Globalization 2.0: Implications for Consumers, Big Box Retail, eCommerce Leaders and City Planners

If one were to jump into a time machine to travel back to 1995 or thereabouts, what would the publishers of newspapers and magazines have to say about the “Internet”? One might assume, at first glance, that the Internet would be a publisher’s dream: unprecedented reach beyond the usual regional scope, access to new readership, more advertising opportunities and expanded market share. But that’s not what happened. Hundreds of publishers, both regional and national, found themselves struggling, instead, to make sense of how to translate the digital venue into an improved bottom line.

It didn’t help that this digital medium spawned a paradox: more readers, less circulation; more ad potential, less ad revenue. The very same readership who could be reached at unlimited distance through the Internet now enjoyed a smorgasbord of competing blogs, news and social media outlets from which to gather information. It proved too much, too fast, leaving print media to quibble over an increasingly fragmented market. That the print industry is struggling to remain afloat is widely appreciated now. But what’s only beginning to be appreciated is that much of the economy — bricks-and-mortar retailers, in particular — will face the same paradox: greater sales reach in the face of diminishing returns.

The axe is now poised over the traditional retail space. But are retailers any better prepared than their print news counterparts?

Retail as We Know It — but for How Long?

Until just a few years ago, Americans enjoyed a more diverse retail landscape.

Borders/Walden Books
Barnes & Noble/B. Dalton
Doubleday/Scribner’s

One by one, national booksellers dropped like flies, leaving Barnes & Noble and Amazon to duke it out.

OfficeDepot
OfficeMax
Staples

This time, it’s not only Amazon cutting into the sale of such goods. Office supply chains, too, are slipping thanks to the digital sphere: As more and more businesses and individuals go “paperless” demand decreases. In time, Staples may remain the last bricks & mortar survivor.

CompUSA
Circuit City
Best Buy

For a time, the big three electronics/computer chains coexisted side-by-side. Now only Best Buy predominates on the bricks & mortar side with Amazon all but crushing local retail outlets from the Internet side.

Anna’s Linens
Bed, Bath & Beyond
Linens ‘N Things

Today, Bed, Bath & Beyond is the “last man standing” in the B&M retail segment — even as Wayfair makes rapid inroads on the e-commerce side.

Home Depot
Lowes
Ace Hardware
True Value
Orchard

Although there have been some mergers in this segment in years past, a comparatively wide array of home/garden centers seem to be hanging in there. The same can be said for the likes of AutoZone, Kragen, Pep Boys, Napa and other auto supply B&M retailers. Despite the fact that relatively few Americans change their own oil or repair their own cars, there’s a greater level of diversity in the auto retail segment as compared to the previously mentioned retail segments. Perhaps there’s something to be said for the immediacy of being able to replace a burnt-out taillight — or tap a local hardware store employee’s knowledge to repair a leaky pipe — that helps account for the difference. But that hasn’t stopped Internet-only retailers such as Rock Auto — and the infamous Amazon — from making inroads into this market, too.

Target
Kmart/Sears
Walmart

At present, Kohl’s, JC Penney and Sears comprise the last of the mid-market “anchor stores”. JC Penney is struggling against Kohl’s, while Sears struggles to avert the same fate as Montgomery Ward. The usual Internet pressures apply here, too, but what’s questioned far less is the level of price competitiveness low-end and mid-range B&M retail will offer once the bulk of their B&M competitors are gone. As cost-effective as shopping on the Internet has been through the late 1990s to the present, that, too, has begun to change: Many e-commerce sites now charge sales tax and e-commerce leaders, such as Amazon, are raising minimum purchase amounts to qualify for free shipping.

Serious Questions

As big-box retailers shutter low performance locations in attempt to remain profitable, Internet retailers have less incentive to compete. Let’s not forget that e-commerce gained its appeal by undercutting B&M retail pricing. Without the overhead of showrooms nor the need for physical retail space, e-commerce businesses could afford to pass along a savings. But will that savings continue to land in consumers’ pockets once consumers, by their own pocketbook “vote”, snuff out much of the traditional retail landscape?

Another question that remains to be seen is how long consumers will continue to perceive Internet shopping as a convenience. Immediate gratification has long been within reach of all but the most far-flung rural shoppers. And yet the Internet, much like catalog shopping before it, entails placing an order and waiting upwards of a week to receive an order (with exceptions for a price). Just as consumers have been drawn in by the cost savings or the convenience of shopping at the click of a mouse, it’s also likely that consumers will increasingly appreciate that it’s nearly impossible to ascertain product quality or even judge with accuracy more basic characteristics, such as color, without tangible contact with the product. A significant question going forward is whether consumers will continue to view online shopping as a significant cost-saver or convenience in view of order-to-receipt lag times and the effort it takes to return damaged, defective or unsatisfactory products. If novelty — not merely cost or convenience — is at all a factor, in time the appeal of placing online orders may fade much like big-book catalog shopping through Sears and JC Penney fell out of favor. To be sure, Internet retail is here to stay. But how much more demand exists on the world wide web for the next Amazon?

An important question that regional planners, municipalities and developers should ask at this juncture is whether traditional development projects should go forward under assumptions that prevailed in the past. Until we, as a society, begin to get a better handle on how the Internet will continue to shape economic activity, is it reasonable to break ground on large-scale commercial retail development projects with the expectation of attracting, let alone retaining, big-box anchors? When we hear news of “weak consumer demand” juxtaposed against news of “economic recovery” are we prepared for the fact that e-commerce may perpetuate these seemingly divergent patterns for the foreseeable future — namely, increased commercial real estate vacancies, still more mergers among big-box competitors and the possibility that even in periods of presumed growth big-box retailers may see fit to pull up stake in a given community in order to keep their remaining locations profitable? Are developers and city planners prepared for the fact that it may become increasingly difficult to attract or retain even high-performance anchor stores even in the best of times?

Made In China becomes Sold In China

Walmart made headlines in recent years when an executive email leaked out that asked “Where the hell are the customers?” (or words to such effect). There are only so many Walmarts, Targets, Kohl’s and the like that can enter a given area before the market becomes over-saturated. Many small towns in the 1980s saw their Mom & Pop stores go under when Walmart came to town. What’s lesser appreciated by the public at large is that many of those same Walmarts have pulled up stake upon concluding that revenues do not justify continued operation in such communities. Today, Amazon threatens to do to Walmart what Walmart did to the Mom & Pop stores 20-some years ago. Going forward, commercial retail vacancies may be just as much a fact of life in cities and suburbs as they are in small town America.

It has been said that consumer spending drives about 70 percent of economic activity. And yet, despite the reported recovery, retail returns have remained flat. If decreases in consumer spending were merely a function of economic downturn, it would be reasonable to anticipate a rebound as unemployment rates decline. Economic recovery or not, retail is in the midst of a transformation that regional planners and land developers seemingly appreciate about as well as the print media industry anticipated, in the 1990s, that the Internet may decapitate print. But what lies around the bend is scarier still: Just as the Internet has allowed consumers to bypass their local newspaper in pursuit of free or alternative news sources, the Internet has opened the floodgates to direct commerce with Chinese and Indian manufacturers and wholesalers, among others. In search of better deals, consumers will eventually realize that Amazon, itself, is a “middleman”. (Complicating matters, third-party sellers on Amazon may themselves be Chinese or Indian owned/operated — which would make it that much more difficult for consumers to ask “Who benefits?”) If and when nations with a strong manufacturing base bypass the likes of Walmart to sell direct to the consumer, all bets will be off and most of the profits to be had in the retail sphere will head offshore. Are we ready for globalization 2.0?

If You Build It, They May Not Come

There’s a Perfect Storm inherent in these seemingly unrelated trends. American households have been losing buying power to wage stagnation for many years now. So-called fixed expenses are higher, which erodes disposable incomes further. In many parts of the country — Los Angeles, Seattle, San Francisco, New York, Miami — housing, childcare, energy, food and healthcare costs have gone up ~100 percent over what they were a decade or two earlier. On paper, for example, the median income level in Southern California is far above federal poverty standards, at ~$55K. In reality, however, California has the highest rate of poverty in the nation in part because median wages are considerably lower than they are in other high-cost areas. In some areas of the state, it takes a six-figure income to live modestly. By federal standards, however, a mid six-figure income qualifies as among the proverbial “one percent”. The irony is that SoCal families in the $50-$80K income ranges are taxed as if they’re in a middle class income bracket when, in reality, these families may live paycheck-to-paycheck much the same as their low-income counterparts elsewhere in the country.

City, county and regional planners need to keep broader trends in mind. Housing developers, too, should rethink “business as usual”. The usual set of assumptions about growth and demand may no longer hold true going forward. The situation in over-developed, built-out Southern California may be illustrative of what lies ahead for many areas of the country that attempt to spur economic growth through development. Southern California has an undisputed housing shortage yet an over-supply of vacant retail space. Building still more over-priced housing to correspond to over-priced land values — alongside the usual retail development patterns — may backfire in the years to come. With B&M retail on the decline, existing retail centers alongside new shopping districts are likely cut into one another’s growth. This is to say nothing, of course, on how such trends will shift consumer behavior. Over the coming 15-25 years will suburban consumers, much like their rural counterparts, come to expect that shopping trips, much like jobs, may entail a significant commute? And will this, in turn, export the “car culture” — worsening congestion — elsewhere in the country where urban sprawl has occurred?

Globalization 2.0

For years it was assumed that demand for housing would yield a correspondent retail (and employment) growth pattern. The assumptions and the facts don’t always line up, however. The housing boom in Southern California’s Inland Empire over the past ~25 years has proven, for example, that living-wage jobs don’t always accompany economic development. Now that the Internet competitors are here to stay, spreading “growth” through development becomes an even weaker proposition. Consequently, regional planners in Southern California and beyond should brace for the fact that new housing developments may not correlate to a thriving retail landscape. It has proven challenging enough to attract high-quality jobs to outlying portions of Southern California and beyond in years past. But what these trends suggest going forward is that even low-skill, low-wage job growth — let alone major economic development strides — are far from sure bet.

We are beyond the point of turning back the clock on globalization and the role technology has played in creating some jobs while eliminating many others through increased automation. But perhaps it’s not too late to ask ourselves “What should Globalization 2.0 look like?” After all, if we don’t envision the kind of future that sustains both jobs and environmental objectives, we will exercise little control over either. Positive outcomes aren’t merely a product of free market forces — but the vision to steer the kind of future in which the transformation, instead of threatening the American Dream, extends that opportunity to another generation.

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Six Savvy Job Snagging Tips

Job hunting in a down economy can feel like running a marathon in the dark. How do you market yourself for optimal impact? What’s gimmicky vs. eye-catching? After completing the application and/or the interview, do you call or not?

The typical career-seeker guide emphasizes custom cover letters, asking a friend to help proofread your resume and networking both online and off to keep your word-of-mouth employment prospects fresh. But what should you do once you begin to receive those initial nibbles from a prospective employer or personnel agency?

In two words: Get savvy.

1) Phone Screenings. Phone screenings are both good and bad. Good news in the sense that you’ve risen to the top of the stack. Bad news in the sense that your application may land in the recycle bin before you’ve made face-to-face contact.

The solution? Take charge.

Ideally, when an employer or recruiter cold calls they should first ask: “Is this a good time to speak?”

Oftentimes, recruiters are in a mad dash to submit “their candidate” and the convenient catch may win out over the ideal match. Responding to a voicemail or email hours or days after the fact is in all likelihood time spent on a lost opportunity. The first thing you should do after posting your career profile online is to prepare for the inevitable phone call that comes at a bad time. Do you pounce or pass up?

First, do not hesitate to thank the caller. If first contact comes at a bad time, emphasize your eagerness to answer pre-employment questions at a time of his or her convenience. In this way you avoid the suggestion that you are inconvenienced. Do not volunteer details that can be construed as a lack of interest or an excuse. Stick to your objective, which is to agree on a mutually suitable time to talk. The objective early on should be to learn if the position is currently available or if you are being considered for a future project. The answer will provide a clue about the urgency of the opportunity as opposed to the likelihood that the recruiter or employer is simply seeking to round out their database.

2) Remote Screening vs. In-Person Interview. The go-nowhere interview unfolds when you spend a lengthy amount of time on the phone or in a video conference with a recruiter or prospective employer only to be left to wonder if a face-to-face interview will follow.

What to do? Prepare.

Look at a phone or Skype screening like a date. Your objective is to land a second date. You don’t want to play hard-to-get but you don’t want to give it all away, either. For instance, you may wish to set a 15-minute time limit on the conversation. After that predetermined amount of time lapses confirm your desire for an in-person interview. If the caller puts you off, allow a another 10 minutes to lapse — or the conversation to wrap up, whichever comes first — and make your case: “I feel there is no substitute for a face-to-face interview. Do you have the ability to set one up?”

In particular, don’t mince words when dealing with a recruitment agency.

It is vital not to get too far into an email exchange or telephone conversation without asking a key question: Has the firm or individual in question been authorized to recruit for the job in question? If a staffing agency does not represent the employer exclusively chances are you have been contacted by someone who is skimming career websites in much the same way you are, in which case you will have no special advantage — and perhaps a disadvantage — in working with a middleman. Staffing firms often go up against other agencies and candidates who are applying directly for a job that has already been made public. The one thing a recruiter doesn’t want is to submit you for a job that another agency, or you yourself, beat them to first. So don’t be shy. When contacted about a position for a “confidential client” seek to clarify whether you have already attempted to land that job by another name or another description elsewhere online. Use this opportunity to make a decision to work with an agency or to apply directly.

It is not uncommon after the initial screening to receive a vague answer about when you might be expected to learn whether you will progress to a face-to-face or second round of interviews. Proceed by A) clarifying who, what, when and where that next step may occur, B) asking whether the recruiter or HR representative has any concerns or questions that you might be able to address while you have their attention, and C) requesting permission to follow up at a specific time in the event you don’t hear from that individual first. Your objective is to obtain a name, title, email address and/or telephone number. Make good use of it!

3) The Fishing Expedition: Perhaps nothing is more unsettling than the feeling that your caller is more interested in using you to help better define their job description or salary range or, in the case of staffing agencies, to tap your references to build their own leads rather than to seriously consider you. Some unsolicited recruitment efforts pertain to jobs that do not yet exist and/or the vacancy remains unfilled week after week and month after month because the employer is in no hurry to fill the position.

Solution: Define your expectations.

As an applicant, be on the lookout for job ads that repeat all too frequently. The employer may be indecisive or job turnover is incredibly high, suggesting that the dynamics of the company or organization are in disarray. Determine how much or how little time you can afford to set aside for recruitment firms or employers who routinely advertise the same opening. This economy is what they call an “employer’s market”. There is no shortage of applicants. Qualified help is within reach for employers who are serious about hiring. To keep false hopes at bay and the time and expense of chasing dead-ends to a minimum, learn whether or not you are competing in the interview process for a position held by an internal candidate as opposed to a genuine vacancy. Similarly, if you are invited to undergo pre-interview aptitude testing, ask how many people you are competing against and how to properly prepare.

Safeguarding your morale is as an important consideration as any other. It’s important to discern between opportunities you lost to a more qualified competitor and opportunities that never were. One tip-off is the email or phone inquiry in which the foremost question pertains to your salary history or requirements. This is the employment equivalent of jumping in the sack on the first date. A reputable employer will not solicit your salary requirement as a means to low-ball someone else or to determine how much they will pay for the position. Think about it: If the employer has a very narrow budget for the position they have every opportunity to state as much up front. Most career websites offer hiring managers the option to specify the pay range, which if utilized will all but eliminate job seekers who wish to work for higher pay. In so doing, applicants can take some of the work out of the equation by screening themselves out. So ask yourself: Why should your employer withhold the pay range yet ask each and every applicant — before an interview of any kind — to divulge theirs? Unless your salary or hourly pay requirements are particularly inflexible, save the conversation for a later point in the hiring process. True, some employers will require a salary history up front — but you need not apply if it is too intimate for comfort. (There are plenty more who won’t ask up front.)

4) The Interview: Congratulations! You have their attention. Now it’s time to prove that you can deliver in a face-to-face interview. You know that you have to show up on time, dress appropriately, greet your interviewer(s) with a smile and a firm handshake and understand both the requirements of the job and the company itself.  But what else can you do to stand head-and-shoulders above the rest?

Solution: Strike a balance.

To strike a balance you have to keep two primary factors in mind: The personality of the interviewer vs. your own strengths and weaknesses. Do you tend to be outspoken, blunt or quick to wear your heart on your sleeve? With a little work, these traits can convey confidence and enthusiasm. Without that effort, these same traits can display impulsiveness or negativity. Conversely, do you tend toward introversion, preferring to take your time to warm up to new people and situations? This can convey maturity and professionalism on the one hand, or aloofness and passivity on the other. One way to approach this is to practice the technique of mirroring. Does your interviewer display speech, personality or body language characteristics that you can relate to? Find a way to relate and reflect commonalities. In this respect, an interview is very much like a date. Put your best foot forward and show genuine interest in the person to whom you are speaking. Most people are flattered by a good listener. If you can draw your interviewer out — talking about him or herself as opposed to a scripted list of questions — it’s a good sign. On the flip side, most people are off-put by a poor conversationalist. Contribute to the conversation but keep your side of it succinct, upbeat and politically correct.

5) Qualifications: If your interview is typical you will spend a good chunk of it being quizzed about relevant career history. The problem: These conversations can slip into the past tense. Don’t. Use active tense. A good resume will quantify your level of experience — beginner, intermediate, advanced, expert and/or the number of years you have accumulated in that skill. Depending on the skill of your interviewer, the interview may rehash or elaborate on your application. A successful interview will delve into specific ways in which you can tie the job description to your skills. Come prepared to share your strongest anecdotes and concise examples that follow the PAR format — Problem, Assessment, Response. But that’s not all you can do to increase the odds of being hired.

Solution: Become the interviewer.

The ultimate goal of any hiring decision is to recruit the right person for the job. Sometimes a lack of experience can be offset by an abundance of enthusiasm. In other cases, a lack of interpersonal skills can be overcome with an impressive set of intellectual accomplishments. But more often than not, applicants fall somewhere in the middle — a place where “average” may not leave much of an impression. Turn the odds in your favor by probing for details that go beyond the job description. Are you replacing someone? In so many words, find out what that person did to do your prospective job well — or not. Ask your prospective boss what type of employee he or she wants to interact with and how frequently. What type of corporate culture is at play? Is there a real-world example of someone in a similar role earning a pay raise or promotion? Will your supervisors be most concerned with chain-of-command, collaboration or independent thinkers and “self-starters”? 

The idea here is not to interrogate your interviewer(s). Rather, formulate a few key questions and weave them in and out of the interview at natural junctures in the conversation. Once you have gleaned a reasonable amount of information about what makes your interviewer tick, present yourself as a solution. Recap your sales pitch at the close of the interview in a three-point format. Reflect what you perceive to be the challenges and opportunities of the position and summarize, briefly but specifically, how your presence at the company can provide a pragmatic, interpersonal, innovative or profit-building solution. The bonus? While you are in the process of asking questions of your own you will appear less passive and more intelligently engaged in the conversation — and the job at hand. And while it may seem all too obvious, end your interview with a reminder that you enjoyed the conversation and would like to land the job!

6) Follow Up: You’ve been contacted by email and phone. You have competed the first round of interviews. What do you do next?

Solution: Don’t be a stranger.

It’s a fact: Some employers will intentionally ignore a promising prospective candidate, preferring instead to hire someone who shows persistence. This presents a challenge for the job seeker because there’s an equal but opposite camp: “Don’t call us, we’ll call you.” Here’s where a great deal of luck and some old-fashioned intuition come into play. If you feel you are a 10 out of 10 match for the job, be bold. If you feel the interview was only lukewarm or the job description a bit “over your head”, err on the side of caution. If the job description says “Do not call”, email instead. If the interview has already taken place, don’t leave without a business card and a clear idea what to expect. If you have already come as far as an in-person interview it is particularly important to ask for permission to follow up — and when best to do so — and then keep your word by doing just that. Immediately following your interview, meanwhile, mail a hand-written “thank you” note. The post-interview period is not the time to become overly creative/desperate (a stalker). Follow, instead, the KISS rule: Keep It Simple Stupid! Specifically, A) don’t try to sell yourself yet again in your correspondence; and B) don’t write anything that sounds overly scripted, generic or canned (impersonal). Do tell your interviewer(s) in your own words that you would be honored to work with him or her; C) put to use the same common sense about your post-interview communication as you did in your initial application: Don’t submit something you haven’t proofread, and if possible enlist the help of someone whom you trust for their strong English skills and their astute sense of objectivity.

Six savvy job hunting tips later, you are now equipped to meet the challenges of a tough job market. Go for it!

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