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Retail and the Gig Economy

published August 2017

Retail is an interesting area in the digital age, as I am sure it is a cultural topic too whether retail will go digital faster or slower or be strongly present in both parts. Some countries still focus nearly 90% on retail, example are the African countries even the more “developed” one’s like Namibia, where e-Commerce is not really existent yet. South Africa on the other hand many retailers are noticing the additional opportunity with e-commerce.

What is for sure is that companies will have to be way more adaptable and at a much higher pace, then what anyone thought would be necessary. Let us be honest even technology is moving at a much faster pace than we can all adapt. To think many topics have been around since early 2000. While some companies have adapted well, others seem to have missed the “opportunity” nearly completely.
If we look at the gig economy, potentially this could be a solution and not an obstacle for retail. Also it will potentially help make a shift in retail.

So what is the gig economy? Depends on who you ask, there are those that feel these are freelance workers and work on short term projects. Others will dispute that these are roles which will be exploited. (And yes there are a lot of discussions going on regarding how the labor regulations in complex countries want to manage the situation). However two notable points: 1.) A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors. 2.) Microsoft is looking at creating an internal gig economy.
So let us look at retail a bit closer and I want to use the US as an example, here retail jobs are 30% greater in number than those in manufacturing (And let us be honest, manufacturing jobs have been on a decline since 1980). Last year in the US about 4000 shops closed and it could be more in 2017 according to statistics. However we need to understand, this is not because retail won’t exist anymore (or maybe it won’t), it is that customers have changed the way they shop.
This in turn needs to be reflected in the way we set up our organization as retail businesses, as a real estate business and even as a financial institution, because all of these companies are directly involved with the retail stores. The turmoil may impact millions of workers. The retailing industry alone according to statistics employs 15.9m people, which means this is one in nine American jobs.
How do companies look at preparing their workforce, how do they prepare for the shifts in the job market, as well as being ready for AI (Artificial Intelligence) and AR (Augmented Reality)? These should be key topics for companies, as only then can they ensure they retain the right skill set, develop and train those that will be needed in the future and with that keep their competitive advantage.