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As stores reopen, US retailers retool their workforces in coronavirus era

U.S. retailers will be retooling their workforces as they reopen stores in the coronavirus era, adding new roles to advance online operations and altering customer-facing positions to accommodate social distancing measures, experts say.

Pre-pandemic, many e-commerce companies and big-box retailers were taking steps to enhance digital operations by adding jobs focused on contactless curbside pickup and buy online, pick up in-store services. Amazon.com Inc. and Walmart Inc., for example, have been collectively adding thousands of workers to fulfill online demand and enhance their distribution networks.

But experts say the COVID-19 pandemic will likely accelerate efforts among a greater number of brick-and-mortar retailers, from department stores to boutiques, to add workers to support digital operations while ensuring a safe shopping experience in reopened physical stores.

"What it means to work in retail is going to change — that's a pre-pandemic trend that the current crisis will simply accelerate," Tracy Hadden Loh, a fellow at The Brookings Institution's Metropolitan Policy Program, said in an interview.

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A retail worker at Old Navy. Experts say retail workers will have new responsibilities, including cleaning and social distance monitoring, as stores reopen.

Source: The Gap Inc.

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Retailers will be making incremental adjustments to their workforces to capture a growing number of sales occurring online. U.S. shoppers are expected to spend $709.78 billion online in 2020, up 18% from $601.65 billion in 2019, according to a June report by eMarketer.

But brick-and-mortar is still generating the bulk of retail sales in the U.S. Even though sales at physical stores in 2020 are expected to slide 14% year over year to $4.18 trillion, the in-store experience will continue to be the important one. Consumers are eager to head back to hair salons and physical stores as lockdowns ease, according to a recent survey from 451 Research, an offering of S&P Global Market Intelligence.

Workforce woes

While some jobs are coming back, experts say there will likely be fewer retail positions overall.

Employment in the retail sector was about 13.7 million in May 2020, slightly up from the 13.3 million in April 2020, but still far below the 15.7 million in January before the pandemic, according to the U.S. Bureau of Labor Statistics.

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"A lot of people are going to be rehired in the next couple of months, but I don't think we get back to where we were anytime soon," said Neil Stern, a senior partner with McMillanDoolittle.

Julia Pollak, a labor economist with ZipRecruiter, concurred. Pollak said she would be surprised if retail employment returned to within 5% of its January level by year-end, adding that more than 780,000 retail jobs have likely been lost permanently.

Experts say retailers will not need as many workers as they move ahead with expense cuts planned before the virus and shutter stores. According to Coresight Research, retailers may close up to 25,000 stores in 2020, with 55% to 60% of them in malls. Many major mall tenants have already gone bankrupt in the wake of COVID-19, including J.Crew Group Inc., J. C. Penney Co. Inc. and Neiman Marcus Group Inc.

Nordstrom Inc. said in May that it plans to permanently close 16 stores, while The Gap Inc., a major tenant at U.S. malls, was already planning to close underperforming stores, such as Gap Kids, before the pandemic, said Morningstar analyst David Swartz.

"A company like Nordstrom won't be understaffed," Swartz said. "But if there are fewer customers in stores, they don't need as many people."

Jack-of-all-trades

The pandemic will not necessarily make certain retail jobs like cashiers or greeters obsolete. But retailers will be adding new tasks and responsibilities to the retail positions they do bring back in a move that could profoundly change the nature of the work itself, experts say.

"Some of these folks are going to be all that much more jack-of-all-trades," said Katie Thomas, who leads the Global Consumer Institute at consulting firm Kearney.

The cashier may become an enforcer of social distancing guidelines and a temperature-taker at a store's entrance. The retail associate used to interacting all day with customers may be sanitizing fitting rooms after each use. And a store clerk's job may become physically demanding if it requires handling fulfillment orders, said Loh, of Brookings.

"It sounds like a marginal change, but it has huge implications, especially for a workforce that includes women with health conditions, pregnant women and older Americans," she said.

Longer-term, retailers are likely to add positions in areas such as inventory management, marketing and the labor-intensive returns business in person and online, Swartz said.

Customer service positions will also be key to help shoppers select products and navigate new physical store layouts, Thomas said. "If the overall layout of things looks differently, how do they find what they are looking for?" she said. "How are people helping to manage complicated return policies that vary by store?"

Nordstrom, for example, has added staff at entrances to answer customer questions and ensure social distancing. Home improvement company Lowe's Cos. Inc. has added "social distancing ambassadors" to monitor customer flow.

Low-touch experience

Some stores are likely to scale back or put on hold certain "high-touch" experiences that require human interaction, such as makeovers at the beauty counter and in-store customer events. Others might provide consumers with the option to shop in-store by appointment or cut back on their operating hours. Those moves could affect how many hours store staff are working and how much retailers need to pay them.

Swartz said retailers are likely to retain at least some services targeting their biggest spenders, like custom tailoring. "Their highest-end customers expect to go into the store and get good service," he said.

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Nordstrom offers tailoring services inside a Nordstrom Local store, which focuses on online order pickup and returns and express alterations. Experts say high-touch services such as tailoring and customer events will be reduced or put on hold.

Source: Nordstrom


A head start

Retailers that invested in e-commerce ahead of the pandemic will have an easier time helping their workers walk the tightrope between serving physical stores and online platforms, while stores that did not invest in digital capabilities will have more difficulty striking that balance.

Some companies, like Amazon and Walmart, are ahead of the curve. Amazon recently hired 175,000 additional workers to support its delivery network and continues to advertise for warehouse positions. Walmart said in April that it planned to hire an additional 50,000 workers on top of the 150,000 temporary positions it hired to help with coronavirus demand.

"The crisis has rewarded certain investments made by certain retailers," Pollak, of ZipRecruiter, said in an interview.

Online operations remain a competitive advantage at Nordstrom, which has operated its own online business for about 20 years, said Swartz. Athletic apparel company Lululemon Athletica Inc.'s online business was also growing rapidly pre-pandemic.

Meanwhile, off-price retailers like The TJX Cos. Inc. where e-commerce makes up only 2% of business, could be behind the curve when it comes to ramping up a dedicated online workforce because it is set up for a treasure-hunt type of shopping experience, Swartz said.

"Their business model is based on people going into stores to see what they have," he said.