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Central Penn Business Journal, May 16, 2014
So many e-commerce fulfillment jobs are coming to Lancaster County that workers from other counties will likely be needed to fill them all.
Projections show the new Forever 21, Nordstrom and Urban Outfitters centers together employing about 1,100 people, with potential for that number to rise to 2,800. Currently, the warehousing and storage industry employs more than 3,600 people in the county, and previous projections had that rising to more than 4,000 over the next decade.
“Lancaster County probably will not be able to do it alone,” said Scott Sheely, executive director of the Lancaster County Workforce Investment Board. But given how far people will drive to a job, he said, the potential labor pool widens to about eight counties that together employ more than 19,000 people in the industry and can likely meet the demand.
The WIB doesn't know exactly what the jobs at these centers will be, Sheely said, because the companies have not yet really engaged the workforce system; typically that happens only after a company has tried to fill its roster and finds it needs a boost.
Generally speaking, however, it varies a lot depending on the sophistication of the facility, with the simpler ones requiring a larger but lower-level workforce, and the automated ones needing fewer but more highly skilled workers. Overall, Sheely said, these centers offer employees some room to rise, but for those in lower-skill, lower-wage positions without a clear path to advancement, WIB will work to help them find a way to keep their careers moving.
As for training, Sheely said, WIB already has some short courses on subjects such as forklift driver training and is looking at further developing its logistics management offering if needed.
“Mall stores are flat or slightly down over the most recent years,” said Ross Kramer, co-founder and CEO of Lititz-based digital marketing firm Listrak. With e-commerce growing about 15 percent a year, he said, it makes sense that these large retailers are investing in facilities positioned to ship items to their customers fast.
For a long time, Kramer said, e-commerce represented about as much business for a typical large retailer as its best single store did. But now with the retail growth concentrated in the e-commerce sector, “if they don't invest, their lunch is going to be eaten by Amazon. Amazon has gotten this fulfillment thing correct.”
As Lancaster County is seeing, Kramer said, the billion-dollar retailers have the size and scale to mount the efforts on their own. Smaller companies facing the same trend are getting help from third-parties in areas ranging from logistics to Listrak's metier, customer relationship management. Listrak's core customers are mid-market retailers with less than $200 million in sales annually, Kramer said, and demand for its services is booming.
“Listrak grew 70 percent last year,” he said. “We added 50 percent to our staff just last year.”
John W. Biemiller is executive vice president and COO of the Economic Development Company of Lancaster County and EDC Finance Corp. EDC had some involvement in getting Urban Outfitters to come here, he said, and, of course, economic inducements can play a big role in those decisions. But in the end real estate is still about location.
“Those incentives run out, and once they run out, you want to be in a place that's good to do business in,” he said. And on that consideration, all the things that have long made Central Pennsylvania a distribution hub are now drawing e-commerce centers.
EDC just unveiled a new marketing initiative designed to attract business here, and e-commerce fulfillment is not on its short list of targets. Instead, EDC is focusing on live-event staging, food processing and pharmaceuticals.
Quoting EDC's consultant on the project, Biemiller said, “They said to us, 'You are an ideal location for distribution centers, so to some extent they're going to be interested enough because of your location, so you are going to be responding to their inquiries anyway.'”
So, Biemiller said, although EDC is happy to see all these e-commerce fulfillment centers choosing Lancaster County, it's going to focus its marketing dollars on parts of the economy where the economic argument for the area has not yet been made quite so resoundingly.
Nordstrom trades on the New York Stock Exchange under the ticker symbol JWN. In addition to its online presence, the Seattle-based company is in 36 states with 117 full-line stores and 151 Nordstrom Rack locations.
Urban Outfitters trades on the Nasdaq under the ticker symbol URBN. The company is based in Philadelphia and, in addition to its titular brand, includes Anthropologie, Free People, Terrain and BHLDN that together have more than 500 stores in the United States, Canada and Europe, in addition to websites and catalogs.
Forever 21 is based in Los Angeles and is privately held. According to business research company Hoover’s, the retailer operates about 600 stores under the Forever 21, XXI Forever, Love 21 and Heritage 1981 brands throughout the Americas, Asia, the Middle East and the UK, in addition to its e-commerce site.