Is the epochal rise of online retailing cause for concern or optimism? Well, both, and in different measures, depending on your interest.
Consumers want decent choice, attractive prices and reliable, accountable merchants. Consumers, on balance, are aided on all these fronts by the internet: choice is abundant, prices are transparent, and sellers and buyers are open to public disgrace and laws should they behave poorly. There are dangers online, but the benefits dwarf the security risks.
Shareholders want returns on their financial risks. Long-time shareholders are concerned by the fall in the market valuation of the companies in which they have invested. The well-documented travails of department store Myer – whose chief executive has been pushed out in recent days amid concerns about the company’s viability – is an example. The company’s shares are trading at not a lot more than a 10th of the price they fetched when Myer floated on the sharemarket almost a decade ago. Of course, prescient punters on surging online retailers are doing well.
Many traditional retailers are existentially concerned. Their primacy is being assailed by competitors with far lower costs. In just a few decades, online pioneer Amazon, which recently launched an assault on the $26 billion Australian retail market, has become one of the world’s biggest companies. When Amazon fully opened for business here, the chairman of Woolworths, the nation’s biggest retailer, made a veiled threat to suppliers that they should consider the consequences of selling through the online behemoth. Australians have already shifted a lot of their shopping online – 65 per cent shop online, with four in 10 making an online purchase at least once a month. Online turnover has been growing at double-digit rates.
Workers want job security and satisfaction, and reasonable wages. Retailing is still a massive source of jobs but will decline relatively. Technology is, as ever, destroying many tedious jobs, but a far greater number are being created in burgeoning, rewarding areas including social services and aged care, as well as in creative industries.