Occupation Spotlight

The Retail Fallout: What’s Next for Brick-and-Mortar Retail Workers

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Brick-and-mortar retail stores are struggling. Department stores are closing. Walmart and other big-box sellers are on the defensive. And, on Wall Street, retail stocks are sinking. All the while, Amazon and other ecommerce companies are surging.

If brick-and-mortar retail is on the decline, what industries and jobs can the industry’s workers move into? Using Indeed data on the search patterns of job seekers—culled from tens of millions of resumes—we can identify the occupations retail workers click on most, whether their skills match up and how much they’ll be paid.

Many brick-and-mortar retail workers seem to be ready to bail on the industry entirely, but they face a stark choice: The best-paid jobs for them might be in ecommerce and warehousing, but those positions often require higher levels of education and skills than traditional retail jobs. Alternatively, there are plenty of jobs with compatible skills in the growing restaurant industry—but the pay is worse and the hours can be a pain.

Retail struggles

The year-over-year change in brick-and-mortar retail jobs turned negative in March 2017—the first time since August 2010—according to the Bureau of Labor Statistics (BLS). Through September 2017, employment was down 1.1% year-over-year.

For detailed subindustry comparisons, we used the Quarterly Census of Employment and Wages (QCEW). However, this data only goes through the first quarter of 2017 and doesn’t capture the recent decline. According to the QCEW, brick-and-mortar jobs were up less than 0.3% from the first quarter of 2016. Ecommerce and warehousing jobs did much better, up 6.2% and 11.2% respectively during the same period. And jobs in food services and drinking places—restaurants and bars essentially—rose 2.0%.

Who are retail workers and what are their options?

So who works in brick-and-mortar retail? Below are the top 20 brick-and-mortar retail occupations, according to the BLS plus the percentage of all workers in those occupations who work in brick-and-mortar stores. For example, not all cashiers work in brick-and-mortar stores—only 64% do.

Clearly many of these workers can move to other industries—and, in fact, they’re doing so. This year’s fall in brick-and-mortar retail employment has been offset by gains in other industries. Overall job growth before hurricane-distorted September averaged 171,000 per month. The fact that retail workers can switch industries is reflected in a revealing statistic: The September unemployment rate for the retail industry was 4.4% before seasonal adjustment. However, that was partly because extreme weather forced many retail workers to leave the labor force entirely, which means they’re not officially counted as unemployed. The retail unemployment rate fell 0.2 percentage point from August 2016 to August 2017—and over a percentage point from three years ago.

So what jobs are workers in retail qualified for?

Ecommerce jobs require higher skills than traditional retail

What marketable skills do brick-and-mortar retail workers have? Each job posting on Indeed can be parsed and each skill requested by an employer can be tagged. Looking at brick-and-mortar retail job postings on Indeed, we can quantify the skills demanded by employers. Those skills include customer service, sales, managing, merchandising, cash exchanging, and so on. The table below lists the top 10 skills tagged in Indeed job postings for brick-and-mortar retail positions, as well as for ecommerce, warehousing and restaurant jobs.

We can then compare retail skills to the ones sought by employers in other industries. For example, ecommerce and warehousing job skills greatly overlap with retail job skills. Whether it’s customer service, sales or supervising, the top job skills required are often similar.

But it’s in the skill requirements further down the list where ecommerce and warehousing jobs separate from traditional retail. For instance, Microsoft Office proficiency is one of the 20 most frequently required skills for ecommerce and warehousing jobs, but it’s nowhere near that important in brick-and-mortar retail.

And while skills may overlap some, the same is not true for education. A far-higher percentage of ecommerce and warehousing job postings require or prefer a bachelor’s degree. And it shows in the earnings of these workers: The median hourly wage for retail workers not in brick-and-mortar stores, of which ecommerce companies are a subset, is $24.43, according to the BLS, well above the $18.27 median hourly wage in retail overall.

There is one growing industry where the skills of retail workers are almost a perfect fit: restaurants and bars. In fact, among the top 20 to 30 skills, they’re nearly identical. If you can sell a suit, you may also know how to build a check at the corner bistro. But the dilemma for retail workers is that many restaurant jobs are low-paying. The industry’s median hourly wage is a paltry $14.00.

So where are retail workers actually searching?

Retail workers are searching for jobs in other industries

By mining information on tens of millions of resumes uploaded on Indeed’s US site, we can identify brick-and-mortar retail workers’ job search patterns.

The table below shows the top 10 jobs clicked on by Indeed job seekers who we believe are working in brick-and-mortar retail, along with the median hourly wage from the BLS. These retail workers are looking at higher-paid occupations such as customer service or sales representatives, but also lower-paid ones like clerks, receptionists, and cashiers.

Brick-and-mortar retail workers are searching for jobs largely compatible with their skills, but mainly outside their industry. For example, only 10% of customer service representatives work in brick-and-mortar retail stores. Many more work for insurance and finance companies, manufacturing businesses or in the healthcare sector. These jobs generally pay better than occupations concentrated in retail, like cashiers and retail salespersons. And, perhaps most importantly, they’re projected to grow 5% between 2016 and 2026.

No clear path for retail workers

Brick-and-mortar retail workers face a dilemma: With their industry in trouble, they may be thinking about a job switch. The obvious alternative is ecommerce and warehousing—a growing and well-paid industry. But this industry isn’t a perfect match because the jobs sometimes demand higher levels of skills or education than retail workers typically have.

Restaurant jobs are more compatible—and those are booming too. The catch is that the pay is often worse than in the industry they’re fleeing—and the hours are irregular to boot. Instead, retail workers seem to be looking for work outside the retail and restaurant industries altogether, such as customer service representatives in other sectors.

To be sure, it’s by no means clear that brick-and-mortar retail is done for. Stores will be with us for a long time to come and ecommerce still has a ways to grow. But, for brick-and-mortar retail workers, the road ahead looks bumpy and uncertain.


Methodology

To define brick-and-mortar retail, we start with the industries in the Retail Trade sector. Then we cut several industries that don’t correspond to our informal notion of brick-and-mortar retail, such as Motor Vehicle and Parts Dealers, Gasoline Stations and Nonstore Retailers.

Each job seeker’s current or last job title is normalized, and then mapped to an industry. The search behavior of job seekers is then aggregated and weighted by a job-to-industry probability that signals the likelihood that a worker is in brick-and-mortar retail.

To compare the situation of brick-and-mortar retail to ecommerce and other subindustries, we use more detailed data from the Quarterly Survey of Employment and Wages (QCEW), last updated in the first quarter of 2017. Thus, the detailed subindustry analysis comes from a different dataset and covers a different timeframe than the main analysis.

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