Last week’s decision by Borders’ executives to liquidate the media retailer got me thinking. The fact that no one stepped forward to bid on the company didn’t surprise me. Anyone who’d been to our local store wouldn’t have wanted it. The customer service desk was rarely manned, and recently, they’d put the computers on the counter so that customers could just look things up themselves. Thanks, but I can do that at home with Amazon.com. A couple of years ago, I started patronizing a local new/used bookstore, and I’m quite happy with the folks there.
I would still occasionally go to Borders because they had a large selection of DVDs, but they kept them in locked cases, spine outward. You couldn’t browse them, or even see the price. You had to find what you wanted, and then find someone to unlock the case for you. More often than not, the prices were higher than you would pay online. Bad customer service is never a sustainable business model, and that in conjunction with online competition rang Borders’ death knell.
But I started pondering what’s next. Here in the Silicon Valley, Borders represented an anchor for several shopping areas, large and small. What goes in that space? Not movie theaters – those are long gone. I’m beginning to wonder about what happens to our commercial retail infrastructure when the number of brick-and-mortar stores begins to constrict.
It is as if someone invented a transporter device similar to the one on Star Trek. Overnight, the transportation industry would be transformed, but even more disconcerting, we’d have to figure out what to do with all that asphalt previously devoted to wheeled vehicles. (Hopefully, we’d keep some of it for walking and cycling, so we don’t end up like the inhabitants of another sci-fi tale, namely Wall-E.)
There’s another trend here that’s chipping away at our retail infrastructure, and it’s also related to technology. Big retailers benefit from economies of scale. It’s not just the question of being able to buy in volume that’s helped them get rid of small drug stores, hardware stores, grocery stores, fill in the blank. It’s also the ability to install expensive technology that lets them track what people buy and when, and set up cost-effective distribution systems that make big retailers bigger. But the chain reaction doesn’t stop there.
Look at retail drug stores. Just a few years ago, here in northern California, we could choose from Payless, Long’s, and Walgreen’s. Now it’s Walgreen’s, CVS, and Rite-Aid. And those retailers don’t necessarily need drug stores in every strip mall, especially here in the suburbs. When those close, that creates more empty retail space.
Retail stores won’t go away, because we like to see and hold certain things before we buy them. But there will be fewer of them. What will happen to all those shopping and strip malls? I’m not investing in commercial real estate anytime soon, I’ll tell you that. And what will happen to the jobs those places represent?
As a Boomer, I’ve lived with nothing but the paradigm of growth for my entire life. Where is technology sending that growth? Into rural areas, where distribution centers can overrun land that’s been unused for far longer? Will there still be growth, but just not as visible as before? Is it just time, as others smarter than me have suggested, to buy stock in UPS and Fedex? Or have we finally reached a point where the growth and consumerism we’ve grown used to is no longer sustainable?
Part of me – the idealistic optimist – is confident we’ll figure out how to transform the people and places we no longer need. We’re pretty good at that. But the cranky part of me worries that we’re going to have a long, grim stretch – unlike one we’ve ever seen – before it’s all sorted out.