"You can observe a lot just by watching." - Yogi Berra
I've always said that the Business section is the most interesting section of the newspaper. Following the stock market gives one an insight into what Americans are thinking, doing, and spending their money on. Lately, the trends have been interesting.
About a year ago, the casual dining industry began to struggle. Stalwarts like McDonald's, Wendy's, Starbucks, Brinker, and YUM Brands struggled to draw customers to their restaurants. Something was influencing people to stay at home and prepare food rather than spend money for the dining-out experience. Generally, dining out is coupled with some other entertainment, be it a movie, show, or something to draw people out of their home and stop for food on the way out or the way home. That ain't happening.
Tonight, Netflix reported a stellar quarter, beating estimates on subscriber growth and their own high-quality content. Some of it is international expansion, but you can't deny that the "Netflix and Chill" economy is in high gear. We have plush home theater systems, in-home WiFi, and options for food delivery that take business away from movie theaters and restaurants. There are at least a half dozen small companies that will deliver fresh ingredients to your door so that you can prepare meals in your home that cost less than dining out. Couple that with the Netflix experience, and you have the "Dinner and a Movie" date at home instead of on the town.
Amazon and Ebay have teamed-up to bring the death blow to brick-and-mortar retail as companies like Target, Macy's, JC Penny's, Kohls, K-Mart, Sears - you name one - have struggled and are closing stores in the face of the ease and luxury of point-and-click shopping online. Target's earnings were bolstered by online shopping which, ironically, is killing their stores. You can't impulse-buy online. You get what you want, and go. Shoppers just want to get what they want and move along. Combined with the Amazon Prime experience, and a shopper need only wait a couple of days to receive their goods. Apparently, that takes the place of going out and buying something and bringing it home yourself. I didn't see that coming.
We have bought luxurious homes with low-interest mortgages, and even though gasoline is near record lows, we are not encouraged to socialize. That's evident when you walk around and see people with their head buried in a cell phone. We are evolving away from being social animals seeking out human company to a species that huddles in our cave with as little human interaction as possible. I suspect that most of us would work from home if it was permissible or possible. It's difficult to make eye contact with people. Either they are buried in their device, or they are wearing ear buds that signal "don't bug me" to those of us who are too shy to interrupt whatever media they are enjoying.
Suffice it to say, it's a New World. Coupled with the incoming President Trump (there, I said it) and we are at the threshold of a new paradigm - is that the right word - where our thousand-channel TV, cell phone, and WiFi Internet gives us all the life experience we seek. In fact, one could have everything we shop for at our local grocery store delivered to their home, and never have to visit the store at all.
I have soap and razor blades delivered every month because I cannot get either of those products in my local store, either because of taste or price. If it wasn't for the fact that I live less than a quarter mile from the grocery store, I'd be taking advantage of every home delivery option available to me. After all, why would I want to cruise around a store, stand in line, and put up with hordes of shoppers when I can click a mouse and have boxes left on my doorstep by the friendly brown UPS guys?
Why? Because shopping is fun. Or, it can be fun. Or, it should be fun. Convenience has removed the fun of shopping. The retail experience has never been better. There's self check-out, online coupons, and a store on every corner. So, what keeps people at home? That's the $64,000 question, and I suspect that the CEO's of Macy's, Kohl's, Target, et al are holding special board meetings trying to figure it out. They can institute online shopping, but they still struggle to compete with Amazon, which has become the first stop for shoppers.
Meanwhile, stores are closing and more are being built. I struggle to figure that out, and I can only sumize that those decisions were made a couple of years ago, before the symptoms of brick-and-mortar disease showed up.
The world is changing, and as the saying goes: Kill or be killed. The Internet is killing and the stores are being killed.