By Sarah Nassauer
Last August, a 55-year-old Wal-Mart employee found out her job
would now be done by a robot. Her task was to count cash and track
the accuracy of the store's books from a desk in a windowless back
room. She earned $13 an hour.
Instead, Wal-Mart Stores Inc. started using a hulking gray
machine that counts eight bills per second and 3,000 coins a
minute. The Cash360 machine digitally deposits money at the bank,
earning interest for Wal-Mart faster than sending an armored car.
And it uses software to predict how much cash is needed on a given
day to reduce excess.
"They think it will be a more efficient way to process the
money," said the employee, who has worked with Wal-Mart for a
decade.
Now almost all of Wal-Mart's 4,700 U.S. stores have a Cash360
machine, turning thousands of positions obsolete. Most of the
employees in those positions moved into store jobs to improve
service, said a Wal-Mart spokesman. More than 500 have left the
company. The store accountant is now a greeter at the front door,
where she still earns $13 an hour.
"The role of service and customer-facing associates will always
be there, " said Judith McKenna, Wal-Mart's U.S. chief operating
officer, in an interview. But "there are interesting developments
in technology that mean those roles shift and change over
time."
Shopping is moving online, hourly wages are rising and retail
profits are shrinking -- a formula that pressures retailers from
Wal-Mart to Tiffany & Co. to find technology that can do the
rote labor of retail workers or replace them altogether.
As Amazon.com Inc. makes direct inroads into traditional retail
with its plans to buy grocer Whole Foods Market Inc., Wal-Mart and
other large retailers are under renewed pressure to invest heavily
to keep up.
Economists say many retail jobs are ripe for automation. A 2015
report by Citi Research, co-authored with researchers from the
Oxford Martin School, found that two-thirds of U.S. retail jobs are
at "high risk" of disappearing by 2030.
Self-checkout lanes can replace cashiers. Autonomous vehicles
could handle package delivery or warehouse inventory. Even more
complex tasks like suggesting what toy or shirt a shopper might
want could be handled by a computer with access to a shopper's
buying history, similar to what already happens online today.
"The primary predictor for automation is how routine a task is,"
said Ebrahim Rahbari, an economist at Citi Research. "A big issue
is that retail is a sizable percentage of the workforce."
Nearly 16 million people, or 11% of nonfarm U.S. jobs, are in
the retail industry, mostly as cashiers or salespeople. The
industry eclipsed the shrinking manufacturing sector as the biggest
employer 15 years ago. Now, as stores close, retail jobs are
disappearing. Since January, the U.S. economy has lost about 71,000
retail jobs, according to data from the Bureau of Labor
Statistics.
"The decline of retail jobs, should it occur on a large scale --
as seems likely long-term -- will make the labor market even less
hospitable for a group of workers who already face limited
opportunities for stable, well-paid employment," said David Autor,
an economist at the Massachusetts Institute of Technology.
Earlier this year, Beverly Henderson took a pay cut and gave up
her health-care benefits when she left Wal-Mart in the wake of the
back-office changes. "I'm 59 years old," she said. "I never worked
on the floor. I've always worked office positions and I had no
desire."
She is now an office manager at a local business she says can't
afford to give her the same perks or $16.75 an hour she made after
16 years with Wal-Mart. "I would have never left Wal-Mart. They
were paying me decent," said the Southport, N.C., resident. At
Wal-Mart, Ms. Henderson managed store invoices, a job the company
used technology to mostly centralize.
Automation is filtering through many parts of retail. Tiffany is
using machines to polish basic pieces, like silver jewelry, during
the production process. Home Depot Inc. now has self-checkouts in
most stores and is testing adding scanner guns to make them useful
for shoppers buying bulky products like lumber.
"We want to simplify the stores so that we can free up our
associates...so they can focus on selling," Carol Tomé, Home
Depot's chief financial officer, said in an interview.
Wal-Mart has long squeezed efficiency out of its business, both
in stores and throughout its vast supply chain. Although it employs
1.5 million people in the U.S., it has around 15% fewer workers per
square foot of store than a decade ago, according to an analysis by
the Journal.
Some Wal-Mart stores are experimenting with touch screens to let
shoppers process returns. Self-checkouts are becoming a larger
percentage of its total registers, according to a person familiar
with company strategy.
Several of Wal-Mart's recent published patent applications
propose technology to improve customer service, including a system
that uses facial recognition to detect customer dissatisfaction and
adjust staffing accordingly. Jobs at hundreds of stores are
shifting to support new services such as grocery pickup for digital
orders.
In two stores, Wal-Mart is testing touch-screen displays that
show shoppers the differences between devices like
internet-connected speakers and thermostats. "We don't need an
associate to understand how that works, but the associate is there
to service customers and check them out," said Ms. McKenna.
The Cash360 machines in the back of stores let cashiers take out
and deposit money from the device directly, granting them access by
scanning their hands for unique vein patterns.
The goal isn't to reduce a retailer's staff, said Brian McCabe,
an executive at a subsidiary of security firm G4S PLC, which
developed the cash-management system with Bank of America Corp. "We
can optimize labor, " he said. "How a given retailer exercises that
benefit or opportunity is up to them."
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
July 19, 2017 05:44 ET (09:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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