Industry Report: E-Shopping & Auctions

The last decade’s surge of online shopping has given “window shopping” a whole new meaning. Since 2001, jobs in electronic shopping (e.g., Amazon — the Walmart of the web) have grown over 100%, while electronic auctions (think eBay) has behemothed a full 164%.

It isn’t just the comfort and convenience of clicking through images instead of prowling the mall; it’s the techy layout that scratches our gizmo itch. It’s the cool factor of browsing on a browser and not our feet, and having our pockets buzz with bid alerts.

In this post, we’re zooming in on the 2010-2012 growth of these two particular online shopping industries. Electronic shopping (NAICS 454111) is exactly what it sounds like. To use the US Census Bureau’s description, the sub-industry “comprises establishments engaged in retailing all types of merchandise using the Internet.” Electronic auctions (NAICS 454112) “comprises establishments engaged in providing sites for and facilitating consumer-to-consumer or business-to-consumer trade in new and used goods, on an auction basis, using the Internet.” We should also note that establishments in the auctions industry “provide the electronic location for retail auctions, but do not take title to the goods being sold.”

So What’s the Story Here?

E-shopping blows auctions out of the water as far as jobs are concerned: 131,000 vs. 18,000, over seven times as many. But auctions reels in scads more money per job per year: $93,000 vs. $58,000.

Auctions’ jobs multiplier is also more impressive: 5.32 compared to e-shopping’s 3.02. This means that for every job  in auctions, another 4.32 jobs are created elsewhere in the economy, while e-shopping yields an extra 2.02 jobs.

Both e-shopping and auctions have grown a good deal since we came out of the recession, but perhaps auctions is the real Cinderella story. With a 7.5% drop in employment in 2007-2008, it had more ground to regain, which it did with 29% growth from 2010 to 2012. E-shopping nosed up 4.5% during the recession and has continued to grow 22% over the past two years.

Electronic shopping (NAICS 454111):

Electronic auctions (NAICS 454112): 

Top MSAs

The tables below give us the top MSAs according to each industry’s concentration, measured in terms of location quotient (LQ). Click here for the full rundown, but concentration essentially tells us for which cities these two industries are the most unique and powerful. The higher the LQ, the higher the concentration, and some of these are ridiculously high.

Before we look at the tables, note that in small towns with small job markets, high concentration doesn’t necessarily mean a huge amount of online shopping jobs; it simply means that these industries are taking up a large percentage of all the different occupations in that town. E-shopping, for example, has the crazy high concentration of 70.3 in Fernley, Nevada, where it is the third biggest industry with 678 of the town’s 13,000 jobs. It’s a similar story for auctions in Meadville, PA (34.68).

But note that these MSAs aren’t where all the money is. It’s no surprise to see that Seattle (headquarters for Amazon) has the highest annual earnings per worker for e-shopping ($115,304) and San Jose (headquarters for eBay) is the magic place for auctions ($294,390).

So where are the industries flourishing the most in terms of jobs, not just concentration? Let’s take a look at the MSAs where the industries have shot up by sheer number of jobs/percentage growth since 2010 — sticking to the areas that have at least 100 jobs in 2012:

E-shopping’s most impressive proportionate growth is in Indianapolis: a solid 100%. Seattle and New York have gained the most jobs (over 3,000 new jobs each), and note also that Seattle has the highest concentration (5.76) of all these fast-growing MSAs.

The auctions industry has gained over 1,000 new jobs in Salt Lake City — a staggering increase of nearly 3,000%. Curiously, its concentration isn’t that high. For growth, concentration, and annual earnings, San Jose is still king.

Seattle & San Jose Face Off

Pitting the two HQs for these industries against each other, we see that e-shopping in Seattle and auctions in San Jose share the fastest-growing occupations: customer service reps, order clerks, and shipping, receiving, & traffic clerks. The jobs are growing at equal speeds in either industry, but e-shopping has more of them, while auctions generally pays better:

Self-Employed

Another interesting angle is to look at the number of self-employed across the nation within both industries. E-shopping has more self-employed jobs and these jobs pay better on average, but auctions’ jobs are seeing more growth. (Would that have anything to do with the swarms of people selling gimcracks on eBay?)

E-shopping:

• 22,200 jobs in 2012
• 7.1% growth since 2010
• $23,626 average annual earnings per job

Auctions:

• 9,978 jobs in 2012
• 13.4% growth since 2010
• $21,224 average annual earnings per job

Conclusion

Market research firm Forrester Research’s recent report estimates that the future of online shopping is anything if not bright. By 2016, not only will 192 million U.S. consumers will be clicking “checkout” (up 15% from 167 million in 2012), but those 192 million will also be spending an average of 44% more. This is probably linked to the fact that shoppers are also beginning to think the internet has the best deals.

Does this mean we should expect brick-and-mortar stores to flatline? Hardly. As we revealed in a recent post, the flourishing of specific subsectors in retail trade (e.g., warehouses/supercenters) certainly cheers up total gloom-and-doom predictions. What’s clear at the end of this study is simply that the online shopping industry has hitched itself to a rocket, and as long as we’re attracted to shopping with our thumbs, that rocket isn’t coming back down any time soon.

Data and analysis come from Analyst, EMSI’s web-based labor market tool. If you would like to learn more, please contact us. Find out more about EMSI and our data here. You can reach us via Twitter @DesktopEcon or by emailing Rob Sentz ([email protected]).