As retailers push early deals for shoppers this holiday season, thousands of jobs are being added to local distribution and logistics centers to meet the demand presented by increased online shopping.
This is the first year that online sales are expected to surpass in-store sales during the holiday season, with about 59 percent consumers planning to shop online. Though holiday sales are expected to increase overall compared to last year, a large part won’t be spent in brick-and-mortar stores.
“We’re seeing consumers shop now,” said Gordon Gough, president and CEO of the Ohio Council of Retail Merchants. “Sales are going on now and retailers are asking consumers to visit their website or visit their brick-and-mortar establishments.”
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The national federation projects that holiday retail sales in November and December will be up between 3.6 percent and 4 percent for a total between $678.8 billion and $682 billion. Consumers say they will spend an average $967.13 this year, according to an annual survey conducted by the federation.
Ohio retailers have not projected estimated holiday sales yet, but the Ohio Council of Retail Merchants expects the state’s holiday sales to also increase this year. Ohio’s retail industry accounts for $26.5 billion of Ohio’s annual gross domestic product, according to the Ohio Council of Retail Merchants. Retail supports 1.5 million jobs — 1 in 4 of all Ohio jobs. That’s more than any other industry in the state.
Consumers are feeling less affected by the economy and political environment this year— and retailers are capitalizing on it. A survey found that only 27 percent of consumers say their spending will be affected by concerns about the nation’s economy, “down from 32 percent during 2016’s election-year jitters,” NRF said in a statement.
It takes hundreds of thousands of seasonal workers to deliver those millions of packages to the front doors of online holiday shoppers in Southwest Ohio. Delivery companies like FedEx and UPS will hire thousands of seasonal workers to meet delivery demands. UPS expects to handle 750 million packages nationwide during the holiday season — and that means major job opportunities. For the holiday season, the company is hiring 95,000 temporary workers, including drivers, package sorters and loaders.
“If you are a student, a working mom or just looking to make extra money for the holidays, we have a job for you,” said UPS CEO David Abney.
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As national retailers focus efforts online, more jobs are shifting to distribution and logistics than ever before. Kohl’s is looking to hire 2,400 workers at its e-commerce fulfillment center in Monroe for the holiday season, while Amazon is looking to hire 3,000 at its fulfillment sites in Ohio.
The logistics and transportation industry is a major driver for the Dayton region. Production and employment in the regional economy is estimated to generate a total of $2.5 billion in sales, nearly 20,000 permanent jobs, $855 million in labor income and nearly $27 million in state and local sales and income tax revenues due to industry operations, according to a study released by the Dayton Area Logistics Association in 2015.
Amazon is offering stiff competition. The online retailer has announced fulfillment centers across Ohio, including one in Monroe that will bring 1,000 jobs to the region. The fulfillment centers mean local customers can expect their packages even sooner than before.
Gough said the typical store clerk position no longer represents employment opportunities in the industry.
“It’s far more than that, and technology is going to be a huge driver in retail jobs,” he said. “There are more tech jobs in retail. If you look at point-of-sales systems, the code that needs to be developed to put products online for consumers to see — all of those things are highly technical jobs and they’re all being created in retail now.”
Big box retailers like Walmart, Target, Meijer and Toys “R” Us are already announcing major sales, hoping to lure in customers earlier in the holiday season. Target already launched holiday sales, offering pre-Black Friday deals on toys, electronics and entertainment items online last Monday — and teasing to the store’s good deals on Black Friday weekend.
“Our hours for this year ensure we’re ready with great deals for those guests who want to shop following their Thanksgiving dinner,” said Janna Potts, executive vice president and chief stores officer of Target.
The push comes as chain retailers closed thousands of the stores this year. Dozens of stores filed for bankruptcy including The Limited, Gymboree, RadioShack, hhgregg and Payless. Even Bon-Ton Stores Inc., parent company of Elder-Beerman, grappled with major financial issues this year. The retailer was delisted from the Nasdaq exchange after failing to keep its stock price above $1 per share for 30 consecutive business days.
Through the first half of 2017, Bon-Ton lost $90.5 million as sales fell more than 8 percent compared with the first six months of 2016. Bon-Ton releases its financial results for the third quarter next Thursday. Elder-Beerman has a major presence within the Dayton region. Elder-Beerman closed stores at Towne Mall Galleria in Middletown in January and the Ohio Valley Mall in St. Clairsville, Ohio in late March.
Some chain retailers shuttered stores immediately, leaving vacant tenant spaces in local shopping centers like the Mall at Fairfield Commons, The Greene Town Center, Dayton Mall and the Liberty Center. The flurry of closures forced local malls to try new tactics to fill space like The Greene’s new pop-up shop program that will offer different options for holiday shoppers.
Infographic by- Invesp Conversion Optimization Services
Steve Willsaw, general manager of The Greene Town Center, said the center is allowing small business to test their product sales on the weekends. Some small businesses have debuted their items through the program and then signed a longer term lease at The Greene.
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“The gist of the program is that someone will be able to utilize a finished out space that is already fully fixtured for a week at a time. I think that the thing that is really appealing about this is that the businesses will only be required to pay us a small fee for each day they are actually open for business not all the days of occupancy. This has been very appealing so far. There are no other fees involved to operate in the space,” Willshaw told this news organization in an email.
But small retailers say they aren’t feeling the impact of shift to online purchasing.
Todd Bettman, founder and CEO of Dayton-based Shops by Todd Inc., owns and operates 19 shops in two states and his business continues to grow. He said his stores like Jake’s Toggery, Pandora and Occasionally Yours continue to bring in strong sales each year — in part due to the niche products sold and unique customer service provided by the brands.
Headquartered in downtown Dayton, Shops by Todd has more than 350 employees and brought in around $26 million in sales last year. His stores haven’t been hit by the stark competition from online shopping, and customers will always place value in the consumer experience only found at physical shops, he said.
“We don’t see it affecting our brick-and-mortar stores to a large degree,” he said. “(The Internet) might dominate in commodity goods and electronics, but we have specialty retailers.”
Since Thanksgiving falls later on the calendar this year, it allows consumers more time to shop this season.
“You’re just seeing that transformation of the retail industry,” Gough said. “I still think we’ll see crowds. Shopping is a social experience. They like to get up early with their family or finish Thanksgiving dinner and go shopping that evening. We’re all social beings and I don’t see that going away, but shoppers have more options. They can buy online, shopping at home on Thanksgiving night on their laptop will be done as well.”
BY THE NUMBERS
• 59 percent of consumers will shop online this year
• $967.13 will be the average amount spent by each consumer this season
• $678.8 billion - $682 billion brought in nationwide in sales this holiday season
Source: National Retail Federation
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