of the United Kingdom’s capitol city.
“We don't rise to the level of our expectations, we fall to the level of our training.” - Archilocus
What in the world happened when the calendar ticked over to 2020? We ended 2019 on such a positive note - jobs reports were up, the economy booming. U.S. retailers, especially online retail, had a banner holiday in 2019.
And then 2020 happened. Suddenly we’re now in the midst of a global economic crisis under the threat of COVID-19 becoming a pandemic, this week saw the start of a global oil war, and DTC darlings are falling down left-and-right.
Maybe Archilocus was onto something - and I fear we’re not prepared for the road ahead. I fear that our level of training in eCommerce is, and has been for the better part of 10 years, to prey on basest of human emotions in order to elicit a sale from a customer.
This group of dark patterns and manipulative techniques disguised as best-practices are a trendline heading in the wrong direction, a phenomenon we’ve been calling Late-Stage Retail here at Future Commerce (a topic we've discussed at length in Episode 116, "Late-Stage Capitalism").
Three years ago, The Atlantic magazine wondered why suddenly everyone was talking about late capitalism, especially given its Marxist origins. The author, Annie Lowery, traced how the term came into existence (although Karl Marx himself didn’t coin it, his followers did), and how it has morphed over time. Ultimately, she explains:
“Late capitalism,” in its current usage, is a catch-all phrase for the indignities and absurdities of our contemporary economy, with its yawning inequality and super-powered corporations and shrinking middle class.”
This definition piqued our interest here at Future Commerce, because for a while now we’ve been looking at the indignities and absurdities of modern retailing, as well as the impact of the inequalities of the sector on middle- and working-class people.
This raises the question: how is retail affected by late stage capitalism?
Late-Stage Retail
There are many indignities in retail, and some are too ridiculous to even be amusing anymore, though some are worse than others. I’m sure every reader has their own favorite example of absurdity, whether it's a $425 pair of jeans made to look muddy or an expensive internet-connected juicer.
Growing inequality is harder to laugh at. We are seeing a rise in luxury malls and brands alongside a spate of store closures that serve middle and working-class people. The vast economic divide also means one side gets to call the shots, while the other faces increasingly cruel situations.
Many of the businesses that have closed over the last few years, like Payless, Dress Barn, and others may benefit those who are calling for an end to boring retail, but those stores closings along with mall closings may have actually caused problems for families on a budget in areas without a lot of options.
But we also see encouraging trends; retail “heroes” who are seeking to serve bootstrapped communities, create and market sustainable products, pay their employees a living wage, and treat their suppliers ethically and fairly. Unlikely heroes like Dollar General, which announced it will open 975 new stores in rural areas as well as expand its produce sections in order to alleviate food deserts. They’re also the founders of numerous DTC brands who are focusing on sustainable and ethically produced products, B Corp-certified companies, and even the Business Roundtable, which recently redefined the purpose of a corporation in ways that speak directly to our Future Commerce values.
For us, the standout brands are those who aim higher than just creating a business that sells something: they foster the growth of communities, and they have a purpose that seeks to better the lives of people.
Can the collective efforts of our heroes reverse the “indignities, absurdities, and yawning equalities” of Late-Stage Retail? We certainly hope so, but we must recognize the inherent conflict they face: transforming retail so that it works diligently to serve all the communities that retail businesses are in. Wealth generation is the top priority of investors, but that doesn't mean that retail cannot provide what customers actually want.
Gilded Age 2.0
Amidst the non-stop talk about a retail apocalypse, there’s one sector whose star shines brightly: Luxury. According to Deloitte, the luxury market racks up $247 billion in sales, and enjoys 10.8% growth in year-over-year sales. Luxury apparel in particular is growing faster than any other sector, including technology, consumer goods, and the automotive and financial industries. Even personal fitness is going luxe -- brands like SoulCycle, Peloton, and (my personal favorite) Tracksmith.
New brand offerings are catering toward extreme ends of the marketplace, leaving a glut of customers in the middle class without options. Says Web Smith of 2PM:
Contrary to popular opinion, retail isn’t dying. Instead: changes in earnings, increased debt loads, and decreased consumption rates are beginning to polarize some consumers. The middle is being squeezed and retail failed to anticipate this socio-economic shift.
The middle, indeed, is shrinking. At the close of 2019, there were more “haves” in America than “have nots.” And while “lower class” has grown, the upper-income bracket is growing faster, and has been for the past 10 years, causing many retail brands to aim toward that growing market segment and away from middle-class offerings.
Working-class people in less densely populated areas are the ones who are experiencing the real retail downturn.
US retailers closed 9,300 stores in 2019. The collapse of Dress Barn, JCPenney, and Payless Shoes hit the lower middle class hard. Less-publicized closures from Walgreens, Family Dollar hit even harder.
In theory, Middle-class consumers still have plenty of access to retail. According to the Economic Innovation Group some 86.5 million people, many of whom are middle class, live in prosperous zip codes with lots of retail opportunities. Still, the stores that built their businesses around the middle class have shuttered at higher rates. In 2017, 16 companies accounted for almost 50% of all retail store closings -- virtually all of whom “built their businesses on the 20th century’s middle class suburban boom.”
Wow.
So how are things going for the middle classes? Just Google “things the middle class can’t afford anymore,” and you’ll see countless articles explaining why health care, college educations for their children, pets, gym memberships, vacations, new cars, even visits to the dentist are out of reach.
Data suggests that this link isn’t coincidental, and I believe as we head into uncertain financial times we will resort to more overt shifts of strategy to further abandon the middle class.
Unbridled capitalism isn’t tolerated; why is unbridled retail okay?
Unrestricted capitalism -- the unbridled drive to grow an economy and wealth for its investors at the expense of all other priorities -- is fundamentally scary. Fortunately, it’s more myth than reality. Numerous hallmark legislative acts -- Federal Food, Drug, and Cosmetic Act, Fair Debt Collection Practices Act, the Fair Credit Reporting Act, Truth in Lending Act, Fair Credit Billing Act, the Gramm–Leach–Bliley Act -- put restraints on capitalism. And in a wholly capitalistic world, there would be no bank or auto company bailouts, billion dollar subsidies to oil companies, or tax breaks that relieve some of the most profitable companies in America of a federal tax burden.
But retail is different: Congress has never mandated Publix or Kroger to open or remain in rural areas, nor has it forbidden Walmart to move across county lines in search of bigger and better tax incentives. The best local governments can do is cajole retailers into serving their communities with promises of multi-million (or in some cases billion) dollar tax incentives. Other than that, it’s pretty much laissez faire. That leaves retailers answering to their shareholders exclusively, which means major mall owners and retail brands focus where they will extract the best ROI: prosperous locations.
There’s another bit to this story. According to a Retail Dive analysis, more than 15% of brands acquired by private equity firms have filed for Chapter 11, including Toys R Us and Sports Authority. Leveraged buyouts saddle retailers with crippling debt, and many eventually shutter, although investors are richly rewarded. Such brands largely served the middle class.
What’s At Stake
At its core, retail is a division of labor: shoemakers make shoes, farmers grow food that grocers sell. Thanks to this division of labor, we are free to pursue occupations of our choice, knowing we can procure the necessary goods and services to sustain our families.
Its impact doesn’t end with confidence. Retail has direct effects on:
- Home Equity Value. Homes that are less than a mile from a retail center are worth up to 8% more than those further away. A local Walmart can increase home values by 2-3%, according to an economics research paper from the University of Chicago and Brigham Young University. And research conducted by Zillow in 2014 shows that homes near a Trader Joes and Whole Foods have a median value of $406,600 and $376,000 -- significantly above the national average of $229,000.
- Employment. Retail is a significant employer, supplying nearly 16 million people with jobs, per The Bureau of Labor Statistics. Store closures obviously lead to higher rates of unemployment, Since 2017, retail has shed 140,000 jobs.
The nation’s youth have faced the worst impact. The Labor Department reports that in 1990 there were three million retail jobs for people aged 16 to 19; today it’s closer to one million.
- Regional Economies. The impact of retail closures isn’t limited to affected store employees; closures have a ripple effect in the local economy, including cleaning services, security staff, attorneys and accountants. With less money in their pockets, regional consumers shop less, which means less sales tax for municipalities.
- Health. The Louisville Courier Journal has been studying the impact of grocery store closures in the region on the health and well being of local residents. The paper writes:
"Across Louisville, more than 120,000 people are living with food insecurity, meaning they don't have reliable access to healthy, affordable food. The issue is linked to higher rates of illness and lowered life expectancy in predominantly low-income neighborhoods."
One hopes that’s a rallying cry for grocery executives to follow Dollar General’s lead and service communities within food deserts.
Retail is Getting Cruel
A telltale sign of Late-Stage Retail is the rise of cruelty -- to customers, employees, suppliers, and even to nature. It’s difficult to overlook the atrocious ways customers are now treated. Retailers and tech companies vacuum up vast amounts of consumer data, unbeknownst to the individual customers, in order to prompt them to make purchases that they may not be able to afford.
Online retailers deploy a host of dark patterns -- creating a false sense of urgency -- to increase sales conversion and AOV, regardless of the impact on the end consumer.
Consider the egregious dark pattern, sneak into basket, a tactic in which a site “sneaks” additional items into a customer’s cart, which the customer must a) notice and b) actively delete.
All too often online retailers require the user to call or mail a request for cancellation or a full refund (as in, print out a form, fill it out, find an envelope, put a stamp on it, drop it off in the mailbox, and wait for the retailer to act). Wealthier buyers may not bother, which is probably why so many retailers deploy the tactic, as Princeton Research documented this past summer.
Shop Like It’s Your Job
As Brian pointed out in Insiders #009, consumption is part of our job, especially in our late-stage retail world. We need to buy lots of stuff, consume growing amounts of content, and purchase (and then over-share) unique experiences. If we don’t, the responsibility for a flailing economy rests solely on our shoulders. And on top of all that spending, we must get value out of everything we buy, and if we don’t, we’re not holding up our end of the bargain.
Even acts meant to aide consumers have created more friction than they have prevented, requiring numerous implicit-and-explicit “clickwrap” agreements that result in popup after popup an agreement (with no actual choice) to be tracked, to be monitored, and forcing the consumer to repeatedly dismiss various forms of attempts towards conversion.
Even acts meant to aide consumers have created more friction than they have prevented, requiring numerous implicit-and-explicit “clickwrap” agreements that result in popup after popup an agreement (with no actual choice) to be tracked, to be monitored, and forcing the consumer to repeatedly dismiss various forms of attempts towards conversion.
And so with Late-Stage Retail, consumption becomes constant work, a requirement, a mandate. Shopping, reading, watching, posting, listening, eating, vacationing, partying, decorating, former fun activities- all require more work. Just because something is entertaining or addictive doesn’t mean it’s restful.
The New Atlantis, a journal of technology and society, succinctly highlighted this dichotomy:
“Judging by how Americans spend their money — on shelter magazines and kitchen gadgets and home furnishings — domesticity appears in robust health. Judging by the way Americans actually live, however, domesticity is in precipitous decline. Families sit together for meals much less often than they once did, and many homes exist in a state of near-chaos as working parents try to balance child-rearing, chores, long commutes, and work responsibilities.”
And that’s Late-Stage Retail in a nutshell: consumers will buy ever-more-expensive goods they can’t afford now, on credit (or installment payments), and eventually, default under the crushing weight of debt while the economy slows, jobs become scarce, wages shrink. And whose fault is it? The consumer’s, of course.
We wondered aloud on Future Commerce in 2019 -- what would happen to disadvantaged consumers with older smartphones and prepaid data plans? If their access to goods and services dries up as one retailer after another goes belly-up, does that put them in a better or worse position as a consumer? Where will they go to shop? Will they shift to digital channels? Is Amazon the primary beneficiary of this channel-shift? Is that why Amazon introduced reduced-price Prime benefits for those on government assistance?
One can only wonder, then, what the future holds during a global epidemic when human interaction is limited and shoppers are forced to use eCommerce to conduct most of their purchases.
It’s time to recognize the responsibility we have in the retail community. If our “level of training,” as Archilocus describes it, is selling based purely on FOMO or social status, then what world are we creating? Are we treating people with dignity in the path to purchase?
I fear that our “level of training” is to prey upon base instincts and desires, to use trust-building language and offers to dismiss doubt that they’re making an ill-considered purchase, and then to make life difficult for them when they wish to “undo” the transaction.
We can, and should, do better.
What’s ahead
Over the next year, we will explore the many issues presented here. Specifically, we will explore:
- The state of retail today
- What we believe the industry should strive for
- The cost of failure
- How we can ensure our future
- The mindset and philosophy
Future Commerce makes no pretense about predicting the future; we seek only to identify and report on emerging trends so that retailers and founders can shape their future.
It’s more important now than ever before as we may be facing a troubled time for the global economy.
We also make no pretense about objectivity. We use the bullhorn of our podcast to put a spotlight on the brands and founders who are setting a good example, and we have no intention of curbing our enthusiasm for the things they set out to do. We see heroes at all levels of retail -- enterprise-class, mid-tier, start-up -- seeking to make meaningful changes to eradicate the absurdities, indignities and yawning inequalities of Late-Stage Retail, and we applaud their efforts.
Is Late-Stage Retail a thing? Yes. And we can do something about it.
“We don't rise to the level of our expectations, we fall to the level of our training.” - Archilocus
What in the world happened when the calendar ticked over to 2020? We ended 2019 on such a positive note - jobs reports were up, the economy booming. U.S. retailers, especially online retail, had a banner holiday in 2019.
And then 2020 happened. Suddenly we’re now in the midst of a global economic crisis under the threat of COVID-19 becoming a pandemic, this week saw the start of a global oil war, and DTC darlings are falling down left-and-right.
Maybe Archilocus was onto something - and I fear we’re not prepared for the road ahead. I fear that our level of training in eCommerce is, and has been for the better part of 10 years, to prey on basest of human emotions in order to elicit a sale from a customer.
This group of dark patterns and manipulative techniques disguised as best-practices are a trendline heading in the wrong direction, a phenomenon we’ve been calling Late-Stage Retail here at Future Commerce (a topic we've discussed at length in Episode 116, "Late-Stage Capitalism").
Three years ago, The Atlantic magazine wondered why suddenly everyone was talking about late capitalism, especially given its Marxist origins. The author, Annie Lowery, traced how the term came into existence (although Karl Marx himself didn’t coin it, his followers did), and how it has morphed over time. Ultimately, she explains:
“Late capitalism,” in its current usage, is a catch-all phrase for the indignities and absurdities of our contemporary economy, with its yawning inequality and super-powered corporations and shrinking middle class.”
This definition piqued our interest here at Future Commerce, because for a while now we’ve been looking at the indignities and absurdities of modern retailing, as well as the impact of the inequalities of the sector on middle- and working-class people.
This raises the question: how is retail affected by late stage capitalism?
Late-Stage Retail
There are many indignities in retail, and some are too ridiculous to even be amusing anymore, though some are worse than others. I’m sure every reader has their own favorite example of absurdity, whether it's a $425 pair of jeans made to look muddy or an expensive internet-connected juicer.
Growing inequality is harder to laugh at. We are seeing a rise in luxury malls and brands alongside a spate of store closures that serve middle and working-class people. The vast economic divide also means one side gets to call the shots, while the other faces increasingly cruel situations.
Many of the businesses that have closed over the last few years, like Payless, Dress Barn, and others may benefit those who are calling for an end to boring retail, but those stores closings along with mall closings may have actually caused problems for families on a budget in areas without a lot of options.
But we also see encouraging trends; retail “heroes” who are seeking to serve bootstrapped communities, create and market sustainable products, pay their employees a living wage, and treat their suppliers ethically and fairly. Unlikely heroes like Dollar General, which announced it will open 975 new stores in rural areas as well as expand its produce sections in order to alleviate food deserts. They’re also the founders of numerous DTC brands who are focusing on sustainable and ethically produced products, B Corp-certified companies, and even the Business Roundtable, which recently redefined the purpose of a corporation in ways that speak directly to our Future Commerce values.
For us, the standout brands are those who aim higher than just creating a business that sells something: they foster the growth of communities, and they have a purpose that seeks to better the lives of people.
Can the collective efforts of our heroes reverse the “indignities, absurdities, and yawning equalities” of Late-Stage Retail? We certainly hope so, but we must recognize the inherent conflict they face: transforming retail so that it works diligently to serve all the communities that retail businesses are in. Wealth generation is the top priority of investors, but that doesn't mean that retail cannot provide what customers actually want.
Gilded Age 2.0
Amidst the non-stop talk about a retail apocalypse, there’s one sector whose star shines brightly: Luxury. According to Deloitte, the luxury market racks up $247 billion in sales, and enjoys 10.8% growth in year-over-year sales. Luxury apparel in particular is growing faster than any other sector, including technology, consumer goods, and the automotive and financial industries. Even personal fitness is going luxe -- brands like SoulCycle, Peloton, and (my personal favorite) Tracksmith.
New brand offerings are catering toward extreme ends of the marketplace, leaving a glut of customers in the middle class without options. Says Web Smith of 2PM:
Contrary to popular opinion, retail isn’t dying. Instead: changes in earnings, increased debt loads, and decreased consumption rates are beginning to polarize some consumers. The middle is being squeezed and retail failed to anticipate this socio-economic shift.
The middle, indeed, is shrinking. At the close of 2019, there were more “haves” in America than “have nots.” And while “lower class” has grown, the upper-income bracket is growing faster, and has been for the past 10 years, causing many retail brands to aim toward that growing market segment and away from middle-class offerings.
Working-class people in less densely populated areas are the ones who are experiencing the real retail downturn.
US retailers closed 9,300 stores in 2019. The collapse of Dress Barn, JCPenney, and Payless Shoes hit the lower middle class hard. Less-publicized closures from Walgreens, Family Dollar hit even harder.
In theory, Middle-class consumers still have plenty of access to retail. According to the Economic Innovation Group some 86.5 million people, many of whom are middle class, live in prosperous zip codes with lots of retail opportunities. Still, the stores that built their businesses around the middle class have shuttered at higher rates. In 2017, 16 companies accounted for almost 50% of all retail store closings -- virtually all of whom “built their businesses on the 20th century’s middle class suburban boom.”
Wow.
So how are things going for the middle classes? Just Google “things the middle class can’t afford anymore,” and you’ll see countless articles explaining why health care, college educations for their children, pets, gym memberships, vacations, new cars, even visits to the dentist are out of reach.
Data suggests that this link isn’t coincidental, and I believe as we head into uncertain financial times we will resort to more overt shifts of strategy to further abandon the middle class.
Unbridled capitalism isn’t tolerated; why is unbridled retail okay?
Unrestricted capitalism -- the unbridled drive to grow an economy and wealth for its investors at the expense of all other priorities -- is fundamentally scary. Fortunately, it’s more myth than reality. Numerous hallmark legislative acts -- Federal Food, Drug, and Cosmetic Act, Fair Debt Collection Practices Act, the Fair Credit Reporting Act, Truth in Lending Act, Fair Credit Billing Act, the Gramm–Leach–Bliley Act -- put restraints on capitalism. And in a wholly capitalistic world, there would be no bank or auto company bailouts, billion dollar subsidies to oil companies, or tax breaks that relieve some of the most profitable companies in America of a federal tax burden.
But retail is different: Congress has never mandated Publix or Kroger to open or remain in rural areas, nor has it forbidden Walmart to move across county lines in search of bigger and better tax incentives. The best local governments can do is cajole retailers into serving their communities with promises of multi-million (or in some cases billion) dollar tax incentives. Other than that, it’s pretty much laissez faire. That leaves retailers answering to their shareholders exclusively, which means major mall owners and retail brands focus where they will extract the best ROI: prosperous locations.
There’s another bit to this story. According to a Retail Dive analysis, more than 15% of brands acquired by private equity firms have filed for Chapter 11, including Toys R Us and Sports Authority. Leveraged buyouts saddle retailers with crippling debt, and many eventually shutter, although investors are richly rewarded. Such brands largely served the middle class.
What’s At Stake
At its core, retail is a division of labor: shoemakers make shoes, farmers grow food that grocers sell. Thanks to this division of labor, we are free to pursue occupations of our choice, knowing we can procure the necessary goods and services to sustain our families.
Its impact doesn’t end with confidence. Retail has direct effects on:
- Home Equity Value. Homes that are less than a mile from a retail center are worth up to 8% more than those further away. A local Walmart can increase home values by 2-3%, according to an economics research paper from the University of Chicago and Brigham Young University. And research conducted by Zillow in 2014 shows that homes near a Trader Joes and Whole Foods have a median value of $406,600 and $376,000 -- significantly above the national average of $229,000.
- Employment. Retail is a significant employer, supplying nearly 16 million people with jobs, per The Bureau of Labor Statistics. Store closures obviously lead to higher rates of unemployment, Since 2017, retail has shed 140,000 jobs.
The nation’s youth have faced the worst impact. The Labor Department reports that in 1990 there were three million retail jobs for people aged 16 to 19; today it’s closer to one million.
- Regional Economies. The impact of retail closures isn’t limited to affected store employees; closures have a ripple effect in the local economy, including cleaning services, security staff, attorneys and accountants. With less money in their pockets, regional consumers shop less, which means less sales tax for municipalities.
- Health. The Louisville Courier Journal has been studying the impact of grocery store closures in the region on the health and well being of local residents. The paper writes:
"Across Louisville, more than 120,000 people are living with food insecurity, meaning they don't have reliable access to healthy, affordable food. The issue is linked to higher rates of illness and lowered life expectancy in predominantly low-income neighborhoods."
One hopes that’s a rallying cry for grocery executives to follow Dollar General’s lead and service communities within food deserts.
Retail is Getting Cruel
A telltale sign of Late-Stage Retail is the rise of cruelty -- to customers, employees, suppliers, and even to nature. It’s difficult to overlook the atrocious ways customers are now treated. Retailers and tech companies vacuum up vast amounts of consumer data, unbeknownst to the individual customers, in order to prompt them to make purchases that they may not be able to afford.
Online retailers deploy a host of dark patterns -- creating a false sense of urgency -- to increase sales conversion and AOV, regardless of the impact on the end consumer.
Consider the egregious dark pattern, sneak into basket, a tactic in which a site “sneaks” additional items into a customer’s cart, which the customer must a) notice and b) actively delete.
All too often online retailers require the user to call or mail a request for cancellation or a full refund (as in, print out a form, fill it out, find an envelope, put a stamp on it, drop it off in the mailbox, and wait for the retailer to act). Wealthier buyers may not bother, which is probably why so many retailers deploy the tactic, as Princeton Research documented this past summer.
Shop Like It’s Your Job
As Brian pointed out in Insiders #009, consumption is part of our job, especially in our late-stage retail world. We need to buy lots of stuff, consume growing amounts of content, and purchase (and then over-share) unique experiences. If we don’t, the responsibility for a flailing economy rests solely on our shoulders. And on top of all that spending, we must get value out of everything we buy, and if we don’t, we’re not holding up our end of the bargain.
Even acts meant to aide consumers have created more friction than they have prevented, requiring numerous implicit-and-explicit “clickwrap” agreements that result in popup after popup an agreement (with no actual choice) to be tracked, to be monitored, and forcing the consumer to repeatedly dismiss various forms of attempts towards conversion.
Even acts meant to aide consumers have created more friction than they have prevented, requiring numerous implicit-and-explicit “clickwrap” agreements that result in popup after popup an agreement (with no actual choice) to be tracked, to be monitored, and forcing the consumer to repeatedly dismiss various forms of attempts towards conversion.
And so with Late-Stage Retail, consumption becomes constant work, a requirement, a mandate. Shopping, reading, watching, posting, listening, eating, vacationing, partying, decorating, former fun activities- all require more work. Just because something is entertaining or addictive doesn’t mean it’s restful.
The New Atlantis, a journal of technology and society, succinctly highlighted this dichotomy:
“Judging by how Americans spend their money — on shelter magazines and kitchen gadgets and home furnishings — domesticity appears in robust health. Judging by the way Americans actually live, however, domesticity is in precipitous decline. Families sit together for meals much less often than they once did, and many homes exist in a state of near-chaos as working parents try to balance child-rearing, chores, long commutes, and work responsibilities.”
And that’s Late-Stage Retail in a nutshell: consumers will buy ever-more-expensive goods they can’t afford now, on credit (or installment payments), and eventually, default under the crushing weight of debt while the economy slows, jobs become scarce, wages shrink. And whose fault is it? The consumer’s, of course.
We wondered aloud on Future Commerce in 2019 -- what would happen to disadvantaged consumers with older smartphones and prepaid data plans? If their access to goods and services dries up as one retailer after another goes belly-up, does that put them in a better or worse position as a consumer? Where will they go to shop? Will they shift to digital channels? Is Amazon the primary beneficiary of this channel-shift? Is that why Amazon introduced reduced-price Prime benefits for those on government assistance?
One can only wonder, then, what the future holds during a global epidemic when human interaction is limited and shoppers are forced to use eCommerce to conduct most of their purchases.
It’s time to recognize the responsibility we have in the retail community. If our “level of training,” as Archilocus describes it, is selling based purely on FOMO or social status, then what world are we creating? Are we treating people with dignity in the path to purchase?
I fear that our “level of training” is to prey upon base instincts and desires, to use trust-building language and offers to dismiss doubt that they’re making an ill-considered purchase, and then to make life difficult for them when they wish to “undo” the transaction.
We can, and should, do better.
What’s ahead
Over the next year, we will explore the many issues presented here. Specifically, we will explore:
- The state of retail today
- What we believe the industry should strive for
- The cost of failure
- How we can ensure our future
- The mindset and philosophy
Future Commerce makes no pretense about predicting the future; we seek only to identify and report on emerging trends so that retailers and founders can shape their future.
It’s more important now than ever before as we may be facing a troubled time for the global economy.
We also make no pretense about objectivity. We use the bullhorn of our podcast to put a spotlight on the brands and founders who are setting a good example, and we have no intention of curbing our enthusiasm for the things they set out to do. We see heroes at all levels of retail -- enterprise-class, mid-tier, start-up -- seeking to make meaningful changes to eradicate the absurdities, indignities and yawning inequalities of Late-Stage Retail, and we applaud their efforts.
Is Late-Stage Retail a thing? Yes. And we can do something about it.
“We don't rise to the level of our expectations, we fall to the level of our training.” - Archilocus
What in the world happened when the calendar ticked over to 2020? We ended 2019 on such a positive note - jobs reports were up, the economy booming. U.S. retailers, especially online retail, had a banner holiday in 2019.
And then 2020 happened. Suddenly we’re now in the midst of a global economic crisis under the threat of COVID-19 becoming a pandemic, this week saw the start of a global oil war, and DTC darlings are falling down left-and-right.
Maybe Archilocus was onto something - and I fear we’re not prepared for the road ahead. I fear that our level of training in eCommerce is, and has been for the better part of 10 years, to prey on basest of human emotions in order to elicit a sale from a customer.
This group of dark patterns and manipulative techniques disguised as best-practices are a trendline heading in the wrong direction, a phenomenon we’ve been calling Late-Stage Retail here at Future Commerce (a topic we've discussed at length in Episode 116, "Late-Stage Capitalism").
Three years ago, The Atlantic magazine wondered why suddenly everyone was talking about late capitalism, especially given its Marxist origins. The author, Annie Lowery, traced how the term came into existence (although Karl Marx himself didn’t coin it, his followers did), and how it has morphed over time. Ultimately, she explains:
“Late capitalism,” in its current usage, is a catch-all phrase for the indignities and absurdities of our contemporary economy, with its yawning inequality and super-powered corporations and shrinking middle class.”
This definition piqued our interest here at Future Commerce, because for a while now we’ve been looking at the indignities and absurdities of modern retailing, as well as the impact of the inequalities of the sector on middle- and working-class people.
This raises the question: how is retail affected by late stage capitalism?
Late-Stage Retail
There are many indignities in retail, and some are too ridiculous to even be amusing anymore, though some are worse than others. I’m sure every reader has their own favorite example of absurdity, whether it's a $425 pair of jeans made to look muddy or an expensive internet-connected juicer.
Growing inequality is harder to laugh at. We are seeing a rise in luxury malls and brands alongside a spate of store closures that serve middle and working-class people. The vast economic divide also means one side gets to call the shots, while the other faces increasingly cruel situations.
Many of the businesses that have closed over the last few years, like Payless, Dress Barn, and others may benefit those who are calling for an end to boring retail, but those stores closings along with mall closings may have actually caused problems for families on a budget in areas without a lot of options.
But we also see encouraging trends; retail “heroes” who are seeking to serve bootstrapped communities, create and market sustainable products, pay their employees a living wage, and treat their suppliers ethically and fairly. Unlikely heroes like Dollar General, which announced it will open 975 new stores in rural areas as well as expand its produce sections in order to alleviate food deserts. They’re also the founders of numerous DTC brands who are focusing on sustainable and ethically produced products, B Corp-certified companies, and even the Business Roundtable, which recently redefined the purpose of a corporation in ways that speak directly to our Future Commerce values.
For us, the standout brands are those who aim higher than just creating a business that sells something: they foster the growth of communities, and they have a purpose that seeks to better the lives of people.
Can the collective efforts of our heroes reverse the “indignities, absurdities, and yawning equalities” of Late-Stage Retail? We certainly hope so, but we must recognize the inherent conflict they face: transforming retail so that it works diligently to serve all the communities that retail businesses are in. Wealth generation is the top priority of investors, but that doesn't mean that retail cannot provide what customers actually want.
Gilded Age 2.0
Amidst the non-stop talk about a retail apocalypse, there’s one sector whose star shines brightly: Luxury. According to Deloitte, the luxury market racks up $247 billion in sales, and enjoys 10.8% growth in year-over-year sales. Luxury apparel in particular is growing faster than any other sector, including technology, consumer goods, and the automotive and financial industries. Even personal fitness is going luxe -- brands like SoulCycle, Peloton, and (my personal favorite) Tracksmith.
New brand offerings are catering toward extreme ends of the marketplace, leaving a glut of customers in the middle class without options. Says Web Smith of 2PM:
Contrary to popular opinion, retail isn’t dying. Instead: changes in earnings, increased debt loads, and decreased consumption rates are beginning to polarize some consumers. The middle is being squeezed and retail failed to anticipate this socio-economic shift.
The middle, indeed, is shrinking. At the close of 2019, there were more “haves” in America than “have nots.” And while “lower class” has grown, the upper-income bracket is growing faster, and has been for the past 10 years, causing many retail brands to aim toward that growing market segment and away from middle-class offerings.
Working-class people in less densely populated areas are the ones who are experiencing the real retail downturn.
US retailers closed 9,300 stores in 2019. The collapse of Dress Barn, JCPenney, and Payless Shoes hit the lower middle class hard. Less-publicized closures from Walgreens, Family Dollar hit even harder.
In theory, Middle-class consumers still have plenty of access to retail. According to the Economic Innovation Group some 86.5 million people, many of whom are middle class, live in prosperous zip codes with lots of retail opportunities. Still, the stores that built their businesses around the middle class have shuttered at higher rates. In 2017, 16 companies accounted for almost 50% of all retail store closings -- virtually all of whom “built their businesses on the 20th century’s middle class suburban boom.”
Wow.
So how are things going for the middle classes? Just Google “things the middle class can’t afford anymore,” and you’ll see countless articles explaining why health care, college educations for their children, pets, gym memberships, vacations, new cars, even visits to the dentist are out of reach.
Data suggests that this link isn’t coincidental, and I believe as we head into uncertain financial times we will resort to more overt shifts of strategy to further abandon the middle class.
Unbridled capitalism isn’t tolerated; why is unbridled retail okay?
Unrestricted capitalism -- the unbridled drive to grow an economy and wealth for its investors at the expense of all other priorities -- is fundamentally scary. Fortunately, it’s more myth than reality. Numerous hallmark legislative acts -- Federal Food, Drug, and Cosmetic Act, Fair Debt Collection Practices Act, the Fair Credit Reporting Act, Truth in Lending Act, Fair Credit Billing Act, the Gramm–Leach–Bliley Act -- put restraints on capitalism. And in a wholly capitalistic world, there would be no bank or auto company bailouts, billion dollar subsidies to oil companies, or tax breaks that relieve some of the most profitable companies in America of a federal tax burden.
But retail is different: Congress has never mandated Publix or Kroger to open or remain in rural areas, nor has it forbidden Walmart to move across county lines in search of bigger and better tax incentives. The best local governments can do is cajole retailers into serving their communities with promises of multi-million (or in some cases billion) dollar tax incentives. Other than that, it’s pretty much laissez faire. That leaves retailers answering to their shareholders exclusively, which means major mall owners and retail brands focus where they will extract the best ROI: prosperous locations.
There’s another bit to this story. According to a Retail Dive analysis, more than 15% of brands acquired by private equity firms have filed for Chapter 11, including Toys R Us and Sports Authority. Leveraged buyouts saddle retailers with crippling debt, and many eventually shutter, although investors are richly rewarded. Such brands largely served the middle class.
What’s At Stake
At its core, retail is a division of labor: shoemakers make shoes, farmers grow food that grocers sell. Thanks to this division of labor, we are free to pursue occupations of our choice, knowing we can procure the necessary goods and services to sustain our families.
Its impact doesn’t end with confidence. Retail has direct effects on:
- Home Equity Value. Homes that are less than a mile from a retail center are worth up to 8% more than those further away. A local Walmart can increase home values by 2-3%, according to an economics research paper from the University of Chicago and Brigham Young University. And research conducted by Zillow in 2014 shows that homes near a Trader Joes and Whole Foods have a median value of $406,600 and $376,000 -- significantly above the national average of $229,000.
- Employment. Retail is a significant employer, supplying nearly 16 million people with jobs, per The Bureau of Labor Statistics. Store closures obviously lead to higher rates of unemployment, Since 2017, retail has shed 140,000 jobs.
The nation’s youth have faced the worst impact. The Labor Department reports that in 1990 there were three million retail jobs for people aged 16 to 19; today it’s closer to one million.
- Regional Economies. The impact of retail closures isn’t limited to affected store employees; closures have a ripple effect in the local economy, including cleaning services, security staff, attorneys and accountants. With less money in their pockets, regional consumers shop less, which means less sales tax for municipalities.
- Health. The Louisville Courier Journal has been studying the impact of grocery store closures in the region on the health and well being of local residents. The paper writes:
"Across Louisville, more than 120,000 people are living with food insecurity, meaning they don't have reliable access to healthy, affordable food. The issue is linked to higher rates of illness and lowered life expectancy in predominantly low-income neighborhoods."
One hopes that’s a rallying cry for grocery executives to follow Dollar General’s lead and service communities within food deserts.
Retail is Getting Cruel
A telltale sign of Late-Stage Retail is the rise of cruelty -- to customers, employees, suppliers, and even to nature. It’s difficult to overlook the atrocious ways customers are now treated. Retailers and tech companies vacuum up vast amounts of consumer data, unbeknownst to the individual customers, in order to prompt them to make purchases that they may not be able to afford.
Online retailers deploy a host of dark patterns -- creating a false sense of urgency -- to increase sales conversion and AOV, regardless of the impact on the end consumer.
Consider the egregious dark pattern, sneak into basket, a tactic in which a site “sneaks” additional items into a customer’s cart, which the customer must a) notice and b) actively delete.
All too often online retailers require the user to call or mail a request for cancellation or a full refund (as in, print out a form, fill it out, find an envelope, put a stamp on it, drop it off in the mailbox, and wait for the retailer to act). Wealthier buyers may not bother, which is probably why so many retailers deploy the tactic, as Princeton Research documented this past summer.
Shop Like It’s Your Job
As Brian pointed out in Insiders #009, consumption is part of our job, especially in our late-stage retail world. We need to buy lots of stuff, consume growing amounts of content, and purchase (and then over-share) unique experiences. If we don’t, the responsibility for a flailing economy rests solely on our shoulders. And on top of all that spending, we must get value out of everything we buy, and if we don’t, we’re not holding up our end of the bargain.
Even acts meant to aide consumers have created more friction than they have prevented, requiring numerous implicit-and-explicit “clickwrap” agreements that result in popup after popup an agreement (with no actual choice) to be tracked, to be monitored, and forcing the consumer to repeatedly dismiss various forms of attempts towards conversion.
Even acts meant to aide consumers have created more friction than they have prevented, requiring numerous implicit-and-explicit “clickwrap” agreements that result in popup after popup an agreement (with no actual choice) to be tracked, to be monitored, and forcing the consumer to repeatedly dismiss various forms of attempts towards conversion.
And so with Late-Stage Retail, consumption becomes constant work, a requirement, a mandate. Shopping, reading, watching, posting, listening, eating, vacationing, partying, decorating, former fun activities- all require more work. Just because something is entertaining or addictive doesn’t mean it’s restful.
The New Atlantis, a journal of technology and society, succinctly highlighted this dichotomy:
“Judging by how Americans spend their money — on shelter magazines and kitchen gadgets and home furnishings — domesticity appears in robust health. Judging by the way Americans actually live, however, domesticity is in precipitous decline. Families sit together for meals much less often than they once did, and many homes exist in a state of near-chaos as working parents try to balance child-rearing, chores, long commutes, and work responsibilities.”
And that’s Late-Stage Retail in a nutshell: consumers will buy ever-more-expensive goods they can’t afford now, on credit (or installment payments), and eventually, default under the crushing weight of debt while the economy slows, jobs become scarce, wages shrink. And whose fault is it? The consumer’s, of course.
We wondered aloud on Future Commerce in 2019 -- what would happen to disadvantaged consumers with older smartphones and prepaid data plans? If their access to goods and services dries up as one retailer after another goes belly-up, does that put them in a better or worse position as a consumer? Where will they go to shop? Will they shift to digital channels? Is Amazon the primary beneficiary of this channel-shift? Is that why Amazon introduced reduced-price Prime benefits for those on government assistance?
One can only wonder, then, what the future holds during a global epidemic when human interaction is limited and shoppers are forced to use eCommerce to conduct most of their purchases.
It’s time to recognize the responsibility we have in the retail community. If our “level of training,” as Archilocus describes it, is selling based purely on FOMO or social status, then what world are we creating? Are we treating people with dignity in the path to purchase?
I fear that our “level of training” is to prey upon base instincts and desires, to use trust-building language and offers to dismiss doubt that they’re making an ill-considered purchase, and then to make life difficult for them when they wish to “undo” the transaction.
We can, and should, do better.
What’s ahead
Over the next year, we will explore the many issues presented here. Specifically, we will explore:
- The state of retail today
- What we believe the industry should strive for
- The cost of failure
- How we can ensure our future
- The mindset and philosophy
Future Commerce makes no pretense about predicting the future; we seek only to identify and report on emerging trends so that retailers and founders can shape their future.
It’s more important now than ever before as we may be facing a troubled time for the global economy.
We also make no pretense about objectivity. We use the bullhorn of our podcast to put a spotlight on the brands and founders who are setting a good example, and we have no intention of curbing our enthusiasm for the things they set out to do. We see heroes at all levels of retail -- enterprise-class, mid-tier, start-up -- seeking to make meaningful changes to eradicate the absurdities, indignities and yawning inequalities of Late-Stage Retail, and we applaud their efforts.
Is Late-Stage Retail a thing? Yes. And we can do something about it.
“We don't rise to the level of our expectations, we fall to the level of our training.” - Archilocus
What in the world happened when the calendar ticked over to 2020? We ended 2019 on such a positive note - jobs reports were up, the economy booming. U.S. retailers, especially online retail, had a banner holiday in 2019.
And then 2020 happened. Suddenly we’re now in the midst of a global economic crisis under the threat of COVID-19 becoming a pandemic, this week saw the start of a global oil war, and DTC darlings are falling down left-and-right.
Maybe Archilocus was onto something - and I fear we’re not prepared for the road ahead. I fear that our level of training in eCommerce is, and has been for the better part of 10 years, to prey on basest of human emotions in order to elicit a sale from a customer.
This group of dark patterns and manipulative techniques disguised as best-practices are a trendline heading in the wrong direction, a phenomenon we’ve been calling Late-Stage Retail here at Future Commerce (a topic we've discussed at length in Episode 116, "Late-Stage Capitalism").
Three years ago, The Atlantic magazine wondered why suddenly everyone was talking about late capitalism, especially given its Marxist origins. The author, Annie Lowery, traced how the term came into existence (although Karl Marx himself didn’t coin it, his followers did), and how it has morphed over time. Ultimately, she explains:
“Late capitalism,” in its current usage, is a catch-all phrase for the indignities and absurdities of our contemporary economy, with its yawning inequality and super-powered corporations and shrinking middle class.”
This definition piqued our interest here at Future Commerce, because for a while now we’ve been looking at the indignities and absurdities of modern retailing, as well as the impact of the inequalities of the sector on middle- and working-class people.
This raises the question: how is retail affected by late stage capitalism?
Late-Stage Retail
There are many indignities in retail, and some are too ridiculous to even be amusing anymore, though some are worse than others. I’m sure every reader has their own favorite example of absurdity, whether it's a $425 pair of jeans made to look muddy or an expensive internet-connected juicer.
Growing inequality is harder to laugh at. We are seeing a rise in luxury malls and brands alongside a spate of store closures that serve middle and working-class people. The vast economic divide also means one side gets to call the shots, while the other faces increasingly cruel situations.
Many of the businesses that have closed over the last few years, like Payless, Dress Barn, and others may benefit those who are calling for an end to boring retail, but those stores closings along with mall closings may have actually caused problems for families on a budget in areas without a lot of options.
But we also see encouraging trends; retail “heroes” who are seeking to serve bootstrapped communities, create and market sustainable products, pay their employees a living wage, and treat their suppliers ethically and fairly. Unlikely heroes like Dollar General, which announced it will open 975 new stores in rural areas as well as expand its produce sections in order to alleviate food deserts. They’re also the founders of numerous DTC brands who are focusing on sustainable and ethically produced products, B Corp-certified companies, and even the Business Roundtable, which recently redefined the purpose of a corporation in ways that speak directly to our Future Commerce values.
For us, the standout brands are those who aim higher than just creating a business that sells something: they foster the growth of communities, and they have a purpose that seeks to better the lives of people.
Can the collective efforts of our heroes reverse the “indignities, absurdities, and yawning equalities” of Late-Stage Retail? We certainly hope so, but we must recognize the inherent conflict they face: transforming retail so that it works diligently to serve all the communities that retail businesses are in. Wealth generation is the top priority of investors, but that doesn't mean that retail cannot provide what customers actually want.
Gilded Age 2.0
Amidst the non-stop talk about a retail apocalypse, there’s one sector whose star shines brightly: Luxury. According to Deloitte, the luxury market racks up $247 billion in sales, and enjoys 10.8% growth in year-over-year sales. Luxury apparel in particular is growing faster than any other sector, including technology, consumer goods, and the automotive and financial industries. Even personal fitness is going luxe -- brands like SoulCycle, Peloton, and (my personal favorite) Tracksmith.
New brand offerings are catering toward extreme ends of the marketplace, leaving a glut of customers in the middle class without options. Says Web Smith of 2PM:
Contrary to popular opinion, retail isn’t dying. Instead: changes in earnings, increased debt loads, and decreased consumption rates are beginning to polarize some consumers. The middle is being squeezed and retail failed to anticipate this socio-economic shift.
The middle, indeed, is shrinking. At the close of 2019, there were more “haves” in America than “have nots.” And while “lower class” has grown, the upper-income bracket is growing faster, and has been for the past 10 years, causing many retail brands to aim toward that growing market segment and away from middle-class offerings.
Working-class people in less densely populated areas are the ones who are experiencing the real retail downturn.
US retailers closed 9,300 stores in 2019. The collapse of Dress Barn, JCPenney, and Payless Shoes hit the lower middle class hard. Less-publicized closures from Walgreens, Family Dollar hit even harder.
In theory, Middle-class consumers still have plenty of access to retail. According to the Economic Innovation Group some 86.5 million people, many of whom are middle class, live in prosperous zip codes with lots of retail opportunities. Still, the stores that built their businesses around the middle class have shuttered at higher rates. In 2017, 16 companies accounted for almost 50% of all retail store closings -- virtually all of whom “built their businesses on the 20th century’s middle class suburban boom.”
Wow.
So how are things going for the middle classes? Just Google “things the middle class can’t afford anymore,” and you’ll see countless articles explaining why health care, college educations for their children, pets, gym memberships, vacations, new cars, even visits to the dentist are out of reach.
Data suggests that this link isn’t coincidental, and I believe as we head into uncertain financial times we will resort to more overt shifts of strategy to further abandon the middle class.
Unbridled capitalism isn’t tolerated; why is unbridled retail okay?
Unrestricted capitalism -- the unbridled drive to grow an economy and wealth for its investors at the expense of all other priorities -- is fundamentally scary. Fortunately, it’s more myth than reality. Numerous hallmark legislative acts -- Federal Food, Drug, and Cosmetic Act, Fair Debt Collection Practices Act, the Fair Credit Reporting Act, Truth in Lending Act, Fair Credit Billing Act, the Gramm–Leach–Bliley Act -- put restraints on capitalism. And in a wholly capitalistic world, there would be no bank or auto company bailouts, billion dollar subsidies to oil companies, or tax breaks that relieve some of the most profitable companies in America of a federal tax burden.
But retail is different: Congress has never mandated Publix or Kroger to open or remain in rural areas, nor has it forbidden Walmart to move across county lines in search of bigger and better tax incentives. The best local governments can do is cajole retailers into serving their communities with promises of multi-million (or in some cases billion) dollar tax incentives. Other than that, it’s pretty much laissez faire. That leaves retailers answering to their shareholders exclusively, which means major mall owners and retail brands focus where they will extract the best ROI: prosperous locations.
There’s another bit to this story. According to a Retail Dive analysis, more than 15% of brands acquired by private equity firms have filed for Chapter 11, including Toys R Us and Sports Authority. Leveraged buyouts saddle retailers with crippling debt, and many eventually shutter, although investors are richly rewarded. Such brands largely served the middle class.
What’s At Stake
At its core, retail is a division of labor: shoemakers make shoes, farmers grow food that grocers sell. Thanks to this division of labor, we are free to pursue occupations of our choice, knowing we can procure the necessary goods and services to sustain our families.
Its impact doesn’t end with confidence. Retail has direct effects on:
- Home Equity Value. Homes that are less than a mile from a retail center are worth up to 8% more than those further away. A local Walmart can increase home values by 2-3%, according to an economics research paper from the University of Chicago and Brigham Young University. And research conducted by Zillow in 2014 shows that homes near a Trader Joes and Whole Foods have a median value of $406,600 and $376,000 -- significantly above the national average of $229,000.
- Employment. Retail is a significant employer, supplying nearly 16 million people with jobs, per The Bureau of Labor Statistics. Store closures obviously lead to higher rates of unemployment, Since 2017, retail has shed 140,000 jobs.
The nation’s youth have faced the worst impact. The Labor Department reports that in 1990 there were three million retail jobs for people aged 16 to 19; today it’s closer to one million.
- Regional Economies. The impact of retail closures isn’t limited to affected store employees; closures have a ripple effect in the local economy, including cleaning services, security staff, attorneys and accountants. With less money in their pockets, regional consumers shop less, which means less sales tax for municipalities.
- Health. The Louisville Courier Journal has been studying the impact of grocery store closures in the region on the health and well being of local residents. The paper writes:
"Across Louisville, more than 120,000 people are living with food insecurity, meaning they don't have reliable access to healthy, affordable food. The issue is linked to higher rates of illness and lowered life expectancy in predominantly low-income neighborhoods."
One hopes that’s a rallying cry for grocery executives to follow Dollar General’s lead and service communities within food deserts.
Retail is Getting Cruel
A telltale sign of Late-Stage Retail is the rise of cruelty -- to customers, employees, suppliers, and even to nature. It’s difficult to overlook the atrocious ways customers are now treated. Retailers and tech companies vacuum up vast amounts of consumer data, unbeknownst to the individual customers, in order to prompt them to make purchases that they may not be able to afford.
Online retailers deploy a host of dark patterns -- creating a false sense of urgency -- to increase sales conversion and AOV, regardless of the impact on the end consumer.
Consider the egregious dark pattern, sneak into basket, a tactic in which a site “sneaks” additional items into a customer’s cart, which the customer must a) notice and b) actively delete.
All too often online retailers require the user to call or mail a request for cancellation or a full refund (as in, print out a form, fill it out, find an envelope, put a stamp on it, drop it off in the mailbox, and wait for the retailer to act). Wealthier buyers may not bother, which is probably why so many retailers deploy the tactic, as Princeton Research documented this past summer.
Shop Like It’s Your Job
As Brian pointed out in Insiders #009, consumption is part of our job, especially in our late-stage retail world. We need to buy lots of stuff, consume growing amounts of content, and purchase (and then over-share) unique experiences. If we don’t, the responsibility for a flailing economy rests solely on our shoulders. And on top of all that spending, we must get value out of everything we buy, and if we don’t, we’re not holding up our end of the bargain.
Even acts meant to aide consumers have created more friction than they have prevented, requiring numerous implicit-and-explicit “clickwrap” agreements that result in popup after popup an agreement (with no actual choice) to be tracked, to be monitored, and forcing the consumer to repeatedly dismiss various forms of attempts towards conversion.
Even acts meant to aide consumers have created more friction than they have prevented, requiring numerous implicit-and-explicit “clickwrap” agreements that result in popup after popup an agreement (with no actual choice) to be tracked, to be monitored, and forcing the consumer to repeatedly dismiss various forms of attempts towards conversion.
And so with Late-Stage Retail, consumption becomes constant work, a requirement, a mandate. Shopping, reading, watching, posting, listening, eating, vacationing, partying, decorating, former fun activities- all require more work. Just because something is entertaining or addictive doesn’t mean it’s restful.
The New Atlantis, a journal of technology and society, succinctly highlighted this dichotomy:
“Judging by how Americans spend their money — on shelter magazines and kitchen gadgets and home furnishings — domesticity appears in robust health. Judging by the way Americans actually live, however, domesticity is in precipitous decline. Families sit together for meals much less often than they once did, and many homes exist in a state of near-chaos as working parents try to balance child-rearing, chores, long commutes, and work responsibilities.”
And that’s Late-Stage Retail in a nutshell: consumers will buy ever-more-expensive goods they can’t afford now, on credit (or installment payments), and eventually, default under the crushing weight of debt while the economy slows, jobs become scarce, wages shrink. And whose fault is it? The consumer’s, of course.
We wondered aloud on Future Commerce in 2019 -- what would happen to disadvantaged consumers with older smartphones and prepaid data plans? If their access to goods and services dries up as one retailer after another goes belly-up, does that put them in a better or worse position as a consumer? Where will they go to shop? Will they shift to digital channels? Is Amazon the primary beneficiary of this channel-shift? Is that why Amazon introduced reduced-price Prime benefits for those on government assistance?
One can only wonder, then, what the future holds during a global epidemic when human interaction is limited and shoppers are forced to use eCommerce to conduct most of their purchases.
It’s time to recognize the responsibility we have in the retail community. If our “level of training,” as Archilocus describes it, is selling based purely on FOMO or social status, then what world are we creating? Are we treating people with dignity in the path to purchase?
I fear that our “level of training” is to prey upon base instincts and desires, to use trust-building language and offers to dismiss doubt that they’re making an ill-considered purchase, and then to make life difficult for them when they wish to “undo” the transaction.
We can, and should, do better.
What’s ahead
Over the next year, we will explore the many issues presented here. Specifically, we will explore:
- The state of retail today
- What we believe the industry should strive for
- The cost of failure
- How we can ensure our future
- The mindset and philosophy
Future Commerce makes no pretense about predicting the future; we seek only to identify and report on emerging trends so that retailers and founders can shape their future.
It’s more important now than ever before as we may be facing a troubled time for the global economy.
We also make no pretense about objectivity. We use the bullhorn of our podcast to put a spotlight on the brands and founders who are setting a good example, and we have no intention of curbing our enthusiasm for the things they set out to do. We see heroes at all levels of retail -- enterprise-class, mid-tier, start-up -- seeking to make meaningful changes to eradicate the absurdities, indignities and yawning inequalities of Late-Stage Retail, and we applaud their efforts.
Is Late-Stage Retail a thing? Yes. And we can do something about it.
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