Article

Retail's new industrial revolution

Self-service technology is permanently changing the landscape for the retail worker.

April 10, 2013

By Doug Stephens

Earlier this year while at the National Retail Federation conference in New York, I listened to Walmart U.S. President Bill Simon talk at length about how retail was still a great career for young people to embark on. He reflected on his own career path, and that he put himself through college on the $2 he earned an hour as a young man, implying that today's young retail worker should be able to do the same.

Mr. Simon shared his firm belief that one could still start on the ground floor at companies like Walmart and work their way up. In fact, he said, it was still entirely possible to start as a cashier and ascend to the executive ranks.

It all sounded so nostalgic and inspiring.

A little more than a month after Mr. Simon's talk, however, Walmart announced that it was adding 10,000 self-checkout lanes in its stores in 2013. Why? Well according to Walmart's own figures, every second of delay in the checkout aisle amounts to nearly 12 million dollars in cashier payroll. So, time being money and money being everything, self-checkout, they decided, was the clear path forward.

And if that weren't a sharp enough juxtaposition to Mr. Simon's keynote from a mere month earlier, the retail giant has even more recently announced expansion of Scan & Go, the smartphone based self-scan and pay technology that they began testing in 2012, allowing customers to scan items while shopping and pay for everything at self-checkout kiosks by scanning one single barcode.

The naked truth is that cashiers won't become executives.

Because soon there won't be any cashiers — and not just cashiers — greeters, merchandisers, inventory counters and store cleaners too. Technology is poised to replace all of them for two reasons: First, because it can; and second, because it must.

Digital, mobile, virtual and robotic technologies are quickly progressing to the point where they now pose a legitimate threat to anyone whose work is largely repetitive and non-dynamic in nature. And because retailers are increasingly challenged in growing top-line revenue, there's little alternative but to substantially slash operating costs — and people are the easy place to start.

This is hardly a phenomenon exclusive to Walmart. Walmart only tends to be the most visible of battlegrounds. It applies to any retailer in the developed world that currently employs people who don't add significant and tangible value. Any employee who doesn't either deliver cost savings, generate revenue or optimize profit will be a moving target for any number of technologies — robots, apps, kiosks, virtual assistants and more — and much sooner than we might think. The Hointer denim store in Seattle provides a glimpse of what this people-less retail future might look like and to be honest, it doesn't look bad.

And spinning yarns about cashiers taking the corner office isn't going to get us anywhere. This is no longer a debate about the opportunities that do or don't exist for hard working, underpaid retail workers. Let's call it what it really is. It's the end of the era in which retail workers are paid to punch buttons, enter numbers and count widgets — and no amount of nostalgia will reverse that.

It's a new industrial revolution and the era of the clerk is over.

Doug Stephens is author of the book, The Retail Revival: Re-Imagining Business for the New Age of Consumerism. He is also the consumer technology contributor on App Central, as well as the retail contributor for CBC Radio.

Read more about self-service technology in retail.