A few weeks ago, I was at a conference in the downtown of a small U.S. city. The subject was retail, and, specifically, the future of downtown retail. Brick-and-mortar retail. It was the day after the United States Supreme Court ruled (South Dakota vs. Wayfair Inc.) that Internet retailers can be required to collect sales taxes, even in states where they have no physical presence.
According to a report in the New York Times, Marty Jackley, South Dakota’s attorney general, called the ruling a big win for “Main Streets across America.” He said the decision could be particularly significant for rural areas where local businesses have been hit hard by competition from online retailers.
So there I was, in a town of roughly 80,000 inhabitants. In a county of perhaps 140,000. In a citizens-participating, standing-room-only discussion of retail’s brick-and-mortar future in a lovely hotel right on First Street downtown.
We talked about what makes specialty retailing go in these days. About “authenticity” in retailing and what it means, about lessons from the so-called digital natives.
Yah, yah, yah.
Then a hand went up, and a deeply-felt concern was expressed about the future of the local hardware store. The type of place, evidently, with grit on the floor, and a long-time proprietor who could find you a metric-sized left-handed whaddycallit in a shake of a lamb’s tail.
From the description, it sounded like the kind of place that oozed with unique merchandise and expertise. The kind of place that solved problems, and not just sold stuff. The kind of place my grandfather Burkholder visited for fun.
Authentic? Absolutely. Cherished by customers? No question. But in this touristy area, the rent continues to go up. It’s horribly tough to find good help. The next generation went long ago to the big city. And a developer thinks the hardware store’s location would be great for another hotel.
There was a pause.
And then I asked for a show of hands from the 200-plus individuals in attendance. Nearly all locals.
“How many of you are Amazon Prime members?”
At least half of the attendees’ right hands climbed into the air.
Sorry, Mr. Jackley. This is not about price. It’s not been about price for some time.
According to the Times, Amazon already collects sales tax in the 45 states that have one, and Wayfair already collects sales tax on roughly 80% of its orders.
June’s Supreme Court decision is not going to slow down a high-speed train that long ago left the station.
With the clear exception of deep discount retailing, today and tomorrow’s value proposition is all about ease of ordering, convenience of payment, and a global expanse of merchandise opportunity.
All delivered to your doorstep.
In the next hour or so.
I didn’t have an easy answer for the small town. Do you?