#amanda mull

[pablolf]

Venture capitalists do not have much to offer these very normal people. The notion that true convenience is staying at home with everything you need brought to you, instead of living in a neighborhood where the things you need are available nearby in the course of your day, is, in my mind, a huge tell as to why investors refuse to stop losing money on these companies. It’s a consistent blind spot of the industry, and one that betrays the limited imagination with which wealthy investors envision the lives of regular Americans—if they really bother to envision our lives at all. To many billionaires, isolation away from the hoi polloi must sound luxurious and desirable—or, at least, that belief is commonly reflected in the lives they lead, the businesses they fund, and the policies they champion. But as many Americans realized during the worst days of the early pandemic, when demand for grocery delivery soared, that kind of isolation isn’t all that fantastic of a lifestyle choice. Mostly, it’s just kind of lonely.

Of Course Instant Groceries Don’t Work

[venomade]

American Shoppers Are a Nightmare

Customers were this awful long before the pandemic.

As department-store barons built a market for their businesses, they were also quite intentionally building something far grander: class consciousness. Leach writes that the introduction of shopping was fundamental to forming middle-class identity at a particularly crucial moment, as the technological advances of the Gilded Age helped create the American office worker as we now know it. Cities swelled with this new kind of laborer, who had more disposable income and leisure time than previous generations—and whose lives were much different from the era’s industrial workforce, which toiled long hours for low pay in brutal, dangerous conditions. In this distinction, the department-store proprietors saw an opportunity.

Retailers won over this growing middle class by convincing its members that they were separate from—and opposed to—industrial workers and their distrust of corporate power, Leach argues. Department stores used tools such as credit accounts to encourage people to imagine the better life they deserved and to spend aspirationally. For the price of customers’ purchases, the stores’ legions of service workers gave the newly flush a sense of superiority, as well as a readily accessible group of inferiors on which to impose it. Customers might not have been able to afford a household staff to do their bidding like the era’s truly wealthy, but corporate stores offered them a little taste of what that would be like. The middle class began to see itself as the small-time beneficiaries of industrialization’s barons.

As department stores rose in cities across the country, another enduring facet of service work was gaining ground in other types of businesses: tipping. Previously confined to a few lavish European-owned hotels in America, tipping “aristocratized consumption,” Leach writes, offering the middle class another glimpse of upper-class comfort and power. Tipping ratcheted up the level of control that members of the middle class could exercise over the service workers beneath them: Consumers could deny payment—effectively, deny workers their wages—for anything less than complete submission.

[ritaglietti]

[pablolf]

The physical ramifications of isolation are also well documented. Julianne Holt-Lunstad, a psychologist and neuroscientist at Brigham Young University, has found that social isolation increases the risk of premature death from any cause by almost 30 percent. “The scientific evidence suggests that we need a variety of kinds of relationships in our lives, and that different kinds of relationships or social roles can fulfill different kinds of needs,” she told me. People maintain hygiene, take their medication, and try to hold themselves together at least in part because those behaviors are socially necessary, and their repetition is rewarded. Remove those incentives, and some people fall into despair, unable to perform some of the crucial tasks of being alive. In people at risk for illness, lack of interaction can mean that symptoms go unnoticed and arrangements for medical care aren’t made. Humans are meant to be with one another, and when we aren’t, the decay shows in our bodies.

The Pandemic Has Erased Entire Categories of Friendship

[z34l0t]

Self-Checkout Is a Failed Experiment

Please, not another “unexpected item in the bagging area.”

[quotesfrommyreading]

The subscription model has proliferated over the past decade for similar reasons across markets, according to Robbie Kellman Baxter, the principal at Peninsula Strategies and the author of two books on subscription businesses. Online shopping desensitized people to giving out their credit-card number. Software that businesses employ to create and manage subscription programs has become widely available and easier to use. People who have had a good experience with a ubiquitous subscription service—Netflix or Spotify or Amazon Prime—will generally be more open to trying more. But the most important reason, Baxter told me, is that subscription services, when run well, are extremely good business. They make customers more loyal and provide steady, predictable revenue and detailed data on how each individual behaves. That can make a business not only more stable, but also a more attractive target for investment.

The downside of the model’s popularity is that it has generated tons of bad subscriptions. “A lot of boards and executives are now saying, Let’s get some subscription revenue, without thinking about why that would be good for the customer,” Baxter said. Paying a nominal fee for access to large content libraries, bulk discounts, gyms, or car shares can be a good deal, as long as you actually use the service, but the math can get a little trickier when a business is asking customers to pay for regular deliveries of a product: Some things go bad quickly or have especially thin margins, and a person’s need for a monthly box of raw meat or new types of hard liquor probably varies more than their desire to listen to music. Also, try as I might, I can think of no plausible long-term use case for something like Fabletics, which sends people monthly boxes of new workout clothes.

 —   We’ve Reached Peak Subscription

[quotesfrommyreading]

Many of the most popular subscription services began their lives as start-ups, which meant that investors flooded them with cash in hopes that they would acquire as many customers as possible, as quickly as possible. Typically, the services did so by losing money hand over fist, charging a nominal fee or offering months of free service or product to anyone who signed up. In theory, that would allow them to create an economy of scale, bringing in a little cash from a lot of people and bringing down the per-unit cost of whatever they were offering. In most cases, though, that hasn’t exactly worked out. Prices go up a lot, businesses lose a lot of customers, or both. Even in 2016, when meal-kit subscriptions were the new cool thing, the companies selling them lost as many as 90 percent of their customers within six months, once the steep discounts had expired. (Unfortunately for customers, highly successful subscription services also tend to become a worse deal over time, long after they’ve become profitable: Netflix, which cost $8 a month when I became a subscriber in 2011, recently raised its prices for the fifth time in seven years. Amazon Prime, too, recently announced rate increases for American customers.)

The phase we’re in right now might be best described as a subscription shakeout. As more markets become oversaturated with these kinds of services, more buyers will get bored of the concept entirely, and investors will eventually become weary of waiting for profit. At that point, a few common options are on the table: Some businesses will close entirely. Others will look for more funding to enable them to lose more money acquiring new customers, hoping to reach a sustainable scale. Others will go the traditional retail route, looking for more revenue by putting their products on shelves at big-box or grocery stores, no subscription required. Those with strong name recognition can sell chunks of equity to existing companies, as Birchbox did with Walgreens, which allowed the pharmacy chain to construct Birchbox displays of brand-approved beauty products in some of its stores. Some of the highest-profile subscription services cashed out before arriving at this phase, as Dollar Shave Club did in 2016 when Unilever acquired the company for a reported $1 billion—a deal now regarded as kind of a dud.

 —   We’ve Reached Peak Subscription

[quotesfrommyreading]

Subscription boxes have another notable downside: When you don’t use what’s sent to you, it piles up in your home or rots in your fridge, a regular reminder of fiscal and physical waste. Baxter describes that feeling as subscription guilt, and she says that it’s one of three big contributors to what she sees as growing fatigue with subscriptions as a concept. The other two will likely sound familiar: frustration at constant prompts to subscribe to products or services you’d rather own outright or pay for à la carte, and bad behavior by companies that trick people into signing up for subscriptions or make canceling difficult. These reactions don’t just affect the businesses that provoke them, Baxter said. They can cast a pall on the model as a whole, affecting people’s willingness to engage with very different products that share the same price structure. The more bad subscriptions there are, the harder a sell any new subscription is.

 —   We’ve Reached Peak Subscription