As Sears closes Sunday in Fargo, what does future hold for FM-area retail workers?
FARGO — Providing more space for Sears was a big reason the developers behind West Acres built the mall, which opened in 1972. It was the centerpiece tenant, the Fargo outpost of the world's largest retailer.
Nearly 45 years later, the walls are empty and the floor mostly bare, where only picked-over clothes and dozens of empty racks remain. Bright banners announced sales of at least 40 to 90 percent off the lowest marked price. Sunday, March 26, is the store's last day in Fargo.
"There's not really a whole lot left," said Bill Boyer as he walked out of the store a few days before it was to close. He said his parents took him here when he was a kid and, when he had a home of his own, he bought several appliances here. "I don't know. I'm going to kind of miss the store when it closes."
It's a scene happening in cities across the country. Sears Holdings said it would close 150 Sears and Kmart stores this year but, recently, management said it has "substantial doubts" the company could even stay afloat. J.C. Penney and Macy's, two of the bigger names in a wave of retail closures, have also announced plans to close 138 and 68 stores, respectively, though none in Fargo-Moorhead.
As traditional department stores continue their long decline, collapsing in part due to pressure from online retail, thousands of retail jobs are lost nationwide and certainly dozens here. But retail and employment experts aren't especially concerned about the fate of the retail workforce, though even more dramatic changes in the industry are likely on the horizon.
Dominant sector in F-M
The retail trade sector has long been a major employer here and around the nation, albeit one known for generally low wages and a large number of part-time workers. Those jobs continue to grow.
In January 2017, there were 16,200 retail-trade jobs in Fargo-Moorhead, 9 percent more than a decade ago, according to the U.S. Bureau of Labor Statistics. Nationwide, the number of these jobs has also trended upwards though they took a very serious dip during the great recession of 2007-2009.
The future may not be that different.
Job Service North Dakota forecasts that, between 2014 and 2024, the number of sales and related jobs, many of which are in retail trade, would grow 6 percent statewide. Data specific to the Fargo area was not available.
Note that included in these statistics are jobs that aren't in the same struggling industry segment as Sears, J.C. Penney and Macy's, such as jobs at grocery stores or auto-parts stores.
In the short-term, Fargo-Moorhead already has a shortage of workers, and it's especially severe in the service industry, including retail, said Carey Fry, who manages the local Job Service North Dakota office. Former employees from stores closing such as Sears won't likely have a hard time finding a new job, she said.
Carey noted that while many department stores and some other chain stores have shuttered, non-chain boutiques appear to be thriving in the area.
What the statistics don't reveal is how many retail jobs are full time and how many are part time.
Professor George John, chairman of the marketing department at the University of Minnesota's Carlson School of Management, said the difficulty of a job loss depends a lot on if it's a full-time job. Many retail workers that work in the back rooms, such as those who stock merchandise, are likely to be full-time workers who depend on the job for their livelihood.
He said floor workers are more likely to be part-time workers who may have taken the job for extra income — college students for example — and don't expect much permanence. They would suffer less.
Sears was the Amazon of its day, starting as a catalog company that put "understocked and overpriced general stores" out of business, according to Investopedia. After it opened its own brick-and-mortar stores, it grew to become the world's largest retailer in 1969. In Fargo, it outgrew its home in the Black Building downtown.
Analysts have blamed changing consumer habits, such as online shopping and fast fashion, for the decline of Sears, J.C. Penney and Macy's and even smaller retailers such as The Limited, which closed all stores a few months ago, including one at West Acres. They've had trouble keeping up with nimbler competitors such as Forever 21 and H&M.
But fast fashion and online retailing has also created new jobs in Fargo-Moorhead, like Abby Krusemark's.
She is the one-woman online division of Lot 2029 and she said she's seen many fast-fashion boutiques like the one she works for open here. Lot 2029, which opened here in 2013, employs three full-time workers, Krusemark among them, and five part-time workers, who are mostly college students.
Traditionally, retailers buy large amounts of clothing that follow the latest fashion of the season. Fast fashion is when retailers buy smaller amounts of clothing that follow the latest fashion of the last few weeks; typically the quality is not high and the prices very low because consumers don't expect to wear the clothing for very long.
Lot 2029, which has stores in Bismarck and Sioux Falls, S.D., as well as a sister store in Fargo, buys only six of every item, two in each of three sizes, Krusemark said. The store expects to sell out each item within about a week, she said, meaning its customers can expect to see something new each week.
"People are really drawn to finding items that are unique and items that other people are not going to find somewhere else," she said.
Lot 2029 has done well enough that its online division has moved out of the back of the store on Main Avenue downtown to the basement of another store nearby. The mother-daughter team that owns it, Madonna and Hope Wald, plan to open another boutique called Onyx and Pearl in the next few months, which Krusemark will manage.
There are signs, though, that the retail-trade sector's dominance as an employer has eroded.
In 1991, these jobs made up 14 to 15 percent of all jobs in Fargo-Moorhead. Today, they make up 11 to 12 percent. Nationwide, the trend line was similar.
Job Service North Dakota forecasts that retail trade's share of employment statewide will stay roughly the same between 2014 and 2024 even as some sectors, such as health care, see double digit-growth.
But the forecast is based on historical data and surveys of employers. What it may not account for is disruptive technology such as automation.
According to the McKinsey Global Institute, retail trade is among the sectors that are most vulnerable to automation. In its January report, "A future that works," it said that 53 percent of tasks done by retail workers can be replaced by machines. Collecting and processing data, a task cashiers perform when they ring up customers, is already automated in some stores that offer self-checkout kiosks. Amazon's new grocery store does away with the kiosk and just tracks all items on a customer's person as he or she leaves the store. In the future, workers involved in stocking could be replaced by programs that manage inventory and machines that move products.
McKinsey's report suggested that workers could be retrained to troubleshoot when the machines develop glitches.
One task that many retail workers do very well that machines can't is "interfacing with stakeholders," which is what salespersons do when they greet and help customers with purchases.
John, the marketing professor, agreed. He said personal service is how brick-and-mortar stores can differentiate themselves from online retailers where customers are essentially already buying from a machine. "On the whole, retail is still a labor-intensive, human-intensive business," he said, at least in the near future.