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The Second-Oldest Profession – The Metail Economy

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“Excerpt from The Metail Economy: 6 Strategies for Transforming Your Business to Thrive in the Me-Centric Consumer Revolution by Joel Bines, pp. 10-12 (McGraw Hill, January 2022).”

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The Second-Oldest Profession

Despite the shift that has taken place, the consumer’s never-ending desire to consume remains as strong as ever. Even during the pandemic and related social and economic crises, retail sales in the United States rose 6.9 percent to $4.04 trillion from $3.78 trillion the year before, according to an analysis of the latest US Department of Commerce figures. So hardly a death knell for retail.

Yet the vast majority of this growth has gone to the few companies that understand the changing consumer. To an extent, the headline growth number is masking the challenges of tens of thousands of consumer-facing companies.

Retail survived a global pandemic and will continue to survive unless some other apocalyptic event forces the entire global population to live off the grid, with people growing their own vegetables and hunting rabbits for stew. Even then, we’d need to barter with someone for seeds and perhaps a stock pot, and the cycle would continue. Selling goods and services has been in a constant state of renewal since the earliest days of commerce. Yes, artisans were disrupted by merchants, who were disrupted by bazaars and spice- route traders. True, pushcarts disrupted stand-alone stores. Sure, the Sears Roebuck catalog of 1893 disrupted the first era of brick- and-mortar retail. Absolutely, malls disrupted the town square; superstores and category killers disrupted the local five-and-dime. And Amazon, the great disrupter, has disrupted, well, almost every consumer-facing business (or will soon). But each time one of these iterations of retail becomes obsolete, another takes its place. There really is no imaginable scenario where humans won’t be making some form of transaction to fulfill a want, a need, or a desire.

Which is why, when the business page headlines lament yet another store closure, with dire forecasts about the end of retail, it makes my eyes roll. Of course, you could be forgiven for thinking major sectors of the industry are in their final death throes. The average person reading the news might naturally come to the mistaken conclusion that there will be no more brick-and-mortar stores in the very near future. And if you happen to work in a consumer-facing company that is struggling, what is happening now must feel apocalyptic. Thousands of physical stores shuttered as people sheltered in place during the COVID-19 pandemic, with more than 12,000 retail stores closing in the United States alone, not to mention all the restaurants, gyms, and other consumer- oriented locations. Meanwhile, e-commerce made up almost 16 percent of retail sales in the United States by the end of 2020—a substantial jump from ~11 percent in 2019.

So yes, there has been pain. Other than groceries, toilet paper, and PPE equipment, people didn’t buy a whole lot in the first few months of the pandemic. It’s not like you needed to purchase a new wardrobe to sit on your sofa and binge-watch Tiger King. Several fast-fashion retail chains filed for bankruptcy, as well as mid-market and high-end department stores, gourmet food companies, restaurants, bakeries, and brands.

Even before the onset of the global pandemic, one major news outlet even forecast “The Death of Clothing.” But again, we should be careful of the headlines about retail’s demise. As an operator and consultant who has devoted his working life to the consumer economy, I am especially pained by these headlines because they suggest old-line companies might as well throw up their hands rather than find creative solutions. Adding to the confusion, much of what is written today about struggling consumer businesses attributes the struggle to the rise of e-commerce, but that misses the point.