If only his voters had paid attention to the real world, they would have been worried about an entirely different industry: "The retailing industry employs 15.9m people, accounting for one in nine American jobs."
The retail industry is shedding jobs, and closing stores, are frightening speeds:
Since January the industry has shed 50,000 jobs, with more lay-offs sure to come. Mr Mathrani reckons that, for shopping centres to match demand, 30% of space should close permanently. In one particularly gloomy scenario, all retail property would shrink by as much. If staff dropped by the same proportion, 4.8m would be at risk of the sack—around half the number of American jobs lost during the financial crisis. Eventually, even more may be laid off, as remaining stores cut costs through automation.Did you notice that "a" word? Automation!
The result is that America’s rich landscape of shops now looks like a dangerous glut. Since the start of 2016 Macy’s has announced that it is closing 140 shops. J.C. Penney said in March that it would shut 138. More closures are sure to come. Department stores’ floor space has contracted by 11.5% since 2006, but sales have shrunk more than twice as fast, according to Green Street Advisors, a real-estate research firm (see chart 2). To reach the inflation-adjusted sales productivity of 2006, at least another 800 department stores would need to close, reckons D.J. Busch at Green Street.In the world of politics, it is coal that translates to diamond when it comes to votes:
This slow melt has so far attracted little attention from politicians, despite jobs in retailing outnumbering those in coal mining, which has caught the political eye, by a factor of 300.Meanwhile, automation in retailing is taking on another fundamental aspect of the transaction: price.
The right price—the one that will extract the most profit from consumers’ wallets—has become the fixation of a large and growing number of quantitative types, many of them economists who have left academia for Silicon Valley.Yep, "the right price can change by the day or even by the hour" thanks to automation, which is killing the real world stores:
Guru Hariharan uncapped a dry-erase marker in a conference room at Boomerang’s headquarters in Mountain View, California. He was talking about what had led retailers to this desperate place where it’s necessary to change prices multiple times a day. On a whiteboard, he drew a series of lines representing the rising share of online sales for various kinds of products (books, DVDs, electronics) over time, then marked the years that major brick-and-mortar players (Borders, Blockbuster, Circuit City and RadioShack) went bankrupt. At first the years looked random. But the bankruptcies all clustered within a band where online sales hit between 20 and 25 percent. “In this range, there’s a crushing point,” Hariharan said, clapping his hands together for emphasis. “There’s a bloodbath happening.”
Beyond this crushing point, traditional retailers with both a brick-and-mortar and an online presence feel compelled to compete purely on price. Hariharan talked wistfully of the days when he’d walk into RadioShack and have a salesperson direct him to the exact connector cable he needed. But once retailers enter the crushing zone, expenses like staff, training, and customer support typically are slashed. Profit margins keep falling nonetheless—why go to the store at all if no one there can help you?—and a death spiral ensues. (RadioShack traced just this path before filing for bankruptcy in 2015.)