021.
The National Retail Federation reported that “July sales were up in all but three retail categories yearly, led by online sales, building material stores, and grocery stores, and increased in all but two categories on a monthly basis. Specifics from key sectors include:
- Online and other non-store sales were up 2.7 percent month over month seasonally adjusted and up 18.1 percent unadjusted year over year.”
What does this mean for employment?
The result is that overall U.S. retail employment remains steady – with jobs migrating online on the rise while brick-and-mortar jobs are on the decline.
While jobs remain steady, retailers’ ability to service the online virtual customer has a long way to go.
At issue is that consumers are fickle. (No news on that.) Perhaps Walmart is a bellwether company. It reported on August 16th that inflation woes are still in place despite relief at the gas pump. Consumers are trading down.
Walmart’s Chief Financial Officer John David Rainey said, “Instead of buying maybe deli meats or beef, they’re trading down to things like canned tuna, chicken and, even, beans. We’re seeing the same thing in the quantity, where they’re trading down for smaller pack sizes that are more affordable. So instead of buying 12 items, buy six items in a pack.”
Consumer behavior shifts faster than a company can pivot. The pivot retailers want to make is to recreate the in-store shopping experience online. This requires a sophisticated analysis of consumers’ first-party data, the data a company collects directly from its customers and owns. The ultimate is zero-party data—the information a customer intentionally and proactively shares with a brand.
In an in-store setting, great salespeople know how to get signals and read what the customer wants. A good salesperson knows when the customer wants help and when they want to browse on their own.
Pristine first- and zero-party customer data alleviate cascading marketing mishaps.
As more consumers shop and buy digitally, they share more information with brands. But most retailers are wasting this valuable data and are stopped from a sophisticated analysis of customer first- and zero-party data.
First and foremost, a marketer may run an engagement campaign based on limited or incomplete data. Cohesive real-time consumer data is the key to alleviating the other marketing challenges listed below. It is the cornerstone of digital marketing, starting with the customer. First- and zero-party data is the consumer talking to the brand. The issue is whether brands can listen to and service customers appropriately – like a great salesperson.
Marketers often cannot access the data as they are beholden to IT teams. Without excellent data analysis, given the real-time nature of customer engagements, the brands show up to the consumer too little too late. The customer may have left the site amid buying. It is the equivalent of a consumer walking out of a store because they did not get help when needed.
Without excellent data, marketing issues cascade including, but not limited to:
- An overreliance on push marketing (where brands take their products and services directly to the customer), hoping consumers will take the bait.
- Knowing when and how to connect with a consumer, whether by text, social media, email, mobile app, or in-person.
- An inability to form a persona picture of consumers and adjust messaging accordingly, and not able to segment their best, most loyal customers. Without data, marketers can inadvertently send marketing messages that are out of sync. An example would be celebrating a “thank you for buying” with a consumer who just returned the said product.
Final Thoughts
Retailers must meet the consumer at the right place and time in the customer’s buying journey. It means that first- and zero-party data is king. And the information ensures that all retail associates hired online due to jobs migrating online, and in-store employees are empowered to make the customer king.
Scott McNabb is VP Revenue, Americas at Optimove, the first customer-led marketing platform.
