You can be forgiven for missing the news a few weeks ago. In these extraordinary times, news headlines can scarcely keep pace with the next scandal, disaster, or public misstep.
But several weeks ago, a small headline, easily overlooked, easy to dismiss, offered an important look at a massive shift in world economics.
On January 23, Papyrus, a maker of upscale greeting cards, filed for bankruptcy. They closed all 254 of their retail stores. One thousand workers lost their jobs.
In their bankruptcy filing, they offered a laundry list of reasons for the failure of their stores, including increased employee costs, increased rents, declining sales, and an inability to rebound from the 2008 recession. A closer examination might also note that selling $15.00 birthday cards is an easy thing for consumers to stop spending money on when they are struggling with increasing prices for shelter and insurance.
The specifics of the Papyrus business model aren’t really an economic indicator. That they are closing brick and mortar stores is, and it is a further indication that the world of retail continues to decline.
A week later, Bose, which makes high end speakers and headphones, said it would close 100 stores. And it’s just February. 2019 was a bad year for brick and mortar retail. More than 9,300 stores closed. Papyrus and Bose indicate that 2020 will be just as bad.
The loss can be measured in dollars and jobs, but, to me, it’s a greater cultural loss. Brick and mortar shopping requires that we meet and conduct business with our fellow men and women. It is an ancient standard of business, requiring courtesy, the exchange of knowledge, consideration and opinion. It calls for us to converse, make small talk. If we shop at the same stores, such as a grocery store or a favorite shoe store, we might, actually, get to know the clerks, share stories with them, perhaps lift their spirits, or have them lift ours.
As retail moves more and more online, we’ve lost the need to make human connections. It’s true that e-commerce presents many benefits. But it also creates a great drain on resources. All those boxes and trucks aren’t making the world a better place. And there is also an economic consequence since the clerk in the store no doubt makes more than the person stuffing that box with your new bathrobe or cat toy.
Also, we hate e-commerce. A recent story in the Seattle Times revealed that, in 2019, e-commerce surpassed telecom, cable companies, and car dealers as the most complained about industry in Washington State. That’s right. We think e-commerce companies are worse than cable providers. This was according to the attorney general’s complaint department.
But any reader of Amazon reviews or the reviews of other e-commerce sites, there is an alarming level of rage. Frankly, I doubt few people realized there were so many ways to say, “go to hell.”
Now, brick and mortar retail is subject to disgruntled customers. In any transaction, there is a possibility for error. But face to face transactions represent a much harder opportunity in which to vent. In fact, it provides instead an educational opportunity in the art of negotiations. Sure, there has been rage in the retail store industry, but it is an outlier because peer pressure, the risk of looking a fool, tempers temperament. They call it common courtesy because it is something we share, or, at least try to share.
Other great attributes have been lost in the change from the store to the electronic shopping cart. Humans gain experience beyond preference; which e-commerce leans heavily on. A shoe salesman learns much about fitting shoes. There is an art to it because not all shoes are made the same or, frankly, fit the same. A knowledgeable shoe salesman is worth their weight in gold, because they are attuned to human dimensions and expectations.
Nike recently learned that not having in person sales staff is a big problem. How big? In May of 2019, the company flat out said their customers can’t find the right fitting shoes. They addressed that fact that many of their customers complain about shoes that don’t fit or have bad fitting, unused shoes lying around their domiciles. Anyone who has ever purchased a shoe knows that one company’s 8 ½ isn’t that same as some other company’s 8 ½.
Nike is attempting to solve their fit problems with technology, launching a smart phone app called, with trademark savvy and wit, FIT. It uses the camera’s phone to size a customer’s foot size. Whether it works will be revealed over time. My bet is a long time.
Nike has a few other problems which I suspect, and in some cases absolutely know, other e-commerce companies face. Free shipping and free returns have reduced barriers and increased adoption. And companies are attempting to increase delivery speeds, shortening the time between order and possession. But the speed has problems. Wrong product is shipped in ever increasing cases. Nike has bypassed this problem in many cases by shipping new product without waiting for or asking the customer to return the wrong merchandise.
This creates an odd problem. I recently ordered a pair of Nike shoes. I was delivered a pair that was four sizes too small. When I contacted Nike, through a chat bot, a new pair was shipped. I asked, “what do you want me to do with the other pair?” I was told, “Oh, just keep it or donate it.” Nike was telling me that the product I had, the one I had paid for and received, was worthless.
For all our loathing, e-commerce isn’t going away. Too much has been invested in it to allow it to fail. As Julius Caesar said when he led an army across the Rubicon river, “the die is cast.” He knew his provocation was irreversible. He understood there was no going back.
For non-history aficionados, spoiler alert, it didn’t turn out well for him.
In many ways, we have an abusive relationship with e-commerce. But we can’t quit it. We can punish ourselves for doing it. We can send ourselves to be bed without supper. But like the old saying goes, we’ll be down for breakfast in the morning. The die is indeed cast.