Retail Trade, Where Change Is the Only Constant

by Ainoura Oussenbec

August 30, 2018

A marketplace for exchanging goods and supplies has been at the center of human settlements for ages. Today, retail trade is a multi-billion-dollar industry providing more than 15.9 million jobs in the U.S., according to the Bureau of Labor Statistics. Retail trade includes a variety of establishments and activities selling products – for instance, cars and groceries – as well as after sale services such as cleaning and repair. Retailers sell their products and services directly to consumers, which may include individuals and businesses. There are two types of retail establishments: store and non-store retailers. Retail stores have fixed, brick-and-mortar facilities, while non-store retailers sell via websites, catalogs, kiosks, stalls, and door-to-door.

Employment Growth Steady in Oregon’s Retail Trade

In 2017, the number of retail trade establishments in Oregon was 13,910 with 210,319 jobs, about 11 percent of total employment. The number of retail jobs can fluctuate due to seasonal factors, and urban areas have a higher concentration of retail businesses and jobs. Retail trade’s largest employers are:

  • Food and beverage stores; 43,404 jobs
  • General merchandise stores (including department stores); 41,461 jobs
  • Motor vehicle and parts dealers; 26,472 jobs
The most common retail jobs are retail salespersons, cashiers, and stock clerks, while in online establishments the key job is customer service representatives. Retail jobs typically require only a high school education and no experience. The pay usually starts at or close to minimum wage with the average wages at about $14 per hour, depending on location and type of retail. The lowest overall wages are reported in groceries, clothing stores, and gas stations and convenience stores. However, new car dealerships, RV dealers, and floor covering stores can offer $24 per hour on average – some of the highest wages in retail trade.

Oregon does not have a significant number of non-store retailers. There are 735 units with only 7,322 jobs but the average wages, at $24 per hour, are higher than in most of traditional retail. Among Oregon’s non-store retailers, electronic shopping and mail order houses provide 86 percent of all non-store jobs.

During the last recession retail trade employment dropped by 9 percent between 2007 and 2010, which was not as deep a decline as in construction and manufacturing. Retail employment exceeded the pre-recession high by 2015. Both employment and number of establishments (red line in the graph) increased steadily in the past few years.

Not all segments of retail trade behaved in the same way during and after the recession. For instance, in food and beverage stores employment decreased during the recession by less than 2 percent, a small adjustment considering the magnitude of that recession. This retail segment has steadily gained jobs over the years, and even the number of food related stores increased since 2010. Oregon’s strong population growth is likely a major contributor to increased demand for store locations.
As a contrast, the motor vehicles and parts retail establishments suffered a 22 percent employment decline during the recession, and the industry has yet to recover the losses. Unlike groceries, buying cars is a discretionary expense for consumers. This kind of large purchase can often be postponed until more favorable economic conditions.

Change Is the Only Constant in Retail Trade

The retail industry has always been fast on its feet, closely following consumer demand fluctuations. Today, competition in the retail industry has become global and fierce. In addition, every type of retail trade has been changed to the core by technology, automation, and the Internet. About 60 percent of U.S. retail sales involve the Internet, according to Forrester Research. Consumers either buy products via the Internet or research using the Internet before buying in stores.

In August of 2016, Forbes covered the significant changes occurring in retail in the piece The Future of Retailing: the Technology Revolution Is Now. Merchants are no longer the driving force for retailers. Now the customers are more in charge, and they want products and services that match their specific needs. The traditional retail models such as malls have seen dramatic declines in foot traffic for years, which led to business closures and job losses.

How to Survive the Internet

One retail business in downtown Medford seems to have weathered not only the malls and big retail chains but even the almighty Internet. Schroeder’s Antique Furniture and Collectibles has been in town for 28 years. Located in the heart of Medford, this is the place to shop if you are looking for unique, quality furniture and antiques. The owner, George Schroeder, is also one of the premier appraisers in Southern Oregon, possessing a rare skill set acquired by lengthy experience. Over the years, sellers and customers alike have come to trust Mr. Schroeder’s expertise and integrity, which has been, no doubt, one of his secrets for lasting success.

Many small businesses came and went during the time the Schroeder store has been a solid presence in the downtown core. Medford downtown used to be the center of southern Oregon commerce until the arrival of the Rogue Valley Mall and other shopping centers that took commerce outside of the city center.

In addition, many small retail businesses today have to deal with the potential threat of the Internet and its giant players like Amazon, Walmart and the like.  Contrary to the common views, Mr. Schroeder does not see the Internet or even the mall as something negative. “You can use any excuse to close your business and you can’t blame Amazon,” says Mr. Schroeder. “But if you have the right product for the right price plus great service, customers will come by.”

Years ago, Mr. Schroeder was trained by someone who bought and sold merchandize for 50 years. With no formal training available in this the complex world of antiques and collectibles, there is no substitute for years of hands-on experience. Mr. Schroeder believes his store has a bright future in spite of all the market changes, because some customers still want to have a traditional, tactile form of shopping experience. No amount of pictures can replace the chance to sit in a solid wood chair, look at rarities, while hearing the stories behind the collectibles and their makers. In fact, in a world of mass produced household goods, there seems to be an enduring appreciation for something unique, well made, and unlike anything else out there.

Retail in Future – Changes Are in Store

Employment growth moderate
. According to Oregon Employment Department’s 2017-2027 employment projections, the job growth in Oregon’s retail trade is expected at 9 percent, lower than 12 percent for all industries. The few retail industries where job growth is estimated at 12 percent to 14 percent are food and beverage stores; building materials and garden supply stores; and general merchandise stores.

Technology rules. While it is impossible to predict the future of the retail industry, analysts agree on a few trends that will ultimately influence employment trends. Thanks to rapid changes in technology, consumers will be able to shop anytime and anywhere.  Retailers will continue to use technology to cut costs, labor included. For instance, self-checkout systems and mobile phone based click-and-collect systems are appearing in larger stores already. Click-and-collect means that customers can buy groceries via smart phones, to be bagged by the store staff and made available for pickup when convenient for the customers.

Multi-purpose malls. According to “The Mall of the Future Will Have No Stores” a Wall Street Journal article by Esther Fung, declining foot traffic is already changing mall concepts around the nation. Some malls are becoming mixed-use facilities with churches and non-retail businesses filling the void left by retailers who were forced to shrink their footprint and workforce. Other ideas include transforming poorly performing malls into multi-purpose enterprises with selected retail stores supported by restaurants, fitness facilities, and even residential housing.

Still room for traditional retail. However, there still seems to be plenty of room for traditional retail, especially for everything unique, gift-able, and collectible. Such stores have to be located strategically, offering merchandise not easily found online as well as impeccable service and expertise. Local stores able to provide a complete shopping experience have the potential to maintain their place in customers’ hearts and wallets.

Profound market changes may eventually result in fewer jobs in traditional retail trade, though different employment opportunities may be created in the Internet-based retail companies. One big challenge of Internet-based retail is that these online jobs tend to be concentrated in some places and not distributed across communities like traditional retail. Future market trends may require the retail workforce to become more computer savvy and better trained overall. While Internet commerce can only grow in the foreseeable future, the hope is that there will be plenty of great local stores left for us to enjoy for many years to come.

 


Our Latest Articles Our Latest Articles

Latest Items