Retail’s Evolution

Here’s an interesting story by Eric Torbenson from the New York Post:  “The monster that ate the recovery–Why the rise of Internet shopping could destroy jobs and the economy.”  [It’s alternate subheadline is “could filling your iPod destroy the economic recovery?”] The premise is “online sales mean fewer employees and fewer physical storefronts.  That means falling salaries and rents, decreased construction, lower payroll taxes[, and lower] sales taxes.”  Internet sales are projected to grow faster than brick-and-mortar sales, taking a toll on retail employment, those sectors of the economy that feed on retail employment, and governments that rely on sales tax revenue.  The evolution towards online sales may be inevitable, but the recession’s quickening of its pace amplifies the resultant economic dislocation.

4 Replies to “Retail’s Evolution”

  1. christellekaram

    i liked Severgnini's traditonal, old-school descriptions of the pleasures of shopping. i remember my father telling me multiple stories about the smells he would smell in the high-end stores on Champs Elysee when shopping for my mother about 45 years ago. But nowadays, and mostly in America, i realized that this "pleasure of shopping" doesn't lie in the process and activity of doing it, it lies in the event of getting "what you wanted". Technology today permits us to "get what we want" in a much faster, less time consuming, and easier manner – online shopping. the access to stores online has become at our fingertips, through websites and iphone applications. so the mentality here is, why go through the extra hassle since i end up with the same outcome. I do believe that the online shopping market is going to excel, and dominate the retail environment, it will also be a glimpse into a "virtual world". I come from the middle east, and this accessibility and technology of online shopping isn't very popular, but when in America, i do enjoy it and do it very often.

  2. Vidhi Kumar

    Online shopping should not affect sales tax revenue. We still have to pay taxes on our online purchases although there are more ways of avoiding the tax, such as "promo codes."
    Even though online shopping offers a great opportunity for people who just can't create the time to go to the store and make their purchase, it also has many drawbacks. It takes away from the social activity aspect of shopping and there are more chances of there being something wrong with your purchase. I know many people who shop for clothes and shoes online but I can't see myself ever buying clothes or shoes without trying them on first.
    Online shopping can be convenient for some people but there are some products for which it would not make sense to order them online and there are still people who enjoy the shopping experience. I do not think that online shopping is going to be used so much as to affect our salaries and employment rate.

    • drandall Post author

      A promo code would not avoid a sales or use tax that is owed on a purchase; it may reduce the amount of the tax by reducing the purchase price. Many would agree with your statement about online retail taking away the social aspect of shopping. Recently I read La Bella Figura: A Field Guide to the Italian Mind by Italian author Beppe Severgnini, who says that Italians will never embrace online shopping because it lacks the smells, touches, tastes, visuals, and sounds, the sensual elements, of physical shopping.

  3. Tom Ivancic

    It seems to me, the pace of online shopping is under-reported and it's resultant growth also under-predicted. Yet at the same time I find myself hard pressed to find a reason to go to a brick and mortar store anymore. At the beginning of the semester I found some cheap (old) DVD's at Best Buy ($7-$10) and bought a few thinking I had gotten a good deal.
    However, recently I went to a discount DVD site ( and found that the same movies were on that site for less than $1 and listed as 'brand new' or 'like new'. Even with the $2.99 shipping, it's still half as much (hence the name, I believe). I honestly felt silly for having gone to best buy at all. It's becoming too expensive to pay for a building, employees and upkeep when its much easier to have a warehouse, list details online and ship products.
    It may be to our, and the economies, detriment in the end but if I can save half on a $10 DVD, I can't even imagine how much it'd worth to save on a larger purchase. I would also argue that in the end this streamlining of purchasing is both inevitable and beneficial. I believe history shows that most who firmly resist change are soon crushed by it and in this case the streamlining of shopping may save time and money for the consumer while pushing capital to its highest and best use for businesses.
    Torbensen does a great job bringing up many of these numerous and widespread issues but only time will illuminate the true results of online shopping.

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