The future of small business and retailing...

[BayView]

this is the same mindset that "keeps people down" financially, or keeps alcoholics as alcoholics, or fat people fat. it's only when you look around the room and realise you're the poorest there, or the pseron with the biggest vice, or theperson that can't get on a flight for their honeymoon that the process of realisation hits home.

then you move into that 7 stages of recovery.

No; what you do is;

go on stress leave indefinitely, then call up ACA to cover your story of being victimised by a ruthless greedy capitalist society because you're poor and discriminated against because you can't get into an airplane seat (they should be made to accommodate the larger folk, of course), and eventually go on the dole, get rental assistance and ride around to the Centrelink office on one of those wheelchair scooter thingies.

 

[VYBerlinaV8]

we should all pay more for milk so that the milkman gets his job back. and the baker. Sadly I am old enough to remember mum leaving the tin at the front door and coming home to open the lid and grab the fresh baked loaf. I vaguely recall the kids in the street running out to greet the old bloke.

let's ban the internet and mobile phones too. they take away too many jobs. think of the poor bank tellers.

Reminds me of something my late grandmother said a few years ago:

"This internet, can't we just turn the whole thing off for a while?"

 

[Angel]

harvey to open another store

In the affluent family-friendly leafy middle class suburb where i live, there is a bit of building happening on the once-vacant block next to Woolworths. I recently discovered that HN is opening the week before christmas. They already have two stores just ten minutes drive away from here (in 2 different directions). They cant be suffering from internet sales too badly then.

There is an IGA store five minute's walk from my house, and it is very well patronised at any time of the day and evening. No way am I going to get in my car and drive 3 klms to a supermarket for a $2 bottle of milk when I can walk to my corner store. I love it.

 

[BayView]

There is an IGA store five minute's walk from my house, and it is very well patronised at any time of the day and evening. No way am I going to get in my car and drive 3 klms to a supermarket for a $2 bottle of milk when I can walk to my corner store. I love it.

Well done.

My kinda thinking.

We need more of this.

 

[Aaron Sice]

There is an IGA store five minute's walk from my house, and it is very well patronised at any time of the day and evening. No way am I going to get in my car and drive 3 klms to a supermarket for a $2 bottle of milk when I can walk to my corner store. I love it.

that's great.

now get your local govt to agree to that in a new subdivision....?

after what i've just been through - talk of de-centralisation is like discussing where to put the next Auschwitz.

 

[Ausprop]

Reminds me of something my late grandmother said a few years ago:

"This internet, can't we just turn the whole thing off for a while?"

I genuinely think it's all gone too far... we are now on call 24/7 to all and sundry and if someone can't get hold of you after an hour all hell breaks loose. It seems a mobile is almost compulsory these days. my online banking did some sort of security upgrade today - there was no tick box for "I don't have a phone"

 

[willister]

I genuinely think it's all gone too far... we are now on call 24/7 to all and sundry and if someone can't get hold of you after an hour all hell breaks loose. It seems a mobile is almost compulsory these days. my online banking did some sort of security upgrade today - there was no tick box for "I don't have a phone"

I agree....finding the right "medium" or level of comfort to co-exist with technology without really being intrusive is difficult to find. Personally I'd say the early to mid 2000s would be that "ideal".

I had an email account on hotmail but which was limited to 50mb or something I don't remember, so this was useless for sending over docs or anything. It was rarely used except as a casual way to email friends/family who were overseas instead of writing letters. Most official letters were still posted back then.

I had a mobile phone (dad's actually), text only, hardly used except for calling to pick me up at the station when I didn't have a car after uni.

 

[lizzie]

I know this is an old thread - but thought of it last night whilst undertaking a little online shopping.

I usually prefer to shop instore if I'm not 100% sure what I'm after - but last night I bought some herbal tablets that my vascular surgeon recommends for 1/3rd of what they cost me in the health food shop.

Then wandered over to Diggers.com.au and ordered an orchard full of fruit trees for our new property - okay - the price was less than what I'd pay at the nursery (being a member) - I didn't have to drive an hour round trip to find what I wanted wasn't in stock - and they get delivered for a grand price of $8.50 - also got a free strawberry plant thrown in.

Bought three feature lights online the other month because, after scouring the shops, I couldn't find the look I was after.

Actually I buy something online most weeks (horse gear being a big one recently). Even found my new puppy online.

Retail shopping isn't dead - bought two bookshelf units instore recently - but I can see it going the way of the video store - smaller, exclusive, one of every item that you then order from the warehouse (as I did with the bookshelves).

Can't help but wonder at the future of shopping centres.

 

[Richard Feynman]

I personally, have been purchasing goods online for 15 years. The tens of thousands of dollars (not to mention time) I've saved in doing so cannot be overstated. Almost everything in my home (including some furniture) was bought online.

I anticipate enormous changes in retail in the next 5-10 years.

In addition to far more business being done online (better for consumer and business – lower overheads, costs down for both), so SO many products are dematerialising and this will continue.

e.g. Buying an album or book now is as simple as a few clicks and you have the product within seconds. No waiting for delivery. No delivery costs. No physical item needing to be produced. No having to drive/take transport somewhere to make a purchase. No space taken up in your home by the new product.

The next stage of this is 3D printing which is progressing at a rapid rate. In the not-too-distant future consumers will be able to download "plans" for their 3D printer to physically create products on demand (actually, this is technically already happening but the range of materials 3d printers can use is still limited). So even physical items will be able to be instantly downloaded then rapidly produced on the consumer end. The freight industry is in for a shock. The manufacturing industry as well. Not to mention retail.

Further to this, medicines are starting to be 3d printed molecule by molecule so even pharma is going to change dramatically (plus, we're just a few years off a dektop computer being able to sequence your personal genome in no time at all, and provide medicine suited specifically to YOU, rather than the cookie-cutter medicine we use now).

Times are changing.

 

[BayView]

Folk throw in glib lines about how if industry dies it won't matter; they (the employees who were in that industry who lost their jobs) will simply find something else, things change and so on.

No need to worry.

Folk even gloat and are proud of how great their internet shopping deals are....

"Bought XYZ product for $ABC from Spain last night...normally double that here!!"

Ok; so, in this Country we presently have;
1. An active immigration mindset and program to increase population.
2. A contracting and decreasing of manufacturing (less exports).
3. An ever-increasing volume of imports from places with cheaper goods
3. A never-ending push for higher wages and better worker's conditions.
4. An increasing volume and percentage of sales from the internet.
5. A decreasing volume of sales and percentage from retail stores.

So, take away retail in shops, take away jobs in manufacturing and agriculture, increase the population, pay everyone more...whaddya got?

I can't see a sudden monumental boom in internet based businesses that will employ the thousands who are going to be throw out into the cold.

That leaves tourism and service industry jobs?

I hear they're cutting back on schools and hospitals too.

What will happen to all the many retail and other commercial properties that will be left empty? This will be a massive slowdown for the building industry in the end on top of the rest

A lot of out of work building industry folk, quite possibly to add to the pile.

But let's keep on filling up the joint with folk.

Does anyone wanna come and work at my workshop for $10 per hour, no holiday or sick pay? I'll pay your super though. I'm a good boss.

 

[Aaron_C]

Folk throw in glib lines about how if industry dies it won't matter; they (the employees who were in that industry who lost their jobs) will simply find something else, things change and so on.

No one likes to see people lose their jobs but Government-funded enterprises which are not viable without Government support should not be operating. Socialism is an experiment that we've played with and has failed. The cost to the individuals involved is outweighed by the removal of the dead-weight loss to taxpayers. Otherwise we could argue that Government fund ALL industries since that support will create jobs. This is obviously a false statement.

Folk even gloat and are proud of how great their internet shopping deals are....

I think you get what you pay for. I also think online shopping is not as ubiquitous as it seems - plenty of older people like my own parents wouldn't bother because they view it as highly risky (fraud, not getting what you described, lack of return policy etc). I personally do shop online but only for certain items where I know the quality is assured like printer cartridges. I do think that local retailers need to change their tune though. Frankly most of the retailers here are rip offs, and there is nothing wrong with such people facing competition. You could argue that their prices are high because they have to pay exorbitant rent, wages etc but in capitalism you have to control it.

Ok; so, in this Country we presently have;
1. An active immigration mindset and program to increase population.
2. A contracting and decreasing of manufacturing (less exports).
3. An ever-increasing volume of imports from places with cheaper goods
3. A never-ending push for higher wages and better worker's conditions.
4. An increasing volume and percentage of sales from the internet.
5. A decreasing volume of sales and percentage from retail stores.

I agree that something has to give, particularly the point about higher wages. Active (legal) immigration is a great thing because migrants bring a good work ethic, usually open businesses and generate spending because migrants need to buy food/clothes/shelter like everyone else.

So, take away retail in shops, take away jobs in manufacturing and agriculture, increase the population, pay everyone more...whaddya got?

It's fine as long as the pie increases. This means lower taxes, more businesses, less welfare. As Australia gets richer it is only expected that manufacturing decreases in place of services. You simply can't compete in manufacturing with people who lives in third-world countries on $2 a day. It's impossible - nor should it be possible. People say we 'should' have manufacturing only because of some nostalgic feeling that we need to make things. It doesn't make it good public policy if the entire industry loses money.

I can't see a sudden monumental boom in internet based businesses that will employ the thousands who are going to be throw out into the cold.

I suppose that is true to an extent. However, that is the price of technology. It makes things more efficient so we can do more things with less people. People who are desperate or find a niche will undoubtedly find a way to create a business or new idea that will need people to come on board as employees. We can't constrain our thinking to just bricks&mortar retailing.

That leaves tourism and service industry jobs?

Yes, since a developed economy has a massive reliance on services. That is why it is a rich country. Would people in poverty-stricken Sudan pay top dollars to get someone to give them financial advice? This is where the economy is headed by virtue of our wealth.

What will happen to all the many retail and other commercial properties that will be left empty? This will be a massive slowdown for the building industry in the end on top of the rest

That is a matter for the commercial landlords. Frankly I think that the rent they charge is ridiculous and having the market rents fall due to this kind of shift can only be a good thing for businesses. It will mean more people can open shops, prices can be lowered etc. As for the building industry, they will find a way to make money. Perhaps they have to lower margins to stay competitive, or they need to close shop. More likely they will have to cut the wages they pay to their subcontractors as the market dictates what someone is worth.

A lot of out of work building industry folk, quite possibly to add to the pile.

But let's keep on filling up the joint with folk.

People can always find work. It's just a matter of how much you think you are worth and/or willing to accept. A childhood friend of mine doesn't work because he thinks he's worth at least $30 per hour although he's been offered casual/part-time jobs paying $25 ph. Now all he does is stay at home and play computer games. People here just have this entitlement mentality that they have to get paid $X or they won't work. This is what I think causes unemployment more so than 'lack of jobs' per se.

 

[BayView]

People can always find work. It's just a matter of how much you think you are worth and/or willing to accept. A childhood friend of mine doesn't work because he thinks he's worth at least $30 per hour although he's been offered casual/part-time jobs paying $25 ph. Now all he does is stay at home and play computer games. People here just have this entitlement mentality that they have to get paid $X or they won't work. This is what I think causes unemployment more so than 'lack of jobs' per se.

It's not that glib and simple, Aaron.

To say "people will always find work" is fine when there is plenty of work around.

I'm saying this is not going to be the future...maybe as check-out dudes in Aldi or at the KFC.

I'm saying that this is a decreasing situation - especially for people unskilled, or for folk who are specialised in one area who lose their career.

It's going to get harder, and harder, and harder.

Mortgage Brokers for one example; many are ex-bankers...earning a nice living in most cases as an MB...mine is one of those.

Let's say a truckload of them are without jobs all of a sudden - this could happen - where will they all go? Back to the Bank? What about their staff?

What if the Banks aren't hiring, and what if all the MB's have hocked their backsides up with lovely mortgages and cars etc?

Not all folk can just swan into a low-paying casual or part-time job after several years of life in the workforce and with families and commitments etc.

Would you drop the tie and suit and pick up the shovel for $20 per hour as a labourer with the local brikkie?

He won't take you, because there are loads of unemployed builders who he would grab first.

There are only so many mowing rounds to get into if you are a retrenched 50 year old exec....what about the girls?

I guess there is always real estate or used cars as a fall-back. Could you do those jobs?

That is a matter for the commercial landlords. Frankly I think that the rent they charge is ridiculous and having the market rents fall due to this kind of shift can only be a good thing for businesses.

Glib statements like this for example; what do you reckon will be the ramification of a massive across the board drop back in rents?

I can see many LL's going under, which will be a nice thing for us investors lurking around...then a glut of properties, a lot of long term vacancies, because retail is dying a death, a lot of rent reductions to get tenants, and so on.

That's just one aspect of the equation.

 

[Ideo]

It's not that glib and simple, Aaron.

To say "people will always find work" is fine when there is plenty of work around.

I'm saying this is not going to be the future...maybe as check-out dudes in Aldi or at the KFC.

It's going to get harder, and harder, and harder.

I'm saying that this is a decreasing situation - especially for people unskilled, or for folk who are specialised in one area who lose their career.

Mortgage Brokers for example; many are ex-bankers...earning a nice living in most cases.

Let's say a truckload of them are without jobs all of a sudden - this could happen - where will they all go? Back to the Bank?

What if the Banks aren't hiring, and what if all the MB's have hocked their backsides up with lovely mortgages and cars etc?

Not all folk can just swan into a low-paying casual or part-time job after several years of life in the workforce and with families and commitments etc.

There are only so many mowing rounds to get into if you are a retrenched 50 year old exec....what about the girls?

I guess there is always real estate or used cars as a fall-back.

This has happened to a lot of people I know in the UK.

Engineers, Accountants, Architects etc etc. A lot of them tried to get jobs stacking shelves etc but why pay a 45 year old who had spend 20 years behind a desk and knew how to run a business when you can get a 19 year old to do it for less pay?

As for retailers pricing themselves out of the market, it isn't really their fault. A lot of the time it is the wholesalers/importers who are charging extortionate rates for products. E.g. I get tyres from the US for trackdays as they take too long from Australia (I can get them shipped from the US in 6-8 days, I have tried to get them here and have a 2 month delay) for less than the wholesale price that a tyre retail outlet gets charged. This is not the retailers fault. But they are the ones that get the blame.

 

[Aaron_C]

It's not that glib and simple, Aaron.

To say "people will always find work" is fine when there is plenty of work around.

I'm saying this is not going to be the future...maybe as check-out dudes in Aldi or at the KFC.

But you've just proven my point. There is always work. Perhaps not in your preferred field or pay grade but there is something.

Mortgage Brokers for example; many are ex-bankers...earning a nice living in most cases.

Believe me, most brokers aren't earning a nice living, especially these days post-GFC

Let's say a truckload of them are without jobs all of a sudden - this could happen - where will they all go? Back to the Bank?

They would go to another bank or similar industry role preferably, but if not then they will have to accept whatever they can get.

What if the Banks aren't hiring, and what if all the MB's have hocked their backsides up with lovely mortgages and cars etc?

Then that is bad luck for them. We all make commitments based on our job/business income and sometimes the income equation stops suddenly so we just have to make do with what we have.

Not all folk can just swan into a low-paying casual or part-time job after several years of life in the workforce and with families and commitments etc.

They can't, or they don't want to? Of course it's not ideal - no one is suggesting it is. However, if that is the reality of the situation there isn't much use complaining about it.

I guess there is always real estate or used cars as a fall-back.

Some of them make good money. Why bother with a degree?

 

[Fifth]

I have to agree with Bayview. Globalisation and efficiency are at the expense of local jobs and, in time, at the expense of our society and economy. Whilst I’m not advocating for obsolete industries to be kept alive, I am rather pessimistic of the ‘new industries replace the old’ mantra. I don’t think enough new industries can be created to replace declining industries. The unemployment rate will keep ticking upwards, though we’ll find new and innovative ways of tweaking those statistics so we can declare ourselves at near 'full employment’.

It’s all very nice to say that Australia should focus on becoming a skilled technical workforce focusing on specialist industries rather than menial labor but I can’t see that happening. Even if we could complete change our mindset and somehow manage to become industries leaders able to compete on a global scale, these ‘technical’ jobs can just as easily be offshored as a call centre job. In a country like India for instance there is no shortage of highly educated and capable people prepared to work for less than their Australian counterparts.

In my opinion the decline of manufacturing was an important factor in the rise of the welfare class. As more industries decline, the welfare class will can only but increase. I know a lot of middle class workers are unconcerned, they figure factory workers, shop assistants, call centre operators and data entry clerks are fairly inconsequential and that it’s pretty much their own fault for not adapting to our new and innovative society. Whilst the IT worker on 150k may not be bothered by the data entry department being offshored, I bet he’ll care when it’s his job being offshored. Same goes for so many middle class occupations.

A lot of those losing their jobs will be able to find a replacement job, but as the jobs dwindle eventually there won’t be enough replacement jobs to go around. There are some growing industries but in my opinion they are not enough to absorb the displaced workers.

What can we do about this? I have no frigging idea. Personally, I do my supermarket shopping at Coles, buy books online and buy my foreign made clothes from Kmart so I’m not exactly supporting local jobs or saying no globalisation. To be honest, I think this country completely lost its way several decades ago when we decided that an official unemployment rate of 5% (with the actual rate being much, much higher) was full and optimal employment. We decided that keeping a certain percentage of the population perpetually unemployed was beneficial to the majority.

No-one really seemed to care when manufacturing declined and we ignored and encouraged the welfare class that was created so it’s strange to see those same people cry foul now that more genteel jobs are in the firing line. Stranger still are the people who pretend nothing is happening at all. Such faith we have in Australia's ability to adapt to this new and exciting world.