TCS Daily

Another Postrel Moment

By Glenn Harlan Reynolds - September 15, 2004 12:00 AM

I'm a big fan of Virginia Postrel's work, not least because it seems to resonate with things that happen in my everyday life. Now I notice that her latest New York Times column seems to have eerily predicted a weekend shopping expedition with my daughter.

I've bought my daughter, who's nine, a lot of shoes at big discount places: Target, Kohl's, Shoe Warehouse. When she was little, that was fine. Now that she's older, it's harder to find shoes that she likes, and that will fit, and hard to keep her size straight. So on Saturday I went to Coffin's Shoes, a venerable Knoxville outfit that's been selling shoes the old-fashioned way since the 1920s. A friendly salesman, who had obviously been doing his job for quite a while, measured her feet, listened to her talk about what she liked, had her try on a couple of shoes made on different-shaped "lasts" to get an idea of what she found comfortable, and then disappeared into the back, reemerging with a stack of shoes for her to try.

After about half an hour of individual attention, we departed with two new pairs of shoes that she pronounced "the best shoes ever." And, she reported, they were comfortable.

Of course, they cost more than it would have cost to buy shoes -- even the same shoes, if that had been possible -- at Target. But we wouldn't have gotten the service.

Now comes Virginia's column in the New York Times, where she notes that Americans are consuming more services and relatively fewer goods:

"Listen to the economic debate carefully, and you might get the idea that the problem with the economy is that Americans just are not materialistic enough.

"We spend too much of our income on restaurant meals, entertainment, travel and health care and not enough on refrigerators, ball bearings, blue jeans and cars.

"Manufacturing employment is sluggish because of rising productivity -- making more with fewer people -- and foreign competition. But that's not the whole story, especially over the long term. Production is changing, but so is consumption.

"As incomes go up, Americans spend a greater proportion on intangibles and relatively less on goods. One result is more new jobs in hotels, health clubs and hospitals, and fewer in factories.

"In 1959, Americans spent about 40 percent of their incomes on services, compared with 58 percent in 2000. That figure understates the trend, because in many cases goods and services come bundled together."

And, in fact, that's what I was really buying at the shoe store: Goods and services bundled together. At places like Target, they're unbundled -- you get goods, but not much in the way of service. I bought the shoes at an old-fashioned shoe store, and in the process I paid extra for the service, and I got my money's worth.

I've already noted (again following Virginia) that people are often substituting services for goods now. But that's only part of the story. There's more to this than simply spending money on massage therapists instead of more TV sets. As people get richer, and goods get cheaper, and consumers become more interested in the total buying experience (all things that Virginia documents) it may be that the appeal of Big Box stores -- whose approach consists of giving you far less service in exchange for lower prices -- may decline, and the appeal of old-fashioned specialty stores, where the salespeople know their products, and their customers, may come back.

If people want a "dining experience" more than they want a cheap meal -- and as Virginia notes, nowadays they often do -- then they're likely to want a shopping experience, not just cheap shoes. And, as with the restaurants, they'll be willing to pay to get it. This won't mean the end of Big Box discounters any more than it the desire for dining experiences has meant the end of Fast Food. But I think it may mean the re-appearance of a kind of shopping -- and the kinds of jobs -- that some people thought the Big Boxes were going to end forever.


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