Technology helping Retailers

by Deepak Sharma on Tuesday, December 25, 2007

IHT has a great article on how Technology is helping retailers better customer service and thus in turn increase sales. It also touches on the delicate subject of Technology replacing jobs. Productivity in retail sector has increased faster than in any other industry.

An Associated Press analysis of Bureau of Labor Statistics' employment data found that department stores have slashed 247,100 jobs since June 2001, when employment in that sector peaked. The number of jobs at food and beverage stores has fallen by 118,800 since April 2000.

Technology that allows companies to produce more goods or provide service to their customers with fewer workers or with their current staff is a factor in some job losses, economists say. A second is consolidation when a company buys out a rival or merges with a competitor.


Productivity — the amount a worker produces for every hour on the job — has grown at a faster rate in the retail industry than in all industries across the economy. Had this not occurred, there now would be nearly 4.5 million more jobs in retailing, according to Mark Zandi, chief economist at Moody's "Arguably it has been hard on workers," Zandi says.

Yet companies say a reduced work force is not the main goal of technological innovations.

The article touches on some math involving Self-service checkouts:

The retail industry spent $380 million on installing new self-service checkout units in 2006 and is expected to rise to $457 million (€318 million) this year, says Greg Buzek, president of IHL Consulting Group, a research and consulting company that specializes in technology for the retail and hospitality industries.

Making the investment in self-checkouts may not necessarily yield a big payoff for the retailer.

The average self-service checkout machine costs $21,000 (€14,600) and has a typical life of five years, Buzek estimates.

In contrast, a regular cash register costs on average $4,000 (€2,800) and has a longer life — typically nine years, Buzek says. Often, the self-service checkout machines are clustered in a group of four at stores, with one store clerk designated to oversee the self-checkout squad, he says.

The average wage of a grocery store cashier is $19,060 (€13,250) a year, according to the Labor Department.