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Retail market tightens

By Jan Teague, President/CEO

I read with interest the new challenge of finding warehouse workers.  The Wall Street Journal reported this week that with the growth of online sales, more warehouses are being built.  This means more warehouse workers are needed.

The challenge is finding people at the pace they are needed.  It turns out that right now an online warehouse uses two to three times as many workers as a traditional warehouse.  The online warehouses need to fill the orders faster to meet customer expectations for turn-around times. Amazon was mentioned saying it plans on creating an additional 25,000 jobs over the next year to work in its warehouses.

With scarcity and rising labor costs, retailers are motivated to pick up the pace of automation.  In the meantime, companies are trying to keep their employees by offering more perks such as more flexible work shifts.  When I read that, I wondered how it would work in Seattle, where flexible work shifts are discouraged.  Some warehouse operators are compressing work shifts so an employee can work 36 hours in 3 days.  They hope to lure college students, parents who want to work fewer days, or retirees.

The article goes on to say that demand for workers is greatest in growth areas where retailers are trying to fill more customer orders.  Warehouses would be located in close proximity meaning more workers would be needed.

As I thought about this for Seattle, I wondered if its future might be that fewer stores would be needed.  Will the brick-and-mortar stores not be able to compete with the changing nature of online competition and its drive to get customers their orders faster and faster?

I recently reported on automation taking more jobs out of the retail equation given higher labor costs.  I can envision a warehouse-centered retail industry in the future and I’m growing concerned for our brick- and- mortar stores.  What will they do to continue to compete in such a rapidly changing retail climate?

I am reminded that retailers are a tenacious bunch and very adaptable.  It will be fascinating to watch them evolve. It may be that retailers become more entertainment focused to give unique experiences to their customers.  This has been the industry’s edge in the past and a reshaping of that customer experience may be its best opportunity.

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