Black Friday
Last week (and early this week) we rung in the start of America’s big shopping season. In honor of our shameless obsession with material acquisition, let’s look at how financialization has made the act of buying things we want much, much worse.
Voice Assistants
Years ago, Amazon released the Echo, a home speaker designed to be used with its Alexa personal assistant. The idea was that if people used Amazon’s home speakers they’d be more likely to buy things on Amazon. It was a personal project of Jeff Bezos himself, sure he could convince an entire country to alter its shopping habits.
Now, six years on, it turns out Alexa and the Echo did little to change consumer behavior, and in fact the unit was losing billions of dollars a year:
By 2018, the division was already a money pit. That year, The New York Times reported that it lost roughly $5 billion. This year, an employee familiar with the hardware team said, the company is on pace to lose about $10 billion on Alexa and other devices.
Despite Amazon’s certainty everyone would be shouting their toilet paper orders at a home speaker, Alexa’s user base has now fallen behind Apple and Google’s voice assistants, and most Alexa searches are mundane - the weather, turning things on and off, etc. Even in third place, Alexa has tens of millions of users who may be left adrift as the company eliminates staffing and product support. Who will listen to their private conversations now?
Amazon, the company allegedly so laser-focused on data and efficiency, allowed its Alexa team to blow an eleven figure hole in the company’s budget years after it became clear people do not want to replace trips to the store - or logging on a website - with a conversation between them and an LED hockey puck on the kitchen counter.
Concert Tickets
We’d be remiss if we didn’t talk a little about Ticketmaster, the country’s largest events cartel. Despite having a monopoly over most major concert tours and presumably access to cloud computing and competent software engineers, the company was overwhelmed by demand for Taylor Swift’s long-anticipated concert tour. An estimated fourteen million fans tried to get tickets and despite this being a modest number of concurrent users for a technology company, Ticketmaster’s systems were unable to cope. Not to worry though, scalpers got their hands on plenty of tickets and can now resell them at a wild profit, which Ticketmaster will likely reap a significant amount of through its secondhand marketplace.
As if it weren’t bad enough jumping through the various hoops to acquire Tay tix, Ticketmaster used a demand pricing system that is probably technically illegal. This method of open fan wealth extraction may become the norm for popular concert tours if Ticketmaster isn’t reined in by the government - Bruce Springsteen has defended its use on his upcoming tour.
The problem artists face is Ticketmaster’s merger with Live Nation means they’re forced to sell tickets through the company because it also owns the venues. It’s very on brand for America that going to a concert is no longer a choice between supporting an evil corporate monopoly or a cadre of scummy ticket scalpers but an expensive mash-up of both.
Cars
Remember Carvana? If you’re like me and you live a few blocks from one of their ridiculous car elevators you are reminded on a daily basis that at one point the company was worth tens of billions of dollars and, for some reason, a Wall Street darling. The idea was they’d buy your car - sometimes over Blue Book value - and take it on a flatbed and stick it in a sky tower and then sell it for a profit?
Except it was basically a financial arbitrage play, mostly owned by the father-son car dealer duo who founded it, and apparently they spent so much money on advertising and overhead that now, despite used cars still being very expensive, the company is nearly insolvent.
We have talked before about car dealers, their power in local governments and communities, and the toxic politics of America’s reactionary petit bourgeoisie. Turns out, when you try to turn the very lucrative business model of simply paving a parking lot to fill with high-margin vehicles into a nationwide online dealer and brokerage you create so much additional overhead and so many supply chain problems you can lose billions of dollars doing it. Who knew!
Deliveries
When it became clear supply chains weren’t going to collapse this fall, some predicted online shopping would be a beneficiary. But it turns out people enjoyed shopping in stores, and much of the post-lockdown retail bounce has boosted brick and mortar stores. However, since companies are not good at planning or predicting shopper behavior despite decades of data, many chains have vastly overstocked inventory and are forced to offer deep discounts to try and unload the extra goods.
Delivery companies - Amazon chief among them - are struggling mightily this holiday season. Typically non-union carriers like FedEx will hire more seasonal help to make sure packages get delivered, but the company is already furloughing workers due to decreased demand. Amazon meanwhile is scrambling to cut costs as Wall Street analysts beat up its share price, which means closing warehouses and slicing its delivery services to the bone.
We’d become used to speedy delivery from the e-commerce giants, but said delivery was not profitable - Amazon quietly cut back its two-day Prime delivery this year. When packages do get delivered theft has become a problem - even before the pandemic an estimated million packages a day were stolen in the US.
So for those who still wish to shop online rather than in a Target trying to sell you all its overstock - too bad! Your experience will likely be as bad or worse than it was two years ago.
Short Cons
POLITICO - “One of the biggest conservative dark money organizations in the nation was boosted last year by two separate anonymous gifts, each totaling more than $425 million dollars.”
AP - “Several current and former board members on one of Florida’s largest homeowners associations have been charged with stealing more than $2 million of residents’ money.”
Billboard - “TikTok, which has built a thriving business based largely on users syncing videos to music, pays “almost nothing,” according to one music distribution executive.”
Bloomberg - “Farage is a “great salesman and a great deal of what he says is helpful to people,” he said. “But this isn’t the right portfolio for the current situation, principally because its chock-a-block with UK assets. And that’s not a great place to put your money these days.””
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