Friday, May 11, 2018

Quickies: Online Retailing And Overlooked Consequences

     I’m a frequent user of online retail shopping, with Amazon at the head of the line for most things. But I must note that the ascendancy of online retailing has had consequences that some would deem negative. Not all of those consequences are immediately obvious.

     The “brick and mortar” stores are finding it difficult to compete with online retailers, at least in those sectors that involve products that require no customization. When it comes to products that people prefer to try out in person before making a purchase, the B&M sector is holding its ground. But there are interested parties, other than the B&M retailers themselves, whom we seldom think about. Some of them are only just beginning to feel the effects.

     For decades, much money has poured into packaging research, design, and testing. A significant part of that funding has gone into designing and testing for “shelf appeal:” how to get the shopper to take the product off the shelf, even if just for a closer look. The approach varies with the product category, of course, but in B&M retail it’s an important consideration across the spectrum.

     Product packaging for online sales has a wholly different set of emphases. The product has already been purchased before the packaging starts to matter. This is bound to put a considerable number of package designers who specialize in “shelf appeal research” out of work.

     There’s nothing much to be done about it, of course. This is part of capitalism’s cycle of “creative destruction” (Joseph Schumpeter). On the bright side, if less is spent on some aspect of package design, the product can be made cheaper, which will benefit the purchaser. Moreover, aesthetics affect an expanding number of fields in our increasingly online age, which suggests that other opportunities might be opening up that would absorb those laid-off package designers.

     Just another case of Henry Hazlitt’s “Lesson:”

     The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. [From Economics in One Lesson]

     Some of those consequences are not easy to see at one’s first glance.

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