A new report from Citi and the Oxford Martin School explores the wide-ranging impact that online shopping will have on retail jobs worldwide in the near future.
Technology at Work v3.0: Automating e-Commerce from Click to Pick to Door builds on 2013 research by Carl Benedikt Frey and Michael Osborne which found that 47 per cent of US jobs were at risk of automation over the next two decades. It’s the third in the Technology at Work series, with previous reports published in 2015 and 2016.
Key areas of analysis in the report include:
• Jobs in transport, warehousing, and logistics have above-average susceptibility to automation: the report estimates show that 80% of jobs in retail transportation, warehousing, and logistics are at risk as a result of recent technological developments, and another 63% of sales occupations are at risk. These figures are higher than the 47% of total jobs that are potentially automatable in the United States.
• Growth in online shopping is the main driver of warehouse automation, and this will increase with greater broadband and mobile device penetration. The report looks at the online penetration of retail by category and geography and at the implications for the retail sector, how retailers are adapting to cope with online shopping, and ultimately what impact further automation may have on the retail landscape.
• Cross-border online shopping looks set to stay, further driving warehouse demand. DHL estimates that 15% of e-commerce is cross-border, and is set to increase to 25%, as the cost of carrying inventory has to be balanced against the cost of shipping cross-border. There is also a broader debate on the location of manufacturing when factories are fully automated. The CEO of Adidas commented in April 2017 that large-scale reshoring of manufacturing jobs from Asia back to the west is a “complete illusion” due to entrenched supply chains in Asia.
• Retail space will be impacted in two ways: First, is the already-visible decline of the high street and mall footprints, but second is in how the need for warehouses near or in dense urban areas is changing how planners look at zoning land. The report examines some emerging innovations and concepts that have the potential to significantly impact property markets, from the integration of industrial and residential land uses in significantly land-constrained markets, to the development of vertical warehouse solutions and even towards flexible warehouse solutions along the lines of AirBnB.
Dr Carl Frey, Co-Director of the Oxford Martin Programme on Technology and Employment, and Oxford Martin Citi Fellow, said: “Retail is one industry in which employment is likely to vanish, as it has done in manufacturing, mining and agriculture.”
The Oxford Martin Programme on Technology and Employment is a research programme established in January 2015 with support from Citi. It has been created to investigate the implications of a rapidly changing technological landscape for economies and societies. The programme provides an in-depth understanding of how technology is transforming the economy, to help leaders create a successful transition into new ways of working in the 21st century.
Citi regularly produces Global Perspectives and Solutions (GPS) reports. As part of a broader long-term research partnership between the Oxford Martin School and Citi, co-produced GPS reports examine the key global challenges and opportunities of the 21st Century and their implications for business and finance audiences.
- Read the full report ‘Technology at Work v3.0 Automating e-Commerce from Click to Pick to Door’
- Find out more about the Oxford Martin Programme on Technology and Employment.