30 November 2009

An entire retail world at my fingertips - but is it worth the cost?

As I walked through a Best Buy this weekend, I was amazed to see how many artists were still represented in their CD department.

Remember those? The five-inch shiny disks we used to buy music on before people under 30 (and some over) started going to the digital convenience of iTunes? Yeah, I thought they were gone, too, but they aren’t. I can remember the last CD I purchased (a Nine Inch Nails album in 2007) like it was yesterday. It was unlike buying something on iTunes, which is convenience itself. I had to drive to the store, walk through said store, use my eyes to find the disc, walk it up to the register, and purchase it. Once I was in the car, I had to unwrap it and manually insert it in the disc player. How exhausting!

While I love the fact that iTunes offers rare and strange things that I would never, ever see on a Best Buy shelf, I wonder if the shift between online and offline retailing is something that truly benefits us. I’m no economist, but it would seem that offline retailing would be more beneficial in the long term, because it requires employees, people to maintain the physical infrastructure, contracts with the people who make the merchandise, people who ship the merchandise – a long chain of economic ties. Online retail, however, requires far less of these – no employees to speak of (or at least not nearly as many as an actual store) fewer shipping needs (as items are likely shipped from a warehouse directly to the customer) no physical infrastructure to build or maintain, greatly-reduced local tax base and so on.

It’s become apparent that technology has changed how we live our lives in ways that unimaginable even several years ago. Who would have thought, for example, that digital camera technology would become so dominant as to render all of the Pro-Ex and Ritz locations an endangered species (taking with them all of the film manufacturing jobs)? Who would have thought that we’d see shrinking CD selections at stores like Best Buy? Who would have thought we'd see formerly-vital video rental locations like Blockbuster Video shuttering stores because it can't compete with RedBox and Netflix? Who would have thought that the U.S. Postal Service, an organization that was formerly seen as a lifetime job, would be posting billions of dollars in losses and shuttering facilities because people don't write letters anymore? Who would have thought that’d we’d see entire large chains like Circuit City fall under the combined weight of Best Buy’s market dominance and the Internet?

If it seems like the so-called economic recovery isn’t apparent, I think part of it has to do with entire industries as we knew them not even a decade ago no longer existing in a meaningful form. Circuit City alone took more than 30,000 jobs with it when is collapsed earlier this year. And if you take away those jobs, there are going to be people spending less money, right? How does this benefit us?

While the Internet has all but turned the retail world on its head, I don’t think it’s something that benefits us long term, much in the way that I don’t think that shipping off many of our entry level manufacturing jobs overseas has done us any favors. No one can stop the inexorable march of technology, but I can’t help but think that there’s a price to be paid in terms of human employment, be it here or elsewhere in the country. Remember, behind every shuttered Ritz Camera and Circuit City facade lingers memories of employees with families to feed that contributed to the local tax base. Can we really say that Amazon or eBay (both of which I happen to love, full disclosure) have that same benefit?

Here’s a glimpse of things to come. When my dad was looking at a dual VCR/DVD player at Best Buy, he asked me to run to Target to price compare. When I came back with the answers, he asked me an interesting question. “Where else could we go to look for these?” We sat there in silence. No easy answer came to mind - at least anything in the physical world that we could drive to. Perhaps this is the future of commerce – sending money to people unseen in places unknown, and then wondering why local retail seems to be withering on the vine.

There is a cost to have this convenience we’ve all come to expect, and whether or not we realize it, it’s something we’re all paying, be it as a customer with few local options or someone who worked in an industry that no longer exists.

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