Future requirements for expertise in retail

2016-12-02

Retail is in a constant state of flux whereby format and form are updated on a continuous basis. The changes affect the conditions faced by retail companies and employees. Over the past few decades, retail has primarily changed due to urbanisation, and today almost everyone has access to a car of his or her own. Together with increased competition from both Swedish and international companies, this has pushed development towards retail hubs with larger stores, shopping centres and supermarkets. We are currently in the middle of a digital development that is positioning retail for new opportunities and challenges.

Every fifth young person works in retail
The retail trade in Sweden currently has around 280,000 employees, which corresponds to approximately 6 per cent of all employees. Around one in twenty companies is active in the retail trade in Sweden, which means the sector is an important employer. Retail also provides many young people with their first job. Just under a third of the people who work in retail trade are under the age of 24, and 15 per cent of all of the people who are employed and between 16 and 24 years of age work in the sector. Most of the employees in retail have no more than an upper secondary education. The long hours of operation and irregular working hours found in retail are perfect for students or others who have another occupation as well.

More effective retail
The trend towards larger store formats has caused sales to increase at a quicker rate than the number of employees, and sales per employee in both fast-moving consumer goods (FMCG) and consumer durables have also increased. Since 1997, sales per employee and year in the retail trade have increased from SEK 1.7 to 2.6 million. The question is how much longer big stores can continue to be built that increase sales per employee. For instance, we see a change in the electronics sector, where previous expansion primarily took place through big stores. Now players such as Webhallen and Kjell & Company are emerging with smaller store formats that focus on customer contact, but which carry a large stock.

Retail trade being digitised and e-commerce growing – requirements for expertise are changing
The current digitisation means that it is possible to find information and shop from wherever we are, at any time of the day and basically from anywhere in the world. This change brings about entirely new conditions for companies in the retail trade. At the same rate that e-commerce is taking business from the physical trade, employees are also affected. Both the electronics sector, which is one of the largest online, and the book sector, which is the sector that has the highest percentage of its sales online, have fewer employees today compared with 2008. The number of employees in retail may be affected at the same rate that other sectors digitise. The digital development also affects what know-how is required at the workplace. E-commerce companies do not need the same composition of personnel as physical stores. E-commerce companies with stock in Sweden require warehouse personnel, technicians and operational supervisors to a larger degree than they require salespeople and store staff. At the same time, the currently ongoing automation probably also means that more stocks will become robotised,  which will in turn increase demand for highly educated employees with expertise within technology and data. At the same rate that consumers are using e-commerce to shop more and around the clock, they want to receive their products as quickly as possible, which means that the need for employees who work on deliveries day or night will grow. Retail trade companies might even begin delivering right to the buyer’s home as well as take responsibility for the entire buying experience. This means that more jobs will be linked to the retail trade, and inconvenient working hours could continue to provide young people with their first job. In addition, retail will be faced with e-commerce being moved abroad to companies that have few or no employees in Sweden. For example, the popular e-commerce company Zalando has its stock in Germany and does not have any employees in Sweden. How quickly will development be and how many fewer people will be employed when we buy from both Swedish and foreign e-commerce companies? How many new jobs with new expertise will be created and how important will service and delivery aspects be in retail trade?

 Future prospects
If retail as a whole follows the trend found in the book and electronics sectors, the number of employees will decrease in the future. This is due in part to automation and in part because we are buying more from abroad. Even if this does not mean that personnel will disappear from the stores, both the stores and the role of employees will probably be different than today. Physical stores already offer added value in the form of services and service that e-commerce companies are unable to provide. It is here that personnel will play an important role in the future as well. As the requirements companies have for expertise change, specific educations will be sought after to a greater extent, and more people with a higher education will consequently be employed in retail trade. Increased e-commerce with deliveries at all times during the day or night can also create jobs with irregular working hours.

In order to stay competitive, many companies will begin to offer both physical and digital retail, and the ones that become adept at integrating various trade channels will probably continue to have a good chance to remain relevant, grow and employ personnel. Furthermore, internationalisation means not only that competition will increase in Sweden, but that Swedish companies will also have the opportunity to grow outside of Sweden.

Storesupport and HUI Research collaborated to produce this report.