Every week, new signals warn us of the death of the high street. 2018 saw household names such Toys “R” Us and Maplin go bust, while M&S, Debenhams and New Look closed a significant number of stores. More than 23,000 shops are predicted to disappear in 2019. These shifts are already having a huge impact on workers. How can we ensure a future of good work in the sector?
The Retail Sector Council was established in 2018 to provide a platform for industry and government to work together to address several priority areas for the sector. To contribute to this process, the RSA brought major retailers and policy makers together through a solutions lab to design the solutions needed to meet existing and future challenges.
We focused on three challenge areas: upskilling and reskilling, survival of high streets and enabling good work. Our new report summarises this enquiry. Here’s what we found:
1. The death of the high street is having a disproportionate impact on women and regions outside of London
Retail sales continue to increase year-on-year, but more people are shopping online: data from ONS indicates that e-commerce now accounts for 19% of all retail sales, up from just 8% in 2011. Our analysis of the Labour Force Survey illustrates the impacts these shifts are having on workers:
- Between 2011 and 2018, there was a 7% decrease the number of in sales and customer service workers: a net decline of 108,000 workers, most of whom were women (75,000)
- In contrast, there was a 53% increase in the number of process, plant and machine operators: a net increase of 40,000, most of whom were men (31,000)
- In the same period, there was a net decline of 95,000 retail jobs. Particular regions have borne the brunt of this decline, including the North East, South West and East Midlands, whereas London has seen strong jobs growth (see map below)
2. Scenarios illustrate hopes and fears for the future of retail
We wanted to ground our research in the lived experiences of retail businesses, to test its validity and generate new insights relating to the future of retail. To this end, we asked a group of major high street retailers to consider the potential consequences, challenges and opportunities associated with the RSA’s four scenarios for the future of work in 2035.
The Empathy Economy scenario captured many people’s hopes for the future. ‘In-store influencers’, personal concierges aided by new technologies, could allow the sector to shed its ‘low pay, low productivity’ image problem and the high street could be renewed as a destination to visit, teeming with novel exciting experiences.
The Big Tech Economy captured people’s fears. Driverless delivery vehicles, fully automated warehouses and cashier-less convenience stores could disrupt the lives of many of the 2.8 million people currently working in retail, while the shift from ‘bricks and mortar’ shops to e-commerce could leave behind many high streets and communities across the country.
3. The sector needs a new approach to lifelong learning
Retail workers face a double whammy. They are more likely to be at risk of technological disruption than workers in other sectors but are less likely to have access to the training opportunities needed to support their transition. A 2017 study by PwC estimated that 44% of jobs were at high risk. But in 2018, as few as 16% had received job-related training in the last 3 months, compared to more than 35% in sectors such as law, education or social care.
On the one hand, there is a need to upskill these workers with both customer service skills and technical capabilities for future jobs in retail, be it personal concierge roles or drone delivery operators. On the other hand, there is a need to ensure displaced workers can leave with dignity. These workers need to be reskilled, so they can find future employment in other parts of the economy.
Participants at our solutions lab developed a sector-wide platform for lifelong learning to address these challenges. This initiative would equip workers with the broad range of skills needed for the future, as well as enable employees to more easily change jobs within their organisation and plan career moves across the sector. It would be developed in partnership with learning providers and use new technology such as digital badges that provide an open and portable way to accredit workplace learning. Retailers argued that the public sector should support their efforts here by allowing greater flexibility in the administration of the apprenticeship levy. While the sector would need to work together to conduct a comprehensive skills mapping exercise to understand future demand.
4. Agile regulation could help reinvigorate our high streets
As consumer demand continues to gravitate online, high street retailers – already hampered with increasing rents and the cost of business rates – must compete with online competitors who are able to meet demand with less workers and more agile business models. Meanwhile, high street retailers feel squeezed by a range of business costs that hamper them more than their online competitors, from increasing rents to the cost of business rates.
High street retailers need to rethink their business models. But existing tax and regulation can stymie innovation. In response to this challenge, participants at our solutions lab developed a future high street ‘sandbox’ – allowing major retailers to experiment in a deregulated environment with new initiatives that might otherwise be too risky – “a retail wild west” as one participant described it. This could see different retailers coming together, sharing data and exploring new ways to utilise technology to gain better customer insights that would help them future-proof their stores.
5. We need to promote the responsible adoption of new technologies
Technology is not just displacing workers, it is transforming management and HR practices.
Amazon has patented a wristband that sends warehouse workers a haptic shock when they move their hands towards the wrong items. Percolata uses in-store sensors and algorithms to build profiles of retail workers based on an analysis of their performance data, combining this with weather information and other signals to predict footfall and automate shift scheduling. Tesco has also experimented with scheduling software that allows workers to swap shifts and work across multiple stores.
Participants emphasised the importance of adopting tech in a way that promotes good work and wellbeing, rather than placing workers under greater strain for productivity gains. In our solutions lab they developed a ‘fair tech kitemark’ to provide businesses with guidance, incentivise behaviour and prevent a race to the bottom. The kitemark would be developed in partnership with organisations such as Living Wage Foundation and would aim to send a strong signal to consumers as to whether they are purchasing goods produced, as one participant put it, by “free range workers”.
This was the first time that the retail sector had come together to co-create solutions for the future of work, building collaboration in an otherwise highly competitive part of the economy. Our call to action is for the sector is to take forward the prototypes outlined in the report: to build coalitions, test and iterate solutions, and scale what works. We hope to continue to be part of the process – to ensure a future of good work in retail.