..and when the sun rises again tomorrow, we'll see how far we've come ...

..and when the sun rises again tomorrow, we'll see how far we've come ...

... just to remind myself why I'm doing this ...

Depending on our personalities, the world can be a crowded place or a very lonely one. For those who seek comfort in numbers, there is no shortage of hangers on, but for those who avoid that circus, keeping thier own counsel can leave them feeling quite alone and disengaged from the mad place we call home. Life is a trade off and most of us choose how we live it.

For me, I'd rather work things out as best I can, using my own thoughts and feelings to sort things out. Following the crowd has never been a temptation to me, but that has its price, one that I'm totally comfortable with every day I get to stand up and be the person I aspire to be. When I sometimes lose track of who that is, I come here to remember, to reconnect and to resume my quest.

These posts are a reflection of some of what matters to me and it's a privilege to have the opportunity to collect these thoughts as they form in my head, as they prepare the way for my life, as it evolves from one day to the next. They re-inspire me when things seem to be floating about, with no particular aim or purpose, and it does happen from time to time.

So, today I had these thoughts that I think are worth writing down for the future me to look back on when I need to ...

Monday, December 31, 2012

Integrity in retail ? ... prove it!

50%, 60%, 70% and even 90% OFF! Just who in their reasoned mind believes it? As a retailer, when I see this kind of promotional activity, the questions I ask myself are 'off what?', what kind of margins do they work with? How can they live with their principles if indeed they sell these items for the full base amount {before the OFF part}at ANY other time? Who is that willfully blind to such practices at any other time when they see such baiting? ... and on and on.

Surely such apparent discounting renders the thought of any fair pricing strategy by such retailers as nigh to  improbable. If, indeed, trust is an element in the transaction cycle, there is surely very little, if any at all, in such dealings. Why would any reasoned person even begin to believe that these operators support either the product or the buyer?

Loss leaders notwithstanding, generally, the cost of operations has to come from the selling revenue, as does the product landed cost and any margin of profit, without which operations would eventually grind to a halt. If these elements are all accounted for and such notable discounting is a regular feature, the question of integrity can not be far removed.

Under such conditions, it becomes very difficult to establish a supportable value or valuation method for these goods and that can be construed as a deliberate strategy that, in the end, renders the consumer vulnerable to all kinds of subtle and not so subtle manipulations. Just because we call it "business" doesn't absolve such activity from exercising integrity, fairness, honesty or any other label you want to put on it.

It is reasonable to expect minor differences in selling prices of the same product at competing locations. Many factors make up the pricing method and many factors vary from business to business. When "discounting" reaches levels above 50 or 60 percent, there's something going on that is probably not open knowledge and that makes pretty good reason to suspect the whole business right from the start.

While it may be hard to toe the line of fairness and reason, businesses that give in to the lure of quick and dirty profits offered by the temptation of such manipulative means do a disservice to the fair-minded segment of the business world, the trusting consumer and to themselves. In the long run, everybody looses something and nothing ever gets better.

Wednesday, October 31, 2012

what's a Politician to do?

In the calm after the figurative and literal storms, we have a rather surprising upset in what was up to now considered a "done deal" vote on policing in Port Hope. We have a long-time proponent of OPP services reversing his support to produce a status quo result.

My question is...Should a Politician vote her or his conscience or support the 'most vocal participants' in the discussion of an issue at hand? I say 'most vocal participants' because there are usually more than one or two sides to the issue and rarely is there a unanimous position. Mind you, 'most vocal participants' does not imply that it's a majority either; it only indicates a degree of interest. The only real majority is the "silent majority".

Politicians have no hope of knowing what the majority thinks because it's not a unified majority, being only a majority of number of qualified participants, who may or may not have an interest in or opinion on any of the many issues that face the politicians. The aggregate opinion is not definitive, only indicative. What is definitive, is the thought process of each politician on each issue.

My choice comes down in favour of voting one's conscience because it's always based on the same set of values, the ones that were presented at election time, hopefully. That way, you know what's important in the mind of the politician and what influences are brought to bear on each vote. If you're interested enough to be involved in any issue and you want your views considered, you can talk to every politician that has a vote and tell them of your concerns, trying to persuade the anti's to see your point before they commit.

For a politician to listen to the loudest voices is not as important as listening to the voices of real concern. By having a discussion with those voices, the issue becomes better defined and the better result can be realized. I think the loud voices are often lacking sufficient background information to see the full scope of the issue and optimum results; they are most often based on emotional factors that can sway significantly.

The policing issue in Port Hope is very complex, as it is everywhere else, and most ordinary folk have little comprehension of the underlying factors in how best to deliver ALL policing services that a community requires. The day-to-day cop in a cruiser vision of policing is what most of us think of but there is so much more involved. It's somewhat like the iceberg analogy.

The question that will now become the main one is cost. Once the emotion of local vs institution is settled, the cost will become the next battlefield and that's when the nitty-gritty of this decision will take its toll, with much repetition of "we told you so!" Let's see what the 'loudest voices' have to offer in this tug-o-war. One thing's for sure, they won't be anywhere as eager to support their local force with their wallets as with their words. It's going to get even more interesting from here on.

Saturday, October 13, 2012

here's a plan that could transform our Downtown into a bee-hive...

A couple of thoughts for consideration as part of tonight’s event at the ‘Park’.

First, I think Cobourg tourism should be considered as the by-product of economic
efforts as opposed to being “THE” economic effort. Retail opportunities ebb and flow
with great irregularity and are uncertain because of continuous expansions in the
periphery. Energies and resources would be better used to develop essential services
that bring with them continuous and repeat activity that is dependable in the
delivery of patrons day in and day out.

Second, our downtown needs to be the focus of the business life of the town. It
needs to be where the financial sector gathers, or assembles by way of locating in
close proximity to each other, making the trip into downtown a necessary and
worthwhile objective, and one that is repeated daily and often, and by a variety of
patrons. Tourism is a collection of impulse actions to roam and wander somewhat
aimlessly, with little specific purpose and a low level of economic certainty. It’s a
tentative economic producer, whereas financial activities are never-ending and
dependable stimulators. We have real physical opportunities to assemble a “one-stop
financial centre” in the downtown, and its patrons are a strong influence on
economic health overall. We CAN have our own Bay Street right in our downtown.
The employment opportunities would be an asset and reduce the dependence on
retail jobs that are considered to be of a lower economic benefit. There is a
perception that Cobourg is home to a monied community and that idea should be
fully explored for the opportunities it could offer, if it is a correct perception.
“Financial centres” create a palpable buzz in their immediate surroundings and are
home to some very active people, owners, operators and staff alike. We can see that
now in our financial group in the downtown. The competition in that sector makes
this idea of a ‘centre’ a very attractive one, because they can both feed off each
other’s activities and provide bigger potential customer bases to all. Healthy
competition enhances the potential for success.

Just for example, consider this 'vision'. The block containing Bank of Montreal and
The Bargain Store is presently one storey. It can be made into a 3-storey structure
without negatively impacting anything. The space presently occupied by The Bargain
Store would be subdivided into smaller year-round market-oriented shops to support
the Farmers’ market across the street for the summer months and continue to serve
that demand all year round. Local (downtown) residency could arguably become
much more attractive by the boost derived from the availability of fresh food all
year. The second floor would become a “financial centre” occupied by all the various
financial offices now spread throughout the town plus legal offices and even real
estate offices. Patrons would have a compelling reason to come into downtown as
would any visitors to that sector. Access would be off the second level of a fully
accessible 3-level parking facility (these patrons would almost exclusively arrive by
their own vehicles) between King and Covert Streets with elevators at both ends for
street-level access as well. The third floor above the financial mall would be home to
a good-quality restaurant with an outdoor ‘patio’ facing south, overlooking Victoria
Hall and the waterfront beyond. At present, the buildings to the east and west of this
space are both 3 floors. Access to the restaurant would be from the third level of
parking and from the street by the elevators that also service the financial mall. The
‘patio’ would be a year-round feature, enclosed for the winter months and open air
during the summer. Town Hall and Fire Hall theatres are across the street, while the
main street and all the other entertainment venues are within a short stroll, and
waterfront access is steps away. The north side of this parking facility would back
onto more commercial facilities that should be built on Covert Street, both sides of
which have potential that is being “wasted” now. Covert Street is one of the most
underutilized resources in the downtown and has the potential of almost doubling the
active commercial capacity we have now. We can’t create more space, but we can
recover what’s already there and not being used to its best potential.

The C.A.U.S.E. report that’s collecting dust has some good ideas in it and those need
to be reintroduced for this exercise. Unfortunately, talking about these things is just
about as far as it gets. The property owners have to be the point of ignition on this
and pretty well any other significant initiative for the downtown. Without their
commitment, little will actually come out of the exercise. An idea such as the one I
present above takes money and if there is the certainty of a return on such
investment on their part, it can be accomplished, with the blessing of the town. In so
many of these projects by the town, it states that consultation will be held with
various groups, including the “stakeholders”. So many of the property owners are
only that, rather than “actively involved stakeholders” who seem to be acting as if
they have no stake in anything other than property. We’re not looking at heritage
issues here because there are no heritage buildings involved in this idea. Looking at
the Scotia Bank building as a very real and physical example, this idea can actually
provide an excellent opportunity to recreate a more suitable addition to the street
scape than what we have now. As for the idea of bringing together like-businesses in
one convenient area, there is wisdom in being close to your competition and the
businesses involved are well aware of the benefits of being located close to each
other.

Recapping, no matter what the economy, ultimately, tourism is a “crapshoot”. Retail
is “uncertain and vulnerable” to too many factors. Steady repeat traffic with a
predictable purpose is the strongest base you can have on which to build a healthy
town core that’s not depending on the whims and vagueries of economic fluctuations
that seriously affect the viability of a tourism-based economy. Plans and processes
are just the 'whats and hows' but mean little if there's no action to carry them
through. All that’s actually needed is a “commitment” to act and a far-sighted plan
on which to carry out that action. If you sit back and really think about it, the idea
above is just one good example of such a plan.

Monday, September 24, 2012

Just what is "Downtown revitalization"?

It's hard to not dismiss this latest initiative by our Council as another bullet-point on their 4 year checklist that has limited chance of being fully implemented as a standalone project which will have any long-term impact on the Downtown. In my opinion, initiatives such as this focus on immediate concerns and short-term solutions rather than the systemic weaknesses that underlie the perpetual cycles of vitality and decline that are evident in so many smaller communities such as ours. In this era of 'meg-opolises' the raison-d'etre's of smaller communities are too volatile to sustain their steady existence and up and down cycles of prosperity are to be expected. It's a see-saw existence that comes from erratic patterns of development in residential, commercial and industrial sectors that wrestle to either keep pace with or catch up to each other in an endless game of leap-frog. This initiative may well be one of those leaps trying to jostle the downtown's position vis-a-vis the peripheral commercial growth brought on by recent reckless over-development. But, is the vitality of downtown such that it needs boosting or is it at some point in its natural cycle?

First of all, just what is it that needs revitalizing? How do we know it needs revitalizing? Why do we think it needs revitalizing? What has led us to this need? What happened to the last revitalization's initiatives and accomplishments? These are the questions that need answering before anything can proceed in the latest incarnation of a plan for the revitalization of downtown.

   “I am looking forward to working with the Downtown Revitalization Task Force, the community, Town staff and other key stakeholders and helping steer the process of enhancing Cobourg’s downtown to foster both short term and sustainable business growth.”
writes the newly hired Business Development Officer in his first press release.

  He says   "...foster both short term and sustainable business growth"
That's a pretty broad stroke and is a lot more general than it is specific in its objective. Generally, it's no secret that downtowns are hugely dependent on strong downtown residential populations which is in direct contrast to the fringe commercial districts that draw from much larger areas and are dependent on unrestricted mobility of consumers. Fostering growth is different from sustaining viability which I suspect is the goal, not more growth. However, if the new Officer's statement is accurate and fostering sustained business growth in the downtown is the goal, I question the objective from the outset. Sustained business growth requires ever-expanding markets, whether it be in physical size or consumer demand, or both. How does that translate in our downtown where there can be little physical growth and only marginal business growth? In my view, fostering an environment that sustains the viability of the existing business centre is the objective most likely to be achievable, especially given the level and variety of restrictions imposed by our heritage concerns. That objective needs to be an ongoing part of the town's economic policy, not just an occasional and temporary project for a cobbled-together focus group with a typically descriptive but impotent statement of objective.

This exercise of developing a strategy is what the town calls a 'first step' in the revitalization of Downtown Cobourg but what I call Cobourg's latest foray into "fixing" something that some think needs fixing, as evidenced by the statement
        “there is a lot of work to be done in the revitalization process and we are confident that Mr. Narraway will take a leadership role in driving this process forward."
The potential for getting mired in process as opposed to actually carrying out an action plan in its entirety is always a strong concern, having seen what happens in so many of these scenarios.

 I get stuck on what they think needs fixing. My question here is "What's the problem being addressed, what will be the end result, how will we recognize it, and does it solve the problem it is meant to resolve?"

As part of my election platform in 2010 I advocated for developing an environment of co-operation between neighbouring municipalities to present a much larger, more developed opportunity within which industry and business could establish and grow. This is in contrast to the spirit of "us, not them" competition that sought to claim new development for the benefit of individual municipalities.

        "Working with neighbouring communities and Northumberland County will add breadth to the scope of my role and allow for integration with larger initiatives, while ensuring alignment with Cobourg’s local strategies,” added Mr. Narraway.
 Judging by this comment, that thinking has taken on some life now. The only thing I don't see as a critical component is the "county" aspect. Our current county structure harkens back to an earlier time in the history of our economic basin. I don't think it has the significance it once did and therefore it should not be part of the definition of our economic basin as it develops today.
 If this is what they are talking about when they call for a revitalization of our downtown, it's actually far more than that and that needs to be made clear. Furthermore, if that is so, I have to ask what our Economic Development Department is up to these days. If I understand what is being planned, Economic Development has been asleep at the controls for some time, or just as bad, we're going to spend more money to duplicate what's already on the plate. Either way, it comes across as a stab at trying to do something, anything, to become relevant in the Province's economic planning process. Calling it a revitalization of downtown is either a con or an indication that nobody involved understands the issues they're trying to resolve.

Friday, April 27, 2012

Culture clash

As an engineering objective, cultural integration is unattainable, yet as a consequence, it is certainly unavoidable.

I'm guessing that governments want to achieve cultural integration for more than one or two reasons and money is surely one of them. Recently the Ontario provincial Liberals appeared to be toying with the adoption of some form of Sharia Law, but there's been nothing out in the open since the 'rumour' first surfaced. The laws of the land are a manifestation of that society's underpinnings so a major rework is both unlikely and unwise, yet the Libs tested the water anyway. How does the adoption of a system of laws so diametrically opposite to our current scale of values come under the qualification as an underpinning of our society as into what it has evolved?  Apr. 2011

Update - as of now, nothing more has been heard on this matter ... thankfully!

Revealing the pollsters' con, ...finally!

Alberta certainly made a mess of things ... for the pundits, the experts, the pollsters, the media and the voters themselves.

The results of this week's election set them all on their heads, and it's been overdue for a long, long time. We've devolved to the point where it was just blindly assumed that pollsters couldn't ever get it wrong, and the pundits, experts and media simply took their data and packaged it to suit their own marketing purposes.

For me, it re-enforced the belief that voters, no matter how much they chew and bitch about what's being done or not done during the time between elections, really are uninformed to the point that they have little or no idea of what they should and can do to change all that's behind their endless gripeing the rest of the time. When it comes right down to it, the moment of truth, when they make that single history-shaping mark in the voting booth or on their home computer, they almost always get cold feet - frozen feet - they lose their nerve and they do what they've always done, vote for what they're familiar with, what seems the safe bet. They vote for "I don't know the rest of them but I do recognize this name so it's the one I'll pick - what could be wrong with that? At least it won't be any worse that what we've got, and who knows, it might get better because they know I'm not satisfied with what they've do up to now."

yeah...right!

The public deserves every turd they get because they can't be bothered to pay attention any other time. The pollsters and media think that they pay attention to all the crap that's published and broadcast and that it somehow has an effect on the outcome but it's not that at all. It's fear... fear of something different that motivates and impacts their choice. It's that fear that makes them hesitate and repeat the familiar when the chips are down and the mark is made.

Maybe this Alberta "clipper" will see some big changes in how the pollsters and the politicians perform from now on; how they view the voter, and their connection with the process. Maybe it will humble them a bit and temper their practice of taking their expertise and influence for granted.

Tuesday, March 20, 2012

the Merry-go-round keeps turning to the same tune

One of the more repetative questions asked about politicians is why do they take the high ground when they're seeking the coveted seat of influence and power only to turn into the very thing they so loftily decry as outsiders once they get settled in that seat.

In one word, envy.

The lure of the grail makes for much righteousness because that's what gets you there. Everybody envies those that are nestled into a comfy political nook, their apparent affluence, influence, and even effluence, all those perks and bonuses, seemingly unlimited resources, friends in higher places, servants in lower places, and so on, while condemning their compromises on getting there. Then, once they sit their asses in those same comfy lounges, the compromises begin to look more like sacrifices, the influence becomes a burden, the perks become crumbs to be scavenged, pseudo-friends become adversaries and competitors for the very resources they all scramble to wrest from each other. In short, the old phrase "the grass is always greener on the other side of the house" becomes more than just a saying. And soon the realization is that "reality sucks" so they begin to reward themselves for all the hardships they now endure in their new positions of responsibility.

And once again we have it, the conversion, the evolution or devolution of a politician.The cycle begins anew as the newly anointed, newly arrived aspirants to the political arena prepare themselves to be voted into office to replace all those incumbent fat cats and crooks who are living off the goodwill of the taxpayer.

Its the same story with the same plot and same audience and only different characters to cheer on or turf out. The saddest thing about it is that every once in a while, when one of the newbies doesn't follow the script, the audience is overcome with suspicion and just to be safe, sends that one packing before any real changes get a foothold. After all, what would that do to us in the time between elections? We would have no idea how to deal with that, would we, we'd have to pay attention to know what's happening, wouldn't we?

As I've said before, idiots, we're idiots, and we don't deserve any better.

Thursday, March 15, 2012

worship...of a different sort

While I'm in the mood to talk about "stupidity", today the BIG event is a store opening.

People began lining up outside the hallowed gates to the promised land by 10 pm last night. The radio announcers couldn't speak clearly because of the drool running out of their mouths and brains.

What is it in these minds, those of the customers and promoters, that makes this a significant event in their lives? What do these people aspire to in their day to day living?

No wonder drugs are in such demand. Substance is trumped by momentary rushes of "contrived excitement" during the time between waking and falling into unconsciousness.

Is this an example of "stupidity" or just numbness? It's probably both.

Saturday, March 10, 2012

...the trouble with OUR politics

Canadian politics at both major levels are about 2 things - scandals and getting elected. Way down the list you find actual policy issues and running the 'FAMILY BUSINESS", that's the country or the province.

I guess running the "business" and improving things in general are either too mundane or too complicated for the average serf so we look for excitement to keep us at least somewhat engaged. Voila...scandals, real or imagined, makes no difference, but the more intrigue the more exciting and the more engagement.

The media knows it so they feed the monster what it wants, the pundits stoke the embers, the coffe-shop crowd chew on the tidbits, and Timbits, with little idea of the facts or the real issues. Such is the everyday political discourse among the masses. Give me juice and give me beheadings, and don't bother me with the boring stuff.

We love to complain. We're always willing to jump to conclusions that we base on rarely enough information to give us a fair idea of what's actually being proposed or even done. If we paid closer attention we might not have all that much to chew about so we ignore the important stuff that could get in the way of a good rant.

Calling for public inquiries is a popular hobby, but we rarely get the desired effect from them because they take too long and dig too deep, and most of the time just don't provide the satisfaction we expect from them. So, we look for the stuff we don't like and we beat it to a pulp before the facts actually come to light; it's far more exciting that way.

And it's stupid! More exciting but just stupid.

This is why governments treat us the way they do - we demand it of them and they're happy to oblige. Every election ends up restarting the same sit-com we know as politics, and we crave it. We're idiots through and through.

up next... why do we reject so much of what governments do? ...stay tuned...

....and we're back!

It's been a while since my last post, yet little has changed in the world I write about.

That's about to change; my interests have broadened so I'll have lots more to say from here on.

Politics - Provincial and Federal, both arenas are abuzz for various reasons, and with that comes plenty of commentary on other blogs. The thing I get twisted about is the tendency of blogs to take on a bent and see everything from a very narrow, purely partisan perspective, much to the detriment of free-wheeling discussion and interaction of opposing views. In effect, they tend to shout down any contrarian views to their own and that simply renders that blog useless as a discussion forum, and brands it as a "support group" for the originator(s). What the hell's the point in that?

Being a single snowflake in a mountain of snow means I'm pretty much writing to myself and won't be getting much back, BUT, that might change some day if I keep at it. One thing for sure, it won't happen if I do nothing, so here goes!

First off, the Federal political scene is pulsating with suggestions of scandal and controversies galore, BUT ...

.. on the other hand ...

Sunday, January 15, 2012

Today's 'Retailing' model may be approaching a catharsis of sorts



·         74.1% of all electronics are bought online,
·         74.0% of all music and videos are bought online,
·         67.8% of all office supplies are bought online,
·         65.9% of all clothing sales are bought online,
·         65.8% of all furniture sales are bought online,
·         61.4% of all games and toys are bought online.
And of course, being U.S. sales, we're talking some big numbers here. For instance, translated into dollars, the percentages above mean that people bought $8.4 billion worth of electronics online as opposed to $2.9 billion in store, and $13.6 billion worth of clothing online vs $7.0 billion in store.
To put this into a Canadian perspective, recall that all Canadian ecommerce was worth $15.3 billion in 2010. This Canadian Ecommerce By the Numbers Infographic from CreditCards Canada (prepared from information provided by Statistics Canada) gives the details on Canadians' online buying habits.

The state of Retailing today
Jan. 7, 2012
 
As most commonly practiced today, Retailing is moving towards an eventual collapse of that model.The world “manufacturing” engine (taken in a broader sense), runs at a production rate built on the need for profits, employment levels and revenue creation required to provide and sustain endless growth. Essentially, it has to keep producing at ever growing rates just to keep up. When the market is no longer hungry enough nor capable enough to absorb all the output produced to maintain that rate of production, the decline will rapidly recede through the entire production chain, right back to the harvesting of raw materials. Moreover, it’s no coincidence that management levels keep expanding while labour-intensive segments appear to keep shrinking. Declining output must carry ever-increasing costs of maintaining operations, creating output of decreasing intrinsic value but at increasing prices. As the need for associated labour declines, the essential resource, viable consumers of the production output also declines (as a percentage of consumer to output).  Add to that, the rising costs associated with selling or retailing that kind of output and you have a tipping point where it no longer sustains itself. Collapse is the default. Rather than into over-production, employment has to be channeled into producing non-consumptive output, actual assets and support mechanisms.

The presently most common Retail model is itself defective and self-destructive.

Retailing is not cheap, easy or a guaranteed successful venture. It can be profitable but often, in the long term, is not because the known final cost of sales has to be paid entirely by the buyer. That means the actual value of the purchase is diminished by the overhead costs which it must also bear. There are, in too many cases, some unknown costs, which, because of their nature, are omitted from the recovery process. Once discovered, they also become part of the burden that the buyer must bear, further affecting the demand and consumption.

Ours is a world that depends on selling and buying; we call it the “economy” and it now occupies third place in our daily dialogue, not far behind talk of wars and strife far away, in the neighbourhood and our homes , and of course sports, which seems to be an economy all on its own. The trouble with Retail is that it adds NO realizable value to the transaction, only costs, and thus raises the price of everything transacted by retail; a simple pass-through to whatever is being sold. Any additional costs are only a reduction of net value. I think that Retailing needs to re-evaluate itself and its role in the economy if it is to continue to serve a useful purpose, particularly one with actual value. For some insight, we just need to look at the food chain, and the AVOIDABLE costs that are borne entirely by the consumer. One day, that BUYER will rebel by refusing to buy anything at retail, especially bricks and mortar based, as we know it today.

The nature of Retailing today
Retailing, and its next-of-kin, Wholesaling, take a variety of approaches; I can think of brand-based, category-based, product-based, theme-based and volume-based. None of them are mutually exclusive and they all tend to overlap somewhere and to varying degrees, mostly due to a pursuit of more market exposure. Left to evolve along that trend, the eventual result would see all of Retail selling everything to the world market all the time. In that event, it is likely that the only difference among them would be “price”. We’re already beginning to see the emerging impact of this by watching the latest inhabitant in the retail jungle, the “On-line re-sellers”.

It’s easy to see that this model has its advantages for the buyer, but it also introduces some new problems and makes some disadvantages more significant. What it gives with one hand it seems to take away with the other. First off, you need internet access, and that can be more expensive than we realize when all the associated fees attributable to such communication costs are factored in. Then you have only 2-dimensional access to the products, depriving the buyer of all the other sensual aspects of choosing and deciding on a purchase. There are the strict limitations of payment methods and their inherent insecurities. First hand inspection and quality assurance are impossible, and time delay has its frustrations, and in many cases, transportation costs become a factor not previously a part of the overall common retail transaction cost.While it is a model that can reduce the base price, it does not guarantee a net reduction of the final transaction price. In the longer term, the tradeoffs may keep this model from gaining the upper hand, assuming it does not mitigate the negatives that exist now.

In today’s predominant Retail model, it’s pretty much indeterminable what the ratio of buyers to traffic would be in an overall perspective. The operational costs incurred by Retail are the result of servicing the total traffic at retail, not just the buying portion. Distributing that cost over all traffic reduces significantly the share per body served as compared to the share per transaction. As the business world inches more and more towards any number of user-pay models, Retail refuses to even look at the idea for fear of discouraging potential for sales. This is where the content of the sale comes into play.

As I said at the beginning, production is more sensitive to labour and sustainability pressures than to what the market can absorb indefinitely. We produce too much unnecessary output and force the market to deal with it. Dealing with those excesses wastes resources and increases costs in a number of ways (such as advertising, what I call ‘enticing’). Those costs become part of the buyer’s end costs, unnecessarily raising the price of every buyer’s transaction. This is not equitable because the buyer is paying for unwanted and unneeded product and for the cost of further enticement to buy yet more. Meanwhile, the non-buying traffic keeps adding to those costs being borne only by the buyers.

It seems reasonable to assume that lower prices overall will increase buying transactions, be they planned or spontaneous. Increasing transactions could be categorized as an economic stimulus. The real benefit comes when the price of necessary goods declines and the number of transactions increases as a result. Such stimulation in the economy can only be a benefit to all, and improve the true and realistic sustainability of the production and manufacturing engines.

As it operates now, Retail’s operational costs are borne exclusively by the buyer, the key resource on which the operation depends entirely for its income and derivative incomes. The more buyers, the lower the attributed operational cost per transaction; conversely, the fewer the buyers, the higher those per transaction cost attributions become and consequently adversely affect the final price for every transaction. That suggests that regardless of the traffic through an operation, the key number is the actual transactions.
This introduces the “rate of conversion” factor, turning traffic into buyer. Generally speaking, conversion requires additional resources to be employed, ie advertising, promotions, sales, etc., because non-buyers are being enticed to buy what they had no intention to buy at the outset or more of what they actually are buying. These additional resources must also be derived from the final sales revenues, which obviously reduces the net effect as well. Expending resources on conversion strategies does not provide a 100% return on those resources so there is yet more collateral drainage, and likely involves the principle of diminishing returns if too much is spent on that. Adding costs without adding value contributes to the eventual collapse.

The face of Retailing to come
BUT, what if the operational costs were distributed over the overall traffic as opposed to just the buying segment? What if the cost of operations were spread much thinner by distributing them over every single body through the retail door, thereby reducing the impact on the actual resulting transactions? The result would naturally be lower prices, lower transaction dollar values AND better value for the buyer, the most important piece in this process.

What if EVERY visitor through the door were to provide a share of the resources needed to pay the operating costs? As it is now, the more the buyer spends, the greater the contribution to the payment of operating costs. On the surface, this seems to me to be penalizing the most important resource, the buyer, and the penalty increases with the increase in the amount of the purchase, the higher that gets. Unless the margin calculations are applied in a reverse formula, where the lower the purchase, the higher the attribution of costs, (resulting in abnormal prices for minor transactions), this system forces the better buyers to contribute the lion’s share of the costs. This is surely not a preferred objective or outcome.

Costco has redirected some of its costs through its membership component and reduced the pricing of their products, thereby presumably increasing the number of transactions. However, their model requires that more product must be added to the transactions to compensate for lower margins, margins which were downsized because of the redirection of overhead now being addressed by membership revenue. (That’s strictly my analysis and conclusion.)

Retail has to stop making ONLY the Buyer pay for the operational costs, which is what happens when they include those costs ONLY in the sale. Not doing so will actually reward the buyer for purchasing instead of penalizing them for buying more of what they need and may want.

User-pay is a theme that’s popping up ever more frequently in reasonable and many unexpected places. It’s also being used to disassemble transactions into smaller components to render them less objectionable to the consumer, albeit making it more of a distraction than a reality. The present reality is still that ALL costs must be wrapped into the final transaction with the buyer. You can disguise them but you can’t avoid the costs.

Why doesn’t the “looker” pay their share? After all, the cost of providing the opportunity to “look” is very real, and in the present model, it’s paid for by the BUYER, not the “looker”. Marketing says that’s OK but economics says that’s fiscally wrong. Marketing claims success when it creates “traffic” but “traffic” simply adds costs. Conversion of that traffic also adds more costs. At present, all those costs have to be paid for by the end buyer. To me, that’s counter-productive; it can have the underlying effect of discouraging a purchase because of the inflationary affect on the transaction. Rather than penalize the decision to buy, Retail has to reward it. Marketing has to take responsibility for its cost and for its failures to convert by putting that cost directly on its own product, “traffic”. Marketing has to become self-sustaining, a free-standing component of Retail that covers its costs with its own revenue, rather than simply imposing (disguising) its costs in the seller/buyer transaction. Perhaps Marketing needs to provide “value” in its offering to the “looker” and show further “value” in the purchase for a realized double benefit to the buyer. That’s how Marketing can do the job it’s supposed to do. That’s how it will have to perform to stay relevant in the marketplace.

Ultimately the buyer has to reap the benefit of a transaction if there are going to be more transactions in the future. Heaping undeserved costs onto those transactions will have the opposite effect and will work towards the failure of the present Retail model. Today’s Retail model would be wise to find a way to fix itself before it falls flat on its face and finds itself relegated to the fringes of commerce.

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