November 29, 2010 | permalink
Today is “Cyber Monday,” one of the busiest online shopping days of the year (although surprisingly not #1, for reasons I’ll explain below). In honor of the dubious “holiday,” Esquire tells of the story of the National Trade Federation executives who created it from whole cloth:
And so, in the summer of 2005, in the nondescript offices of a nondescript trade organization: a name. Blue Monday? Not enough cheer. Green Monday? Too hippie. Black Monday? Too confusing. “Cyber Monday,” then, would be a simple new holiday, a necessary one, to meet the demands of a WiFi-enabled gifting populus – but also something complex, less marketing myth than evolutionary consumerism, more Wikipedia than Hallmark.Five years later, the NRF and its Website, Shop.org, expects 106 million Americans to shop today, including more than half of all office workers in America. Nine out of ten e-tailers are offering Cyber Monday deals.
That’s on top of the eye-popping numbers posted over the weekend; according to The New York Times” “About 33.6 percent of weekend shoppers bought online, which, according to the federation’s study, is the highest percentage ever.” Online sales on Thanksgiving rose 33 percent over a year earlier, while Black Friday sales were up 15.9 percent according to IBM. Meanwhile, ComScore said online retail had already increased 13 percent in the first 26 days of November versus a year ago, to $11.64 billion. After several years of plateauing growth, it appears e-commerce is back and bigger than ever.
Anyone who started their holiday shopping early on Thursday should have given thanks not for Amazon’s patent on one-click shopping, but for FedEx, UPS and the immense hubs they’ve constructed in Memphis and Louisville, respectively (along with Indianapolis, Newark, Oakland, Ft. Worth, and Greensboro, not to mention Paris, Shanghai and Guangzhou) to process the tens of millions of packages those purchases represent. And those hubs, in turn, have attracted the country’s biggest e-tailers to set up gigantic distribution centers in their footprint, whether it’s Technicolor (which handles half the DVDs sold in America from its Memphis warehouse) or Amazon or Zappos (which runs a single, million-sq. ft. hangar south of Louisville). These are the cities shipping and handling built—what you get when you have to pump billions of dollars worth of online purchases through real, physical space—and they are the real miracles of e-commerce, not one-click.
How can I be sure? Because even as the Esquire story concludes that Cyber Monday might someday triumph over Black Friday as the biggest shopping day of the year, it acknowledges that Cyber Monday is not even the busiest online shopping day of the year. The crescendo of the holiday online shopping season is typically the Monday or Tuesday before Christmas—the cutoff for guaranteed shipping in time for the holiday. From Chapter 2 of Aerotropolis:
Speed has put the squeeze on retailers. E-commerce didn’t exist in 1995, but the first wave of e-tailers collectively racked up $7 billion in sales four years later. It was $155 billion in 2009, and it may top $250 billion a few years from now. An entire galaxy of one- click shopping has been summoned into existence, with Amazon poised to become the next generation Walmart in the eyes of Wall Street. A recent study by four economists at the University of Chicago found that Amazon and e-commerce have crushed small and midsize booksellers (along with travel agents and auto dealerships) as prices fell and bigger, more effi cient retailers got even bigger.
Two billion boxes land on our doorsteps each year, three- fourths of which have been sent either overnight or second- day air. E-commerce (and why call it that? Isn’t it just “commerce” by now?) at present accounts for 7 percent of all retail spending. Half of all Americans are online shoppers, spending an average of $1,006 per year. Jeff Bezos’s original prediction that it would eventually account for 15 percent of a multitrillion- dollar industry is well within reach.
What the Internet added to the retail equation wasn’t long tails and thoughtful comparison shopping, but the acceleration of impulse. Our increasing comfort with our digital selves– composed of Google searches, Facebook friends, YouTube clips, and tweets– awoke a belief in us that physical atoms should always move at the same light speed as our digital bits. The real breakthrough was our collective acclimation to this new degree of speed. Having settled into the fast lane, slowing down for even a second is viscerally painful, no matter what our speedometer actually says. As counterintuitive as it sounds, the best thing that ever happened to overnight mail was being made halfway obsolescent by e-mail. Our desperate struggle to accelerate everything else to the same velocity has only made us more dependent on its fastest physical analogue. And so our impulse purchases are increasingly accompanied by the equally impulsive selection of next- day air for just a few dollars more. And if our impulse was wrong we return the item on the seller’s dime.
The aerotropoli around Memphis and Louisville were created by those dollars. These are the cities “shipping and handling” built. In the business, those dollars are referred to as “value added,” an accounting term describing the money to be made from touching goods and improving them at the right time in the right place. Memphis and Louisville are where, in the United States at least, goods are tenderly massaged. These are cities made of hubs, one for each industry, or maybe more.
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Greg Lindsay is a generalist, urbanist, futurist, and speaker. He is a non-resident senior fellow of the Arizona State University Threatcasting Lab, a non-resident senior fellow of MIT’s Future Urban Collectives Lab, and a non-resident senior fellow of the Atlantic Council’s Scowcroft Strategy Initiative. He was the founding chief communications officer of Climate Alpha and remains a senior advisor. Previously, he was an urban tech fellow at Cornell Tech’s Jacobs Institute, where he explored the implications of AI and augmented reality at urban scale.
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