With Heaviest Online Spending In History, Retail Employment Will Take Sharp Fall

By Douglas A. McIntyre Published Dec 10, 5:50AM EST

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December 6 was the biggest online sales day in history, at least according to comScore. Online buyers spent $803 million dollars that day. up 28% from the same day last year. It is a sign that online retail buying is accelerating. For the period from November 1 to December 6, the figure was up only 18% to $18 billion.

While Wall St. has assumed some correlation between the increase in online spending and the fall-off in same-store sales improvement, what has not come out is what will become of employment at bricks-and-mortar retailers. Wal-Mart (WMT) has over a million employees in the US. Target (TGT) has 352,000. Sears (SHLD) has over 350,000.

A lot of those jobs are on the line. The cost of selling products on the internet is far superior to marketing though stores. In the last quarter, Sears lost money. Amazon (AMZN) made $122 million on sales of just under $3.3 billion. Blockbuster (BBI) lost almost $14 million in the last quarter. NetFlix (NFLX) made over $21 million.

What retailers don’t want to say is that, although they will keep most of their stores open, the weaker outlets can probably be closed and those sales will be replaced by pushing customers to other locations or by getting them to buy online.

Online retail will probably move close to $30 billion this holiday. Target’s total sales in the last fiscal year were $59 billion. It is not hard to imagine that within two or three years, the online purchase of holiday gifts could pass Target’s revenue.

Retailers are dying now, especially those who rely almost exclusively on selling products in stores. Hundreds of thousand of jobs are on the line, and many of those will disappear before the end of this decade.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.