Electronic shopping is one of the key components of the nonstore retail trade industry. Considering that more Americans are buying that pair of jeans, screwdriver set, or television online, one would expect employment to be rising in electronic shopping and the broader nonstore retail industry. Yes, electronic shopping is experiencing dramatic employment gains. However, this growth is not sufficient to sustain employment in nonstore retail, as the other major components of the industry are trending downward. On the other hand, national growth in electronic shopping sales is allowing the broader nonstore retail industry to expand its share of total retail sales.
Nonstore retail can be broken up into two categories: direct selling and distance selling. Direct selling was once a popular form of retail sales. This sector of retail trade depends on the sales agents reaching out to customers directly, often in their home or place of business, as happens in traditional door-to-door sales. Today, distance selling is the more common form of nonstore retail operation. Distance selling is when the exchange of goods or services is not done in person; instead it is done over the phone, on the internet, through catalogues, or vending machines.
Within nonstore retail, there are four main industries including: mail order houses; electronic shopping; vending machine operators; and direct selling. Electronic shopping and vending machine operators are self-explanatory; however mail order houses warrant further explanation. According to the U.S. Census, mail order houses are "establishments primarily engaged in retailing all types of merchandise using mail catalogs or television to generate clients and display merchandise." Most notably these establishments include home shopping television networks (infomercials) and the old Sears, Roebuck & Company catalog.
Oregon's nonstore retail employment peaked in November 2000 with 10,900 jobs. Since then, employment trended downward. There were approximately 25 percent fewer jobs in the industry by November 2012.
In 2012, nonstore retail employment in Oregon represented approximately 0.47 percent of total employment in the state. This is only slightly higher than the national average of 0.40 percent, but less than our neighbors to the north. Washington's concentration of nonstore retail employment (0.73%) is much higher than Oregon's due to their larger concentration of electronic shopping employment.
Oregon's nonstore retail employment is concentrated in just a handful of counties. The highest employment concentration is in the Medford MSA (Jackson County) where employment is nearly seven times more concentrated than at the state level.
Nonstore retail's share of total retail employment in Oregon is on the decline. This decline is due to employment losses in mail order houses, vending machine operators, and direct selling. However, electronic shopping experienced an average annual growth rate of 14 percent between 2007 and 2013. The growth occurring in electronic shopping is masked by the losses in other components of nonstore retail. For instance, the combined average annual employment in mail order houses, vending machine operators, and direct selling shrank by 351 jobs between 2011 and 2012. During that same period annual average employment in electronic shopping increased by 300 jobs (Graph 2).
The growth in electronic shopping is quite impressive when considering the time frame during which much of this growth occurred. Unlike almost every other industry in Oregon, electronic shopping experienced rapid expansion during the Great Recession in 2008, and that growth continues to the present day. In January 2008, there were 1,141 Oregonians employed in electronic shopping. That number jumped to 2,201 by January 2013, growth of 93 percent in just five years.
This surge in sales share is due to the increasing popularity of electronic shopping. Since the early 1990s the internet revolutionized the way people purchase goods and services. In fact, electronic shopping and mail order houses accounted for $325 million of the $413 million nonstore retail sales in 2012. The reason why nonstore retail's share of total sales increased while the share of employment remained flat is likely due to the fact that electronic shopping is less labor intensive than traditional retailing. An electronic shopping company can handle much greater customer traffic with fewer employees than a traditional retail store. In addition, prospective customers are not limited to a specific geographic area; instead electronic shopping companies can reach customers across the country or world, resulting in much higher sales potential.