FRIEDRICH-EBERT-STIFTUNG – Artificial Intelligence and Auto­mation in Retail goods extremely rapidly through ›click-and-collect‹ or rapid home deliveries. The fulfilment centres that support these modes of retail need minimal decoration and can be located in sites with lower rents substantially reducing overhead costs compared to bricks-and-mortar stores. Q-commerce, meanwhile, is a rapid growth sector in urban areas. New en­trants are disrupting the retail sector through extremely rapid (15 minute) delivery offerings. Q-commerce firms are able to offer rapid delivery for even small scale purchases through the use of on-demand delivery from close-to-consumer warehouses/micro-fulfilment centres, including extensive use of automation, order processing and labour management technology(for delivery drivers/riders). Firms such as Getir, Gorillas, Bolt, Dija and others – many backed by substantial venture capital – are competing ruthlessly to attract custom­ers in this market sector. Together, these developments place growing pressure on bricks-and-mortar stores. A further challenge, highlighted by focus group participants, was the different regulatory frameworks that apply to on­line versus bricks-and-mortar retail. These range from the need to pay local taxes/business rates and rent on prime real estate, to the requirement for bricks-and-mortar stores to charge for plastic bags while no such requirement exists for packaging in online sales. Such regulations increase the cost of in-person purchases relative to online, which when combined with increased overheads associated with bricks­and-mortar retail(such as higher rents and business rates in town centres) and greater flexibility offered by online retail, further squeezes margins for bricks-and-mortar stores. There were calls among focus group participants for policy inter­ventions aimed at evening up the regulatory environment. This was seen as particularly important given the imbalance in economic power between e-commerce platforms and larger retailers on the one hand and small retailers on the other, particularly as the latter account for the majority of employment in the retail sector. As noted previously, while online purchases as a proportion of all sales were increasing before Covid, the pandemic has accelerated this trend – and these pressures, exacerbated by lockdowns during the pandemic, have led to a number of store closures and organisational restructuring. There were concerns among focus group participants that employment security and working conditions of workers in the retail sec­tor had been undermined by the growth of e-commerce, as work in the sector shifted from directly employed shop workers to warehouse workers and delivery drivers on pre­carious contracts. Even within warehousing and logistics, the entry of e-commerce players to the sector has undermined job security as flexible contracts proliferate. This leads to frag­mentation of the workforce with workers no longer working directly for one employer but instead working as independ­ent contractors, potentially for a variety of platforms. For example, IKEA have partnerships with TaskRabbit to provide assembly and repair services. This fragmentation can make union organising and recruitment challenging. There were also concerns about the gendered nature of the shift from retail to logistics work. In-store retail work was often seen as providing flexible work opportunities for younger workers and women with caring responsibilities, even if not particularly well paid, while warehouse and delivery work is often more physically demanding and is a sector dominated by male employment. One focus group participant noted that the emergence of Amazon as a key player in retail had done nothing to improve the job quality of workers in the sector, partly because their reliance on flex­ible contracts puts pressure on other retailers to follow suit in order to respond to changes in demand, but also due to poor working conditions in their warehouses. 17 Concerns were raised that the number of staff devoted to fulfilling online orders had not kept pace with the increased demand during the pandemic, leading to work intensification in the sector. Overall, while e-commerce presents a number of benefits for consumers, such as increased flexibility and convenience and competition on price, these benefits have so far come at a cost for many retailers and retail workers. There are concerns that the increased competitive pressures presented by the growing importance of e-commerce and the asso­ciated imbalances described above had led to many retail organisations closing or being forced to review their offering and deciding between taking a ›low-road‹ approach, com­peting on price and squeezing work conditions, or a ›high­road‹ approach: competing on customer service from skilled and well-remunerated workers and providing a distinctive offering. 2.2 CASHLESS/CONTACTLESS PAYMENT SYSTEMS Digital payments systems encompass a suite of technologies including contactless card and mobile phone payments, scan-and-go checkout systems utilising smartphone apps, and digitalised forms of store credit prevalent on sites like Amazon. These systems offer considerable convenience and flexibility for consumers but also raise privacy and security concerns about surreptitious data gathering. Initially the preserve of large retail chains, basic contactless card/mobile payment systems are widespread in small/local retailers and even crafts and farmers market stalls due to rapid decreases in cost and applications linked to mobile phones. The accessibility of such systems due to falling price ensures smaller retailers can continue to compete in a period where cash use has fallen significantly. However, smaller retailers continue to remain at a disadvantage due to the possibilities for data capture, analysis, processing and enabled by heavily-promoted scan-and-go and online account-based payments used by large retailers. Efforts to address this disparity remain small but are evident. In Bel­gium, for instance, smaller local retailers have collaborated in the design of an e-payments connected to local cross-retailer loyalty schemes. In these schemes customer data is retained and pooled amongst small retail participants, permitting personalised offers to be made to consumers in line with practices already established at larger retailers. 6