A recent Washington Post article announced that Discovery Communications, owner of the Discovery Channel and more than 100 other television networks, is planning to close its 103 Discovery Channel retail stores. They are taking all of their merchandising efforts solely online and estimate a savings of some $75 million dollars per year from this shift in their game plan.
This tale is one that keeps cropping up in the big and small business arenas. The global reach of the Internet and the release from the costly overhead of paying staff, renting facilities and providing them with heat, light and water is a combo that is drawing business owners out of their brick-and-mortar shops and into the virtual world.
What does this mean for civilization? What are the bright and dark sides of this alteration in the way we do business? Here are a few potential outcomes to consider.
On the plus side:
1) Less traffic - if delivery vehicles become the main lords of the highways because everyone else is sitting at home waiting for their goods to be delivered, a reduction in gridlock and a potential improvement of air quality could be resultant.
2) More options - if everyone gets used to shopping online for most of their non-perishable goods, the marketplace becomes huge with many more options than your local downtown could ever provide.
3) Lower prices - both the intense competition of the Internet marketplace (your store against the millions) and the reduced overhead of operating costs ought to pass lower prices on down to the consumer.
4) Potential for better service - in the current economy, a major percentage of retail stores are staffed by indifferent, low-wage employees because this is all the owner can manage to afford. Taking things online means that policies and quality of service can be automated directly by the owner, at all times, as part of the business model. This automation can attempt to reproduce the effect of the quickest, smartest, most consistent service a consumer could wish for, 24 hours a day. (I’m saying it could to this…not that it will.)
5) More flexibility for working techies - telecommuting can become the norm rather than the exception. No more going to the office, filling out your time sheet, sitting through meetings. Email and telephone become the vehicles of getting work done, and hours become set by deadlines you have to meet rather than 8-5 cubicle squatting. The families of tech workers benefit hugely. Both mom and dad stay at home and take care of the kids…no more farming them out to daycare. This, in particular, could have far-reaching consequences for American civilization and produce a completely different kind of human being than we are currently doing, according to modern psychology.
On the minus side:
1) Unemployment - let’s not kid ourselves. My above picture of the happy American techie family is an ideal one. If big business like Discovery Communications is sacking all of their retail employees to cut costs, don’t think for a moment that they won’t further cut costs by outsourcing their tech work to the lowest bidder who lives elsewhere in the world and doesn’t have to pay $1500.00/month to rent the 2 bedroom house you live in in California. And, if Mom and Pop’s 5 and 10 fires all of their employees so that they can take business online, there are no longer local job opportunities for people in your community.
2) What Community? - Traditionally, for the past 200 years or so in the western world, communities have existed around a town center where people bought and sold goods. Houses were then built up around this center of local commerce for the sake of convenience and for the benefits of community life. Shopping is a big part of civilization, but what will the landscape of the town square look like if all the shops are gone? I guess we’ll still need gas stations, but if even the grocery store starts taking your orders online and delivers your lettuce fresh to your door that same day, say goodbye to hanging out in the shopping district, meeting your neighbors there and getting to know local merchants. Say hello to a land of endless subdivisions with no town centers at all…just urban sprawl. Well…I guess restaurants could still be someplace to go in such a world.
3) 0 Accountability - Anyone who has spent time in the social spaces of the Internet will have noticed how horribly certain kinds of people behave because of the anonymity inherent to the on-line world. People say the most rotten things, safe in the idea that their facelessness is an opaque screen of protection…no one will ever know who the ‘trolls’ are and this appears to fuel their activities of spamming and slamming. In the business world, scamming is rife for much the same reason. It’s incredibly easy to set up what looks like a real business on the web. All you need is a shiny website. Over the past decade, people have come to place way too much trust in the validity of what they find on-line. Thus, scammers can set up a sham business, quickly rob unwitting consumers and then vanish into the black depths of cyberspace. It’s a lot harder to do this when you have to hire a moving van to come load up all your stock from your brick-and-mortar store before you flee your local town. The U.S. has yet to come up with a lot of the legal standards it needs to govern fraudulent or libelous activity on the web. It’s a playground for the criminal-minded.
4) Different Humans - I’m putting this on the minus side because change is always something to be grappled with and can cause reasonable feelings of fear. Imagine a world in which, let’s say, 70% of life’s activities took place on-line. In the short term, the sunrise-sunset schedule of mankind might change in a way that is even more revolutionary than what happened when humans discovered fire, or discovered electricity. I know I do most of my own on-line shopping around midnight. In my town, the only thing that is open at midnight is 7-11’s convenience store. If I could attend to most of my needs late at night, perhaps I’d sleep all day long and be alert in the dark. Perhaps all of my neighbors would, too. Electricity bills might get pretty scary in this situation with homes across the land needing to be lit for all of those night-time hours. In the long term, humans might undergo physical changes because of a life spent in front of a computer. The function, and even the shape, of our eyes might change over thousands of years of an Internet-based world. Human social relations, grooming habits, patterns of thought could all be altered over time because of these kinds of changes.
5) Mom & Pop Vanish - While the web certainly does provide opportunities for the small business, I think it likely that the greatest advantage of taking all operations on-line is going to belong mainly to large companies that manufacture things. Take, for example, the small local shop that sells home and garden items. They are the ONLY game in town for buying planter boxes, wall clocks, deck chairs, picture frames. Mom & Pop are in for a rude surprise if they think this will hold true in the Internet Marketplace. Suddenly, they discover that the Google index contains 16 million entries for ‘picture frames’. Mom & Pop are going to find it next to impossible to compete with that. They aren’t manufacturers. They are simply retailers. And there is nothing to stop their potential customers from going right to the source on-line and buying all these same products for less money. The competition and opportunities are really going to depend on the type of small business, but I would caution any B&M store owner to do their research thoroughly before closing their local doors.
For the most part, I’m talking in extremes here. Good and bad will result from this rising trend of commerce evolving into e-commerce, and the repercussions will scale to the extent that this move to the web takes place. SEOs and Internet marketers know how big a role money plays in even the organic SERPs, whether that money is spent paying a pro to linkbait, to write copy, to buy links, to seek free links, to participate in SM sites or whatever is being done on an hourly basis at an hourly rate. PPC and other types of advertising are all about money, too, obviously. So, in the end, we remain with the same structure of big business having all of the big advantages and the little guy may not be doing the smartest thing if he contributes to the end of creating and supporting a local shopping economy.
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