The Modern Retail Landscape
Recently, my son had a great shopping experience with one of his favorite brands, JackThreads. After an initial search for a hip backpack turned up empty, JackThreads sent him a personalized email 24 hours later to recommended backpacks suited to his "hipster" preferences. Just two years ago he would never have received such a personalized and helpful email. Retail industry watchers say they expect retail to change more in the next five years than it has in the last 100, and this is just one example of how.
Driving this evolution is the fact that e-commerce is growing at four times the rate of overall retail, and this shifting business model has far-reaching effects on the entire retail industry. From the people and skill sets required to increasing mobile shopping to the IT investments made by retailers, big changes are happening right now. It's an "evolve or die" atmosphere where small, but meaningful differences can separate retail winners and losers.
I. Jobs and People, People and Jobs
With all the talk about e-commerce, one might think that retail jobs are disappearing as computers replace people; the opposite is true. The retail industry supports one in four U.S. jobs, and over 40 percent of those jobs are in nonsales positions. As the industry shifts to a mobile and web-based marketing approach, more technical talent is required. As companies look towards big data to help them understand and market specifically to each shopper, additional data analytics skills are needed.
Currently retail supports over 21,000 computer programmers and over 90,000 artists and designers. Many of these people are directly involved with delivering a cohesive and authentic online brand experience. However, with 42 million people employed in the retail sector (including restaurants and gas stations), and only .04 percent dedicated to computer programming, the ratio is too small to sustain the growth that lies ahead.
Consumer demand for a well-integrated retail experience also helps explain why retailers no longer employ people who are just starting or ending their careers. A third of retail employees over the age of 24 have college degrees and one in seven have advanced degrees. Most of those with advanced degrees are between the ages of 25-34. Based upon the customer relationships I have and the people I meet at the major e-commerce shows, these highly educated technicians are the talent driving digital initiatives at their companies. This is proof that the retail industry is evolving its talent base to reflect the skill sets needed to meet the needs of today's demanding consumers.
II. Investing in IT for Commerce Not Channels
While retailers still push products to consumers through persistent marketing and promotion, today's consumers can easily block out retail noise and find what they want through self-service channels. At the same time, shoppers are caring less about the channel through which products flow to them. These shifting dynamics are a huge opportunity for retailers to invest in the technology and infrastructure that benefits both online and in-store channels. From customized emails to personalization to more effective search, a look at the top open web positions in retail clearly reflects the areas where retailers are spending money:
- marketing analytics (40 percent);
- email marketing (40 percent);
- natural search (26 percent); and
- paid search (22 percent).
A brief glimpse at the descriptions of some recent job postings reflects the widespread adoption of specialized technicians at even the oldest retailers. Three examples of these include:
- microstrategy analyst, PetSmart;
- e-commerce guest architect, Abercrombie & Fitch; and
- junior front-end developer, Brooks Brothers.