With the publication of my WSJ op-ed, “Get Ready for the Internet of Goods,” it’s time to update our ecommerce analysis for the third quarter. Rather than reaching back to 2007, as previously, I want to focus on a more recent period. First, take a look at the chart below, which graphs the full-time equivalent (FTE) employment for brick-and-mortar retail, with a 3-month moving average.
On a quarterly basis, brick-and-mortar FTE peaked in the third quarter of 2015, and since then has been drifting down at about a half percent annually. The figure for brick-and-mortar FTE in the third quarter of 2017 is probably a bit lower than it should be because of the effects of Hurricanes Harvey and Maria on hours worked in retail.
So let’s look at the two years since brick-and-mortar FTE peaked. Over those two years, brick-and-mortar retail FTE jobs fell by 123,000. That’s a decline of about 1%. The increase in FTE ecommerce jobs was 178,000 over the same stretch. That’s based on hours worked in the electronic shopping and mail-order industry, and the warehousing industry, where many fulfillment centers are reported. FTE jobs at couriers and messengers, including express delivery companies, rose by 58,000. All told, the gains in ecommerce and delivery services was almost twice the size of the losses in brick=and-mortar retail.
Change in FTE jobs, 3Q15-3Q17 (thousands)
Brick-and-mortar retail -123
Ecommerce +178
Express delivery and couriers +58
Data: BLS, PPI.
Several points: First, FTE adjusts for changes in hours worked per week. Second, we now see a significant employment impact on the delivery side. To put it a different way, those UPS drivers are working way hard. Third, a portion of the third quarter decline in brick-and-mortar FTE is likely to be due to Hurricanes Harvey and Maria reducing the number of hours for retail workers in Texas, Florida, and other storm-hit areas..
