Convenience vs. Affordability, The Ethical Dilemmas of the World We Live In

“Time and again, when confronted with the choice between convenience and affordability and the less tangible benefits of emotional intimacy, humans have opted for the former.”

Let’s face it. Aside from living in a material world, we have succumbed to a life of leisure in lieu of exertion. We no longer get up to change the TV channel. We don’t manually roll down car windows anymore. We don’t open the freezer door to get ice. We live in a push button world. 

Mattresses no longer have to be turned every month. For most products we don’t have to trek to the store. Our exercise, instead, is to pick up the Internet or mail order package from the front porch or apartment lobby. 

The premise having been set, if not accepted, please contemplate the shared meaning of three articles I pass along for your edification. The first is from a philosopher, S. Matthew Liao. Writing an Op-Ed in The New York Times, Liao wondered aloud (if you can do so in print) if one has a moral duty to jettison one’s relationship with Facebook given its unconscionable and inexcusable behavior in the 2016 presidential elections and in other activities that have undermined democracy in America and abroad (https://nyti.ms/2zqSUx8). 

Aside from posting my blogs to Facebook, I have a financial interest in professor Liao’s opinion. My broker talked me into buying some Facebook stock shortly after it went public. Am I a silent sinner in the debasement of democratic values? 

It’s not every day, but hardly a week goes by that a box with a smiley face on the cardboard exterior doesn’t land on our front porch. I spent almost all of my journalism career in support of physical retail stores. Chain Store Age, by its very name, heralded my bias. Though the magazine covered mail order and Internet retailers, our first allegiance was to brick and mortar stores. 

When Amazon erupted on the scene, it was as an attack on book stores, most prominently exemplified by Barnes & Noble, B. Dalton Booksellers, Borders, Books-a-Million, Crown Books, to name but a handful.

Now, Amazon founder Jeff Bezos is ranked the wealthiest man in the world as his creation sells virtually all types of merchandise. And through Amazon Prime I download programs not available on cable or basic television stations.

With bigness comes inevitable vilification. From the Web news site Vox, here’s an article suggesting the time is ripe to cancel one’s Amazon Prime subscription (https://www.vox.com/platform/amp/the-goods/2018/11/26/18112769/amazon-prime-cancel).

Could I really give up watching the upcoming second season of The Marvelous Mrs. Maisel? Or pay for shipping on all those purchases? And what would become of all those UPS and FedEx, not to mention USPS, delivery men and women who rely on Amazon to keep them on the road? 

On the one hand, the Vox article correctly notes Amazon’s history of “monopolistic practices to tax avoidance, poor treatment of both white- and blue-collar workers, union-busting, environmental damage, and most recently, the year-long publicity stunt of HQ2, a bad-faith ploy to extract private data from US cities that ended with Amazon plopping its supposedly economy-boosting offices into the two most established markets on the East Coast.”

On the other hand, the history of retailing, and for that matter almost every industry, is that market leaders are attacked. As Sears in its heyday was, and then Walmart was and still is, Amazon is scrutinized for practices that virtually all other retailers undertake in their own spheres. Target might emit a nicer aura in which to shop, but it treats its workers no better than Walmart, or Amazon. 

So I swallow any bile I might have toward Amazon and continue to log on. As long as I’m getting value for my dollar, I will continue to do so.

The third article presents in stark terms perhaps the penultimate consequence of society’s acceptance of the depreciating value of human labor. From Vox, here’s an article that asks, “Sex doll brothels are now a thing. What will happen to real-life sex workers?” (https://www.vox.com/the-goods/2018/11/26/18113019/sex-doll-brothels-legal-sex-work?_gl=1*13fjbq5*)

Returning to the opening quote taken from the sex doll article, here’s an added line to it: “Time and again, when confronted with the choice between convenience and affordability and the less tangible benefits of emotional intimacy, humans have opted for the former. There’s no reason to think that the sex industry will prove the exception to the rule.”

And to think, just a few short paragraphs ago I was worried about the future of truck drivers!

From Proudest Moment to Saddest, the Saga of Toys "R" Us Founder Charles Lazarus

With the liquidation bankruptcy filing of Toys “R” Us, the era of the category killer store may be said to be over. Toys “R” Us was the original category killer chain that overwhelmed small specialty and large general merchandise stores by offering a supermarket-style presentation of wide and deep assortments of sharply priced category specific merchandise. 

To be sure, a few category killers remain—Best Buy, Dick’s Sporting Goods, Bed Bath & Beyond, and even the struggling Barnes & Noble, to name several. But the graveyard list of category killers is much larger. An incomplete list would include Child World, Lionel Leisure, KB Toys, Circuit City, Crazy Eddie, Sports Authority, Oshman’s Sporting Goods, Linens ’n Things.

When Toys “R” Us began in 1948, if you wanted toys, or an appliance or housewares item—virtually anything—you would go downtown to a department store. There were no suburban department stores back then. There were no suburban shopping centers. 

Charles Lazarus used $4,000 to transform his father’s Washington, DC, bicycle shop into a juvenile furniture store. After customers kept asking for toys, Lazarus quickly evolved his merchandise mix to focus on toys. 

He believed staunchly in regimental uniformity. All business decisions–which products to carry, merchandising and store layout–emanated from headquarters. “I should be able to close my eyes and walk 130 feet and put my hand down and touch the very same stack of items in each store. If not, there’s something wrong,” he used to say. 

Lazarus was an early believer in the power of point of sale data. He partnered with suppliers, accepting early inventory deliveries and sharing sales data in return for discounts and assurances that Toys “R” Us would be kept in stock on the most wanted toys. The chain’s wide and deep inventory position became a strategic advantage when desperate parents and grandparents scavenged for the most wanted present during the holiday season. In stock leadership, not price, cemented the company’s position as the go-to retailer for toys. 

This advantage started to dissipate in the late 1980s as Walmart and Target refined their POS data systems. They concentrated on the hottest toys, selling them at discounted prices. They had more stores than Toys “R” Us. Shoppers visited them more often. They siphoned off sales in buckets, not drips and drabs. 

If you needed a specific toy, the place to go no longer was Toys “R” Us. In the age of the Internet, you searched on line, Amazon most likely.

With the advent of electronic games, computers and hand-held devices, traditional toys began losing their cache among children. Toys “R” Us added video games to its assortment, but one didn’t need to visit a store to upload apps to a hand-held device.

The real dagger to the heart of Toys “R” Us and other retailers, however, has been the greedy tentacles of private equity fund managers. They swooped in to ostensibly rescue retailers, offering cash secured against a retailer’s real estate. Some merchants had lagged because they could not compete against more streamlined, better financed competitors. Some were unable to cope with changing market conditions. Some just had inadequate management. It mattered not to the equity funds. They reaped their profits upfront from the leveraged buyout transaction, from interest payments on the debt it provided and, hopefully, from taking a retailer public if its profitability improved. 

Ever since Charles Lazarus retired from his creation in 1994, Toys “R” Us has lacked an energetic, bold merchant at the helm. Profits lagged. The equity funds offered money. But at a highly leveraged  price. Executives with no proprietary interest in a company, other than to maximize their personal returns, usually succumb to the siren song of a deep-pocketed equity fund. Bain Capital and Kohlberg Kravis Roberts, along with Vornado Realty Trust, loaded Toys “R” Us with $5 billion in debt in a 2005 leveraged buyout. 

The downward sales spiral kept Toys “R” Us from paying off the debt and, ominously, from upgrading its stores and systems. All that’s left now is to sell off its real estate. 

Charles Lazarus is now 94. The last time I saw him was about 15 years ago as I was leaving work. He was window shopping a store located on the ground floor level of the Park Avenue office building housing Chain Store Age. We exchanged pleasantries but even then, a decade removed from active Toys “R” Us management, he resisted talking about the company he founded. 

He always was a reluctant interview (see http://nosocksneededanymore.blogspot.com/2017/09/toys-r-us-bankruptcy-brings-back.html). I cannot imagine what must now be gripping his emotions. 

His proudest moment, he used to say, was paying off the creditor debt Toys “R” Us assumed when its then-parent company, Interstate Stores, dragged it into Chapter 11 bankruptcy reorganization in 1974. Other Chapter 11 filings have occurred, none under his watch. 

On Thursday, management filed for Chapter 7 liquidation. The same market forces that will silence Lazarus’ once ubiquitous airwaves jingle—“I don’t wanna grow up, I’m a Toys “R” Us kid …,”—are sure to wreak havoc among remaining category killer stores. For some, if not all, it is just a matter of time before they share a similar fate.