E-Shopping Bubbling While Retail Bums Along

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We recently explored the post-recession tsunami of online retail and discovered that e-shopping’s future is anything if not bright. According to a report by Forrester Research, by 2016, not only are 192 million U.S. consumers projected to be be clicking “checkout” (up 15% since 2012), but those 192 million will also be spending an average of 44% more.

But does this mean we should expect traditional retail to flatline? Well, no. As we showed here, the flourishing of specific retail subsectors (e.g., warehouses/supercenters) certainly cheers up total gloom-and-doom predictions.

Nevertheless, traditional retail and e-shopping scream for comparison. Whatever their destiny, they could hardly differ more in size, stability, and growth patterns so far, and so let’s take a look.

A Comparison

Here’s how the two industries break down:

Traditional retail: NAICS 44-45, except for electronic shopping and electronic auctions

E-shopping: electronic shopping (454111) and electronic auctions (454112)

A quick comparison between retail and e-shopping shows two very different stories. Traditional retail, of course, has been around forever with its ups and downs, while e-shopping is still technically a teenager — and like a teen, it’s growing wicked fast.

Chart - Traditional Retail Jobs 2002-2013

 

  • Retail jobs declined 1% from 2002 to 2013. The industry grew 3% from 2002-2007, then tanked 7% from 2007-2010 and has yet to recover even its 2002 status.
  • The industry had 15.7 million jobs in 2002 and now has 15.5 million (loss of 200,000 jobs).
  • The average annual earnings per job is $32,433.
  • Jobs multiplier: 1.32. This means that every job in retail creates a third of another job elsewhere — or, put another way, every three jobs in retail create one job in another industry. (Note: We excluded induced effects in our calculations to avoid the double-counting that comes when looking at spending at the national level.)
  • Department stores have taken a colossal hit, dropping almost without respite from 811,000 jobs to 489,000 (40% loss).
  • In an age when manager positions are stepping on the gas, it’s troubling to see that within the retail industry, general & operations managers have declined 15% the past 10 years (a loss of 35,000 jobs).

Chart - E-shopping Jobs 2002-2013

  • E-shopping grew 161% from 2002 to 2013 (averaging 15% a year). The industry has spiked 42% just since 2009, coming out of the recession when it still managed to inch up 4%. In fact, e-shopping isn’t far behind the fastest-growing industry sector of the past 10 years — mining, quarrying, and oil & gas extraction (NAICS 21), which has grown 60% since 2002 and 26% since 2009.
  • With 173,737 jobs, e-shopping’s labor force can’t even compare with traditional retail’s.
  • On the other hand, the jobs pay significantly more: $65,000 (annual average).
  • Jobs multiplier: 1.46, slightly higher than traditional retail’s, which is a little surprising. (Again, we left out induced effects.)

One thing we notice is the huge discrepancy in jobs between these two industries. Traditional retail, for all its loss, is still 90 times the size of e-shopping, whose growth is not quite as jaw-dropping, perhaps, as it might seem at first. Sure, it’s booming, but then, it’s always easier to top 160% growth when you start out so tiny.

No, the most interesting fact here is not how many jobs e-shopping is adding to the economy, but how many jobs it isn’t. It creates good consumer prices, serves more customers, makes more dough, and has completely changed the way we view products (literally and figuratively). And it does all these things with a smaller workforce.

This trend of online-based business and a smaller, more tech-based workforce is well illustrated by the Kodak vs. Instagram conversation (read more here and here). At its peak, Kodak employed 140,000 while Instagram, at the time that it was purchased by Facebook in April 2012, employed a mere baker’s dozen. In short, the American economy has always been obsessed with efficiency. If we can do more with less, we will, and the internet is apparently accelerating that process.

The Story in the States

Let’s take a closer look at the top states for job growth and decline for both these industries.

States for Top Job Growth and Decline - Traditional Retail

Retail jobs have flourished the most in North Dakota (21%), Nevada (15%), Utah (11%), and Arizona (10%). Each of those states, it should be noted, have fast-growing populations and/or economies. The worst decline has taken place in Michigan (15%), Ohio (14%), Rhode Island (13%), and Wisconsin (10%).

States for Top Job Growth and Decline - E-shopping

For e-shopping, it’s mostly just a question about where it has grown a lot and where it has grown a ton. Only two states have seen an actual decline in jobs. Idaho leads the way crazy 3,370% growth (from 40 to 1,400 jobs), followed by Utah (800%, from 700 to 6,200 jobs), and Indiana (780%, from 670 to 5,900 jobs). The states that have done the least well are Alaska (20%, from 80 down to 60 jobs), South Dakota (3%, from 92 to 89 jobs), Virginia (mere 5% growth, from 2,000 to 2,140 jobs), and New Mexico (11%, from 127 to 141 jobs).

Here’s a complete look at the growth/decline of each industry in all 50 states (plus Washington D.C.), as well as how they rank:

State % Change in Retail Jobs Rank % Change in E-Shopping Rank
North Dakota 21% 1 85% 37
Nevada 15% 2 140% 31
Utah 11% 3 804% 1
Arizona 10% 4 37% 45
South Dakota 9% 5 -3% 50
Texas 8% 6 68% 42
Idaho 7% 7 3368% 1
Florida 7% 8 74% 39
District of Columbia 7% 9 652% 4
Arkansas 6% 10 134% 33
New York 6% 11 179% 26
Alaska 5% 12 -19% 51
Hawaii 5% 13 125% 35
North Carolina 4% 14 198% 24
Washington 4% 15 271% 17
South Carolina 1% 16 135% 32
Tennessee 1% 17 114% 36
Colorado 1% 18 307% 12
Oklahoma 0% 19 277% 15
Montana 0% 20 72% 40
New Mexico 0% 21 11% 48
Delaware -1% 22 126% 34
Oregon -1% 23 456% 8
Virginia -1% 24 5% 49
West Virginia -1% 25 189% 25
Vermont -1% 26 298% 14
Wyoming -2% 27 68% 41
New Hampshire -2% 28 334% 11
Louisiana -2% 29 275% 16
Georgia -2% 30 146% 29
California -3% 31 156% 28
Alabama -3% 32 53% 44
New Jersey -4% 33 218% 23
Massachusetts -4% 34 220% 22
Missouri -4% 35 220% 21
Iowa -4% 36 246% 19
Kentucky -5% 37 455% 9
Maryland -5% 38 435% 10
Nebraska -5% 39 242% 20
Pennsylvania -6% 40 76% 38
Maine -6% 41 146% 30
Minnesota -6% 42 554% 7
Illinois -6% 43 65% 43
Mississippi -7% 44 171% 27
Connecticut -7% 45 13% 47
Indiana -7% 46 781% 3
Kansas -8% 47 21% 46
Wisconsin -10% 48 304% 13
Rhode Island -13% 49 634% 5
Ohio -14% 50 572% 6
Michigan -15% 51 255% 18




E-Shopping Hot Spots

E-shopping has also developed quite a few hot spots across the nation, and a handful of MSAs have very high job concentrations. Here are the MSAs where e-shopping’s concentration (measured in terms of location quotient, LQ) is highest:

MSA 2013 Jobs 2013 Avg. Earnings Per Job 2013 National LQ
Fernley, NV 710 $55,306 48.05
Hannibal, MO 590 $13,789 26.83
Galesburg, IL 426 $27,766 12.17
Grand Forks, ND-MN 748 $43,981 10.27
Mexico, MO 114 $22,497 9.27
Ottawa-Streator, IL 538 $21,666 7.31
Hood River, OR 111 $26,422 6.46
Seattle-Tacoma-Bellevue, WA 14,515 $120,560 6.39
Thomasville-Lexington, NC 328 $36,346 6.02
Huntington-Ashland, WV-KY-OH 759 $30,910 5.53
Americus, GA 84 $22,717 5.5
Salt Lake City, UT 4,277 $64,051 5.17
Moultrie, GA 98 $31,360 4.9
Chico, CA 463 $68,168 4.88
Provo-Orem, UT 1,046 $48,062 4.05
Indianapolis-Carmel, IN 4,430 $41,354 3.96
San Jose-Sunnyvale-Santa Clara, CA 4,608 $240,899 3.87
Bend, OR 312 $32,260 3.72
Port St. Lucie, FL 604 $22,611 3.72
Meadville, PA 137 $39,731 3.34
Mankato-North Mankato, MN 208 $18,374 3.09



Seattle, home to Amazon.com, stands out for its sheer number of jobs (14,500). So too does San Jose, eBay’s headquarters, with 4,600. These two MSAs are also where most of the earnings are pooled.

We should also note Indianapolis, where job growth since 2009 approaches 4,000 and tops 500%. In fact, e-shopping is Indianapolis’s fastest-growing industry of the past 10 years, climbing 4,500% since 2002. (Indiana, remember, is third in the nation for e-shopping growth: nearly 800%.)

The city with the highest concentration of online retail jobs is Fernley, Nev., home to an Amazon distribution center. Currently the town of 53,000 is 48 times the national average for e-shopping. Moreover, about 6% of the town’s workforce (710 out of 12,800 jobs) are in the e-shopping industry.

However, this isn’t as golden as Fernley was back in 2007, when e-shopping’s concentration was 107 times greater than the national average. During the recession, Fernley lost 30% of its e-shopping jobs, and has yet to recover them.

Galesburg, Ill., has a similar recession story but bounced back quickly. The town of 32,000, with a concentration 12 times that of the national average, has rapidly regained its jobs — and then some — over the past year.

E-shopping - Fernley vs. Galesburg

For towns like Fernley and Galesburg, perhaps the lesson is that e-shopping is much less place-bound than traditional retail. All these small towns with high concentrations run a certain risk with e-shopping if the big companies were to move operations elsewhere.

The map and table below show the 2009-2013 job performance of online retail in the towns with the highest job concentrations (containing at least 100 e-shopping jobs). We see both huge gains and huge declines (in terms of % growth):

MSAs - 100+ E-shopping jobs


MSA 2009 Jobs 2013 Jobs Change % Change 2013 Average Earnings 2009 LQ 2013 LQ
Akron, OH 150 174 24 16% $34,974 0.60 0.49
Albany-Schenectady-Troy, NY 79 102 23 29% $29,447 0.23 0.22
Allentown-Bethlehem-Easton, PA-NJ 177 357 180 102% $32,915 0.67 0.95
Ann Arbor, MI 50 128 78 156% $32,806 0.32 0.55
Atlanta-Sandy Springs-Marietta, GA (12060) 1,655 2,454 799 48% $56,564 0.92 0.94
Austin-Round Rock-San Marcos, TX 737 1,666 929 126% $48,277 1.19 1.75
Baltimore-Towson, MD 432 478 46 11% $73,551 0.42 0.32
Baton Rouge, LA 111 125 14 13% $46,293 0.37 0.30
Bellingham, WA 118 158 40 34% $33,482 1.73 1.64
Bend, OR 191 300 109 57% $33,132 3.60 4.02
Birmingham-Hoover, AL 167 218 51 31% $35,155 0.43 0.40
Boise City-Nampa, ID 377 895 518 137% $56,366 1.77 2.89
Boston-Cambridge-Quincy, MA-NH 1,709 3,054 1,345 79% $67,988 0.89 1.09
Boulder, CO (14500) 376 561 185 49% $48,869 2.88 2.89
Bremerton-Silverdale, WA 53 116 63 119% $46,891 0.69 1.12
Bridgeport-Stamford-Norwalk, CT 1,017 898 -119.00 -12% $111,274 3.02 1.88
Brownsville-Harlingen, TX 103 128 25 24% $21,781 0.98 0.83
Buffalo-Niagara Falls, NY (15380) 185 258 73 39% $26,681 0.45 0.45
Canton-Massillon, OH 36 128 92 256% $41,449 0.28 0.69
Cape Coral-Fort Myers, FL 176 194 18 10% $37,279 1.09 0.83
Charleston-North Charleston-Summerville, SC (16700) 86 137 51 59% $35,397 0.37 0.40
Charlotte-Gastonia-Rock Hill, NC-SC 277 571 294 106% $50,665 0.42 0.58
Charlottesville, VA 191 102 -89.00 -47% $29,774 2.41 0.93
Chattanooga, TN-GA 94 164 70 74% $31,012 0.52 0.63
Chicago-Joliet-Naperville, IL-IN-WI 2,580 4,557 1,977 77% $59,758 0.77 0.96
Chico, CA 243 458 215 88% $68,695 3.98 5.42
Cincinnati-Middletown, OH-KY-IN 1,009 1,625 616 61% $39,261 1.30 1.49
Cleveland-Elyria-Mentor, OH 770 785 15 2% $54,287 0.98 0.71
Coeur d'Alene, ID 31 118 87 281% $22,609 0.71 1.94
Colorado Springs, CO (17820) 233 366 133 57% $27,687 1.01 1.10
Columbia, MO 93 153 60 65% $36,494 1.33 1.48
Columbia, SC 59 104 45 76% $35,458 0.21 0.26
Columbus, OH 3,094 3,324 230 7% $34,355 4.33 3.22
Dallas-Fort Worth-Arlington, TX 2,950 3,334 384 13% $51,152 1.27 0.96
Davenport-Moline-Rock Island, IA-IL 107 186 79 74% $50,847 0.75 0.91
Dayton, OH 111 175 64 58% $26,891 0.38 0.43
Deltona-Daytona Beach-Ormond Beach, FL 179 157 -22.00 -12% $36,650 1.42 0.88
Denver-Aurora-Broomfield, CO 1,465 1,936 471 32% $54,863 1.49 1.33
Des Moines-West Des Moines, IA 143 148 5 3% $35,543 0.56 0.40
Detroit-Warren-Livonia, MI 712 826 114 16% $47,384 0.53 0.42
Eau Claire, WI 131 194 63 48% $29,794 2.14 2.16
El Paso, TX 514 791 277 54% $17,522 2.17 2.28
Elkhart-Goshen, IN 18 124 106 589% $34,131 0.24 0.99
Eugene-Springfield, OR 94 177 83 88% $25,883 0.81 1.08
Fayetteville-Springdale-Rogers, AR-MO 88 162 74 84% $42,470 0.56 0.69
Fernley, NV (22280) 704 710 6 1% $55,306 72.77 53.93
Fort Collins-Loveland, CO 147 186 39 27% $39,192 1.35 1.16
Fort Wayne, IN 54 207 153 283% $48,876 0.34 0.91
Galesburg, IL 277 424 147 53% $27,835 12.45 13.61
Grand Forks, ND-MN 268 746 478 178% $44,038 5.99 11.51
Grand Rapids-Wyoming, MI 693 765 72 10% $85,872 2.47 1.79
Greensboro-High Point, NC 255 177 -78.00 -31% $36,448 0.95 0.47
Hannibal, MO (25300) 413 590 177 43% $13,789 31.34 30.11
Harrisburg-Carlisle, PA 136 209 73 54% $31,602 0.55 0.59
Hartford-West Hartford-East Hartford, CT 283 486 203 72% $30,435 0.59 0.72
Honolulu, HI 116 228 112 97% $30,149 0.29 0.40
Hood River, OR 65 110 45 69% $26,564 6.20 7.16
Houston-Sugar Land-Baytown, TX 1,442 1,809 367 25% $40,959 0.70 0.58
Huntington-Ashland, WV-KY-OH 181 759 578 319% $30,904 2.04 6.21
Indianapolis-Carmel, IN 698 4,367 3,669 526% $41,569 1.03 4.38
Jacksonville, FL 328 484 156 48% $39,193 0.70 0.72
Kansas City, MO-KS 671 865 194 29% $38,886 0.86 0.78
Knoxville, TN 115 226 111 97% $38,606 0.44 0.61
Lakeland-Winter Haven, FL 97 105 8 8% $39,221 0.62 0.48
Las Vegas-Paradise, NV 1,128 2,013 885 78% $56,095 1.71 2.15
Lexington-Fayette, KY 177 280 103 58% $38,517 0.90 0.96
Lincoln, NE 68 339 271 399% $48,179 0.52 1.80
Little Rock-North Little Rock-Conway, AR 85 123 38 45% $30,742 0.32 0.33
Logan, UT-ID 85 135 50 59% $22,246 2.10 2.30
Los Angeles-Long Beach-Santa Ana, CA 7,839 8,519 680 9% $60,101 1.74 1.32
Louisville/Jefferson County, KY-IN 126 201 75 60% $38,956 0.27 0.29
Madison, WI 258 516 258 100% $58,625 0.97 1.36
Manchester-Nashua, NH 280 353 73 26% $60,692 1.83 1.64
Mankato-North Mankato, MN 60 206 146 243% $18,459 1.45 3.44
Medford, OR 107 176 69 64% $39,243 1.63 1.90
Memphis, TN-MS-AR 284 319 35 12% $34,885 0.59 0.47
Mexico, MO 12 114 102 850% $22,497 1.54 10.40
Miami-Fort Lauderdale-Pompano Beach, FL 2,647 3,210 563 21% $54,616 1.47 1.23
Milwaukee-Waukesha-West Allis, WI (33340) 804 1,162 358 45% $34,887 1.28 1.30
Minneapolis-St. Paul-Bloomington, MN-WI 611 1,130 519 85% $41,066 0.45 0.57
Nashville-Davidson--Murfreesboro--Franklin, TN 498 785 287 58% $36,789 0.82 0.85
New Haven-Milford, CT 110 183 73 66% $68,783 0.38 0.44
New Orleans-Metairie-Kenner, LA (35380) 160 212 52 33% $35,863 0.38 0.35
New York-Northern New Jersey-Long Island, NY-NJ-PA 7,402 13,923 6,521 88% $76,745 1.13 1.47
North Port-Bradenton-Sarasota, FL 177 174 -3.00 -2% $37,516 0.88 0.62
Ocala, FL 57 104 47 82% $39,066 0.75 0.97
Ogden-Clearfield, UT 291 557 266 91% $39,442 1.84 2.39
Oklahoma City, OK 97 163 66 68% $48,017 0.21 0.24
Omaha-Council Bluffs, NE-IA 654 824 170 26% $53,708 1.80 1.60
Orlando-Kissimmee-Sanford, FL 544 1,001 457 84% $53,066 0.70 0.88
Ottawa-Streator, IL 297 535 238 80% $21,722 6.43 8.16
Oxnard-Thousand Oaks-Ventura, CA 209 272 63 30% $42,119 0.81 0.74
Palm Bay-Melbourne-Titusville, FL (37340) 143 217 74 52% $42,583 0.92 1.00
Peoria, IL 58 149 91 157% $36,634 0.42 0.75
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 1,335 2,372 1,037 78% $50,131 0.63 0.80
Phoenix-Mesa-Glendale, AZ 3,332 4,062 730 22% $62,002 2.42 2.03
Pittsburgh, PA 1,077 1,002 -75.00 -7% $50,314 1.23 0.80
Port St. Lucie, FL 93 561 468 503% $22,448 0.92 3.87
Portland-South Portland-Biddeford, ME 188 214 26 14% $44,201 0.88 0.72
Portland-Vancouver-Hillsboro, OR-WA 1,202 1,944 742 62% $37,203 1.47 1.63
Poughkeepsie-Newburgh-Middletown, NY 169 136 -33.00 -20% $35,261 0.84 0.49
Providence-New Bedford-Fall River, RI-MA 279 306 27 10% $23,727 0.52 0.41
Provo-Orem, UT 556 961 405 73% $49,202 3.72 4.18
Racine, W 91 110 19 21% $28,197 1.57 1.32
Raleigh-Cary, NC 378 537 159 42% $49,990 0.94 0.90
Redding, CA 117 134 17 15% $57,004 2.22 1.88
Reno-Sparks, NV (39900) 661 386 -275.00 -42% $40,630 4.29 1.81
Richmond, VA 294 221 -73.00 -25% $36,861 0.61 0.32
Riverside-San Bernardino-Ontario, CA 649 1,003 354 55% $38,227 0.63 0.69
Rochester, NY 238 271 33 14% $33,405 0.62 0.50
Sacramento--Arden-Arcade--Roseville, CA 770 1,016 246 32% $40,959 1.06 1.01
Salem, OR (41420) 182 225 43 24% $29,941 1.42 1.28
Salt Lake City, UT 2,006 2,654 648 32% $63,187 4.10 3.60
San Antonio-New Braunfels, TX 1,594 926 -668.00 -42% $62,759 2.26 0.89
San Diego-Carlsbad-San Marcos, CA 1,504 2,132 628 42% $62,877 1.34 1.32
San Francisco-Oakland-Fremont, CA 2,919 4,010 1,091 37% $87,280 1.79 1.67
San Jose-Sunnyvale-Santa Clara, CA (41940) 810 1,459 649 80% $102,195 1.14 1.37
San Luis Obispo-Paso Robles, CA 139 205 66 47% $39,356 1.59 1.53
Santa Barbara-Santa Maria-Goleta, CA 122 132 10 8% $48,521 0.79 0.60
Santa Rosa-Petaluma, CA (42220) 111 175 64 58% $41,602 0.72 0.80
Scranton--Wilkes-Barre, PA 247 403 156 63% $31,560 1.25 1.46
Seattle-Tacoma-Bellevue, WA 7,570 14,226 6,656 88% $120,821 5.45 7.03
Spokane, WA 408 502 94 23% $60,997 2.38 2.09
Springfield, MA 88 102 14 16% $41,527 0.37 0.30
Springfield, MO 165 136 -29.00 -18% $30,943 1.09 0.62
St. George, UT 143 162 19 13% $30,715 3.74 2.85
St. Louis, MO-IL 1,102 2,260 1,158 105% $50,619 1.07 1.56
Tallahassee, FL 95 149 54 57% $40,553 0.72 0.82
Tampa-St. Petersburg-Clearwater, FL 2,990 1,252 -1738.00 -58% $44,406 3.34 0.98
Thomasville-Lexington, NC 10 241 231 2310% $40,154 0.30 4.97
Toledo, OH 88 335 247 281% $29,519 0.38 1.01
Tucson, AZ 468 373 -95.00 -20% $31,186 1.56 0.89
Vallejo-Fairfield, CA 42 127 85 202% $18,672 0.40 0.85
Virginia Beach-Norfolk-Newport News, VA-NC 301 241 -60.00 -20% $43,710 0.47 0.27
Washington-Arlington-Alexandria, DC-VA-MD-WV 1,250 1,639 389 31% $64,473 0.53 0.48
Wichita, KS 287 114 -173.00 -60% $28,774 1.22 0.35
Wilmington, NC 65 188 123 189% $42,190 0.57 1.17
Worcester, MA 278 653 375 135% $38,345 1.09 1.77




Conclusion

There’s no doubt we should keep an eye on the exciting growth in e-shopping. Yet we should also be aware that individual online companies do tend, by their very nature, to be smaller and less sturdy than traditional brick-and-mortar stores. They fluctuate rapidly and often drastically, which could be a little unsettling for towns where e-shopping is heavily concentrated.

Gwen Burrow is an editor at EMSI, an Idaho-based economics firm that provides data and analysis to workforce boards, economic development agencies, higher education institutions, and the private sector. Contact her here.



















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Erratum

Forrest Research
no
Forrester