2013-08-02

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 Forrest 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.



 

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).



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.



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%).

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.

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):

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.

Show more