The New Retail: Gird Your Loins

37 thoughts on “The New Retail: Gird Your Loins”

  1. I was really sad to read about the person who shops online instead of going to one of two very nearby markets or to the farmer’s market down the street. I get that people want as little friction between them and their desires as possible, but humans are social creatures and removing social connections, even just for dumb things like shopping for broccoli, is dangerous. It’s the suburban cul-de-sac but in people’s minds, which is perhaps even more dangerous than in its physical manifestation. We need to connect with each other be it on purpose or through serendipitous encounters. People do all their shopping online but then moan about how horrible trying to date online is. While I do enjoy that sprawling hardware hells like the one you show photos of above will go away, I’m sad that even people living in cities are obsessed with shopping online (I see it here in Philadelphia all the time; all those delivery trucks block up all our bike lanes). I don’t necessarily harbor some illusory vision of a lost great time, I just think people need people and further separating ourselves out mentally if not physically isn’t good for society.

    1. In the case of my friend featured in this post – she’s extremely social. Her argument might be that time spent squeezing melons at the market is time she isn’t spending with family and friends having all sorts of adventures out in the world. She’s very far from a suburban cul-de-sac type. Technology itself isn’t inherently good or bad. It just let’s people do the things they already wanted to do.

    2. In all likelihood that shall never be. People are very much in a transition phase that’ll most likely be around for some time. I’d like to see more trade schools and public meeting places for the young and not-so-young. Also, it could benefit greatly to see kids attended to and chaperoned at more conservative-thinking social events i.e., dancing and sport, all of the arts, family neighborhood gatherings, and church activities. Happiness would grow from such activities, increasing friendliness and creating interest in being together. Good manners are a requisite, however, and the moral compass needs be in good working order before any such things can come into being and be maintained for everyone. Person- to- person relationships are here to stay, whatever one may think in the current circumstances. Oh and let’s not forget, we all require plenty of good sleep & a few pence in the purse! A sweet little garden sure would be nice too!

      1. We are in agreement. I’m forever dragging people in to my kitchen for dinners, introducing folks to each other, and cultivating new friendships all around. Old, young, all kinds of personalities. Social capital is extremely important to me. You never know who you may be able to help or who might offer help to you.

  2. Johnny,

    Another interesting article. Thanks.

    But I’m curious about the economics of all this. Delivering relatively small quantities of goods to individual addresses is a labor-intensive and hence expensive activity. That’s why the practice went away.

    In England in the late 60s, all tradespeople delivered. As a small boy I remember my mother ‘phoning the local grocer, dictating a shopping list and having what she had ordered delivered later the same day. Of course, rather than ordering online, she was using an old-fashioned telephone, but the concept was the same. The butcher and the baker delivered too, as did the milkman. Gradually though, local stores stopped delivering and a lot them were subsequently put out of business by cheaper, self-service supermarkets. Rising wages for shop staff probably played a part too. (I’m relating events in England, but I’m assuming much the same happened here in the US.)

    So how come grocery delivery has become viable again? I doubt technology has made that much of a difference: it’s still a labor-intensive practice. So is it a case of cash-rich but time-poor individuals being willing to pay the premium for delivery? That would be the optimistic interpretation. The pessimistic one is that wages have fallen enough to create a new servant class.

    1. First, home delivery services are currently operating at a loss on several levels. The goal of many e-commerce ventures is to agressively expand and dominate more markets. Tech companies can do this since they have preferential access to virtually unlimited amounts of near zero interest capital and investment pools. They don’t need to make money in sales so long as their stock values continue to rise – or the anticipation of an IPO or merger/acquisition is on the horizon fueling more investors to pony up.

      Second, the cost of operating physical buildings (supermarkets, big box stores, etc) along with all the associated employees is pretty high. So switching to increasingly automated facilities with direct delivery might make economic sense.

      Third, these new facilities are able to locate in spots where municipal authorities practically pay them to set up shop with lengthy tax holidays, subsidies, and incentives. The recent beauty contest around the proposed relocation of Amazon’s new headquarters saw every town in America hike up its skirt.

      History runs in long, slow, deep cycles. My great-grandparents came to America from Sicily a century ago. They had ten kids and lived in a one bedroom apartment in Brooklyn. They had to take in boarders in order to pay the rent. That involved my great-grandmother cooking for them and doing their laundry by hand. My great-grandfather lost both his legs in an accident working on the railroads. No pension. No disability payments. No severance. They were the malleable disposable workforce of their day.

      By the 1950s my grandparent’s generation had been transformed into solidly middle class people with full time jobs that paid a single worker (typically a man) a wage that allowed him to supported an entire family, own a home, buy a car, and occasionally indulge in small luxuries like a family road trip in August. That generation also received full pensions and health care in old age.

      What we’re seeing now is a return to the previous arrangements from a century ago – complete with the resulting social and political tension we saw in the 1930s. If we look at what happened between the tenements of Brooklyn and the tranquility of mid century suburbia we discover some seriously unsavory events of the 1940s. This is how our present circumstances will be resolved once again. It’s not going to be pleasant…

      1. What happens when those tech companies run out of venture capital? Virtually every delivery service, and even Amazon’s online shopping side are burning through cash and operating at big losses — all trying to gain some kind of monopoly on their markets so they can jack up their prices high enough to actually make a profit. It’s just a different kind of Ponzi scheme, in a sense.

      2. Hi! My impression is that those old ways of doing things need to thoughtfully reconsidered and appropriate changes made as soon as possible, bypassing the upheaval stage altogether. Blockchain is coming and the monetary system needs to free-up funding in this process. Eventually and world-over societies shall have to join the market(s), and people by necessity must be brought into the proceedings… there are vast possibilities. The past conceptualizations and practices can readily be changed with careful foresight and with recognition of an actual & universal benefit. No matter how one views the problems of survival, individuals and commerce have basic and mutually dependent functions that should be adequate in developing a more intelligent and natural change.

  3. Clearly, on line ordering and home delivery is here to stay and growing and morphing all the time. The analogy of food with Netflix only goes so far. One is a digital product with digital delivery, and one isn’t. Thus I will continue to stop in and get my own apples and bananas at either the big box grocery or twice a week from a local farmer’s market type operation with stands.

    More options for everybody I guess, and each of us can do what suits our needs. The dentist won’t be delivering online any time soon, nor the massage therapist. Generic and especially repetitive purchases, bring on the automation.

    Remember the Domino’s robot delivery? The Amazon drones? All these things are proving harder to roll out than initially prognosticated. I’d have to put driverless cars in that category as well, though it is still early days. I was curious to see a Segway in one of your photos. Some of us will remember when those came out, along with gushing statements of how the device was going to change humanity. Well, not really.

  4. For me it’s as simple a matter of: I’m seeking quiet and peace. Stores are loud and crowded, I’m sensitive to those (to the point that for long stretches in my 20s I simply didn’t get groceries!), and am relieved to find silent means to access food (I like gardens and fishing for the same reason). I don’t have a delivery option, so I drive to the store parking lot for pick up. Every time I feel relieved.

    I often wonder how many of our “new ways” are a response to the sensory overload that is so much of the world today.

    Johnny, I’ve been reading you for some time (subscribed), and would love to have you visit me at mine if you get the chance. I just did my thoughts on home ownership here: https://brainquirkcash.com/

    I enjoy your observations and thoughts on the shift in human geography, and its relationship to land. I was lucky to be offered a place in a region with 0% vacancy rate. The whole shebang is bizarro-world! I find your truth-telling comforting yet invigorating.

    1. The other side of this is the social side. Some people like to be around other people, even for mundane tasks. I think that physical stores will survive and be supported by these types of people, at least on some scale.

    2. I’ve read your to-buy-or-not-to-buy-a-home blog post. Good stuff. I suppose the short answer is, “it depends.” Give me a while to form a coherent reply…

  5. I use Internet shopping to find things that might take hours or even days of running around to physical stores to find – if they can even be bought in my area at all. That to me is the value of the Internet. I usually don’t use the Internet to buy articles if I already know where to get them locally, and can work the purchase in on a shopping trip. I never use the Internet for fresh food or clothes; things that I need to inspect, handle, or try on will still get me to the store.

  6. Maybe I didn’t catch it, but what is the reason your friend buys groceries online?

    I agree we’ll see big shifts to online delivery, a collapse in store sales and taxes, and an attempt by municipalities to tax deliveries. Unlike you, I don’t think the municipalities will succeed. I think it will just exacerbate the stress on municipal budgets. In the long term, it will be a huge benefit that cities stop chasing these big-box stores and retail malls, partly because the chase is a waste with the costs and the “tax incentives” and partly because it will kill opposition to redeveloping those areas, which are often very promising for mixed-use.

    1. I don’t know for sure, but I suspect my friend likes the convenience of online shopping. It’s a time saving thing. I guess not everyone likes squeezing melons in person.

  7. The big picture is this — technology is making it possible to do more and more from your homes. Entertainment — no need to go to the multiplex. Shopping. Some forms of work.

    Next up education, through some form of assisted homeschooling, or teachers working out of their homes with small groups of students. (I was directed to this blog by someone who read this post).

    https://larrylittlefield.wordpress.com/2017/01/15/schools-are-obsolete-ii/

    Gets rid of a whole bunch of excess costs that thanks to the exploding cost of public employee pensions can no longer be afforded.

    https://larrylittlefield.wordpress.com/2017/11/26/the-executive-financial-class-the-political-union-class-and-the-serfs-redux/

    How about health care? Aside from surgery and drugs administered intravenously, most in that industry don’t actually provide it, they provide advice. With more technology, more of that health care could take place at home too. And with miniaturization, that vehicle-based economy could return to doctors’ visits too.

    AND YET…

    The urban renaissance has been fueled by those who want a social experience, a “third place” other than work and home where they can interact with other people. Even as you can watch movies at home, for example, people turn out to sit on the ground and watch them in parks on screens a long distance away. And there are all kinds of manufactured events that people look forward to (as they always have). Communities that don’t have them are not communities.

    And people who could work on their laptops in peace and quiet show up in coffee shops and do it there. And it isn’t because you can’t make coffee at home.

    I remember 20 years ago the prediction that the internet would lead to the final abandonment of cities, because everyone could live in their own isolated rural homestead a la Frank Lloyd Wright’s “Broadacres City.” The opposite has occurred.

    When the 1961 zoning was passed, the amount of commercial space in NYC was downsized, because it was thought to be “excess.” But historically, NYC commercial space was cheap and abundant enough that all kinds of regular people could rent it for “clubs” of various kinds to get out the house. No one could afford that now.

    https://larrylittlefield.wordpress.com/2017/08/20/brooklyns-business-boom-retail-and-other-consumer-driven-sectors/

    And there is no room for charter schools, or for teachers to hang up their shingles and teach. That could be coming, as soon as the space passes through bankruptcy and falls to someone who buys it cheap enough to rent it for $3.00 psf per year. Wouldn’t that be great?

  8. There is San Francisco and there is… South San Francisco, less than 10 miles away. Within a 10 minute drive from my home are 2 Targets, 3! Costcos, 2 Home Depots, multiple Safeways, Asian markets, etc… and they are all packed to the gills at all hours. No parking and Black Friday level crowds year round.

    Why? I’m not sure but I suspect partly it’s because the big box store is an endangered species in high-cost coastal California and so the remaining stores are funneled into relatively affordable “B” markets like my own where the multinationals can make a killing from urbanites desperate to get any discount on our insane cost of living.

    Also, there’s many immigrants, like my wife, with a completely different mindset, coming from cash only, face to face, haggling cultures. They might eventually get their vacuum bags online, but they sure as hell aren’t gonna pay $50 for a tiny sustainable seafood bag from local fishermen. Rather, they’re gonna pay $10 for a unsustainably farmed fish and watch it pulled from the tank and get wacked and scaled on the spot.

    I’m not making any judgement calls. Just saying, retail is the intersection of culture, physical geography and profit margins. Super interesting topic.

  9. In discussing the state of retail with my friends, one theme (other than the ones in this article) comes up again and again: there are irrelevant and possibly dangerous people on the road and in the shops. It’s so much simpler just to shop on-line and let the delivery guy drop stuff at your door than to drive, park, walk across the acres of parking (vigilant about cars roaming the lot), find the item (if it’s there), find assistance (if it’s needed), wait in line to check out, and return home safely. Let somebody else dodge the traffic.
    Personally, I’ve established casual social relationships with the vendors at my (seasonal) farmer’s market, and there are cashiers at my grocery store who recognize me, but I buy musical instrument supplies on-line, rather than drive to a specialty shop.

    1. I have to ask… Do you live in a place with roving gangs and frequent gun fights? I have relatives who live way out in a remote spot where absolutely nothing ever happens. Yet the self selecting population out there is in perpetual terror that someone will snatch their precious children and white slave them off to Latin America.

      I signed up for a conference that’s being held at a hotel a few blocks from my apartment here in San Francisco. I noticed that on the website some people left comments warning folks not to attend. Evidently they got on to Google street view and thought the area looked really “dicey.” From the look of their profile pix these were older people who live in places like Kingman, Arizona. Any destination where buildings physically touch each other and strangers “loiter” on the sidewalk is an instant indication of poverty and violence. And this is a neighborhood where one bedroom apartments go for $5,400 a month and are occupied by the same people who created Google street view.

  10. Way back during the first dot.com era someone remarked that “if you believe in the future of e-commerce, buy a truck”.

    I fully agree that much new technology is designed to shift work off the company or its employees and on to the customer. Home delivery would be a counter to that. I still fumble with those checkin machines at the airport. Once it was so simple to just check in at a counter.

    1. “Simple” only after waiting 15-45 minutes in line to be checked in.

      I haven’t waited more than 5-10 minutes in the “self check” era. And while I also dislike the machines, I appreciate that the check in staff seems less burdened or rushed and more pleasant.

      1. The self check out machines don’t work well with produce or alcohol. If I’m traveling in an unfamiliar town and need to stop and get a bottle of wine on the way to a friend’s house for dinner I need a human. I’ve instinctively started to avoid chains and search for mom and pop shops.

        I’m not saying any of this is good or bad, or better or worse. I’m saying the parameters and proportions are changing and we’re all going to adapt.

        1. Oh, I also avoid self check in the grocery when I have produce or alcohol or more than I can carry in one hand. Likewise at Home Depot when I have 10 pieces of self-bagged hardware or lumber-by-the-foot.

          But I am also unwilling to let others pick meat and produce at the grocery, or lumber or trim at HD.

          My comment was entirely about the airport experience. I haven’t ever been a frequent flier, but it seems much easier and faster to check in and check baggage today. TSA has, of course, offset this.

  11. I think a good portion of the stores will be turned in real warehouses (not self-storage..). There’s no way we’ll be doing “just in time” or “warehouse on wheels” concepts requiring the incessant use of 54 foot semis into the future – either due to the increasing cost of vehicles, maintenance, & fuel, and/or because we can no longer maintain the roads to satisfactory level. Very few of the pre-trucking bonanza warehouses are still functional, so I see the failed grocery stores and big boxes in the asteroid belt around medium to large cities ultimately becoming that. In small town America, where there’s just the 1 supercenter that opened in 1989-99, it will simply fail and mainstreet will be re-inhabited. Metroplex cities that have no tangible center and are just an agglomeration of strip malls and single family housing as well as the far exurban communities, are probably going to turn into a post-post-industrial waste land.

    Just as americans became disgusted with the excesses of industry around the time the Cuyahoga river caught on fire and burned down several bridged, I think we’re going to become collectively disgusted with sprawl in next few years.

    1. I see different places evolving in different ways over time. We currently live in a world that contains both Vancouver and Aleppo. We live in a country that includes San Francisco and Flint. And within each town everywhere there are pockets of prosperity and poverty. I suspect the future will continue to be an all-of-the-above landscape as always.

      Disruptions (technological failure, war…) will eventually reshape our broad understanding of the vulnerability of international just-in-time supply chains with no reserves. That might focus our attention about building in more slack with a more durable set of arrangements.

  12. I find myself subscribing to a lot of Joel Salatin’s views on these subjects. The system of massive distribution centers, large hauling equipment and numerous bigbox stores complete with acres of parking simply doesn’t work because it never really fit us. Thus it is no surprise that it’s sooner or later going away by whatever ends.

    We should have more than 3 days worth of food set back – and we should know how to acquire more without going to a store, from start to finish. Not everyone should live on a farm, but every still needs food and shelter. It’s folly to rely on huge man-made systems – whether public or private – to do everything for us. It wasn’t that way until roughly a hundred years ago, and when this make-believe system of commerce goes away, it will be again.

    It’s generally better to deal with real people rather than e-transactions, to know how to do something rather than be told what you think, and to give your mind and body the exercise it was made for.

    1. Where I live – in the Seattle suburbs – physical banks are popping up like dandelions in spring, on every available corner…strange.

  13. Not to mention, what happens to the massive piles of cardboard generated by these deliveries? Thanks for your excellent blog.

    Miriam Mimms Nashville, TN —

  14. You describe another trend that I am hoping to miss out on …

    I come from working class, and my budget has always been the same. The goal of grocery shopping for me (and my family) is to eat well and healthy as cheaply as possible. For me, it’s the 21st Century version of the hunters and gatherers. Can I find the best buy (loss leaders, special buys, markdowns, sales) and feed my family on my meager funds? And can I do it without logging so many miles that any savings are eaten up by fuel costs? Plus I want to see what I am buying. The satisfaction I feel when I make my monthly shopping trip and stock the larder is my idea of entertainment.

    I do order some things by mail, just as my parents did when I was a child in the 1960s. Of course, the medium is the computer, rather than a printed order form from the catalog.

    It’s times like this I am glad I am mortal. I have finally reached the age where I don’t care to acquire any more technological advances and, in fact, am happy to know that someday I will age out of the system! :^)

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