The Australia Institute’s Executive Director Richard Denniss made some insightful comments on Australia’s retail trade sector today, recognising that a significant proportion of bricks-and-mortar retailers may no longer be economically viable (Retailers guilty of 142% mark ups: Report):
According to the institute’s executive director Dr Richard Denniss, frugal shoppers are increasingly heading online at the expense of bricks-and-mortar retailers.
“The fact is, traditional retail is a very expensive way of delivering products to customers and – just as digital cameras have decimated photo development labs – so too will online retail transform the way Australians shop,” he says.
“Given the huge disparity between people’s perceptions of what is a fair mark-up and what they are being charged in bricks-and-mortar shops, it’s not surprising that they are choosing clicks over bricks.”
Richard is probably right that the rise of online retail will lead to a transformation of the retail trade sector in Australia, a transformation that will likely involve the closure of many stores and a relative decline in retail sector employment. As long as it occurs gradually, any displaced workers should be absorbed by other industries.
The transformation may have the largest impact on teenagers, who have typically worked in part-time jobs in retail. While Coles and Woolworths don’t have much to worry about with respect to online competition from overseas, Myer, David Jones, K-Mart, Big W and Target, for example, do, and they are major employers of teenagers. Hence it may be a lot tougher for young people to find part-time jobs in the future. Of course, there may be new job opportunities – with the rise of online retail, there may be demand for many more couriers in the future.