Neo-Economics

[MathNerd05]

In a recent series of case studies performed across the country many large companies such as Sears, Wal-Mart, Circuit City, Motorola, Dell, JCPennies, and Schnuk's Grocers have all made indications of moving toward higher volume internet sales. While Dell already does a whopping 73% of its business over the internet Schnuk's does almost none. The grocery chain hopes to be the first to offer online purchasing with local delivery.

Economists have severly differing viewpoints on the trend. Conservatives strongly feel this move will jeopardize the entire modern commercial structure, eventually leading to unchecked inflation, mass-layoffs, and bankruptcy. Moderates take a more optimistic view citing slow transitions and the markets ability to adapt. Both arguments have merit but are not without holes.

My question is: Will an internet-based consumer population spell disaster for the suburbanism? While Wal-Mart has specifically targeted areas between 5k and 25k people (thus areas least likely to succumb to total internet reliance) chains like Sears have focused entirely on an urban image and consumer base leaving them extremely susceptible to an internet boom.

Also there is the question of income taxes, sales taxes, increased costs, etc. For example, would a company rather incorporate in Tennessee with a 9.25% sales tax versus Nevada with a 5.25% sales tax? And what about higher costs of incorporation? Would companies flee from Ney York, Illinois, and California in favor of Nevada, Mississippi, and Wyoming?

Could retailers really move toward total internet sales and leave the present generation as the last one who got through college working at Dillard's, Best Buy, and K-Mart?

[Neo]

Neo-Economics? Hmmm...this may interest me, haha!

[monsoon]

Actually, the local sales tax whould only be applied to purchases of those who actually lived in the same state. Almost everyone else would not have to pay it so that probably isn't an issue here.

The Internet provides a very good outlet for retail, but I don't think the store is going to go away anytime soon. Too many mass consumers see it as a form of entertainment to go and peruse merchandise setting in retail outlet. Sad but true.

[Spartan]

I agree with mertoboi. The internet is a great thing, but most people want to see what they are getting in person. There is alot of trust involved with the internets descriptions of products that alot of people don't have.

I'm one of those people I buy the occasional product online, but I like to go to the store and get whatever it is I need.

[sleepy]

Wasn't this supposed to be the next big thing about 5 years ago? You know, with petfood.com and all the other dot com flops.

I can't imagine too many people would buy groceries online--those are very price sensitive purchases, and most folks won't want to pay the surcharge for delivery.

[Spartan]

Yeah, it was called the dot com bubble...

[Cotuit]

The grocery chain hopes to be the first to offer online purchasing with local delivery.

<{POST_SNAPBACK}>

Well they're close to a decade too late for that. Peapod

I will echo what pretty much everyone else said. If everyone starts doing all their shopping online, when will they get out of the house (they're certainly not going outside for excercise)? There's a convenience factor to some online shopping, I buy most computer related things online (including my computer itself), but for pretty much everything else, I want to touch it and see it, and to leave my house. I also want my things now, not tomorrow if I order by 10am and pay a premium.

[Aessotariq]

I do a bit of both... Preaching to the choir: I like to window shop and look at products in my spare time. For certain items, I'll compare retail prices with prices online, and then check to see if the product is available on eBay. When you don't have the time to go someplace but have the luxury of waiting (paradox?), online shopping is great. For stuff that's needed "now," I'll take the opportunity cost of picking it up myself.

Computer parts and other electronics: online if I can wait, or stop by the computer and electronics warehouse district by the airport.

Groceries: I really miss our online grocery store. Here in South Florida, we used to have PublixDirect, the online version of our local chain. It was great -- they had everything, including perishables, produce, deli and bakery items, meat, and other stuff requiring refrigeration. It had a very loyal following, but unfortunately it only lasted a year and they shut it down due to low demand. The delivery fee was only $10, and I would easily spend $200 a hit each time I shopped online, and the delivery man would bring the groceries into your home (he even wore plastic booties over his shoes so that he wouldn't track dirt inside ). The delivery easily paid for itself. Did I mention that I really miss them?

[Neo]

When I lived in Chicago, I usually used the Peapod service to obtain my groceries. It was great as I could do my grocery shopping at work and have it delivered to my kitchen counter by the delivery guy! I really miss that service, it's not available where I live now. It's one of those urban luxuries.