June 8, 2011

Larger scale of online shopping prevents evolution of tastes

Do you remember when stores used to sell things? If you wanted some thing, you went to a store that carried things like that, browsed around, and either found the thing you wanted or moved on to another store. Now stores don't carry anything because everything must be sold online to reduce the costs of bla bla bla, but don't worry because those savings are passed along to the consumer.

The one good thing about online shopping is that if you already know more or less what you want, you can find it. With all the junk that the innumerable online sellers offer, it's there somewhere.

But what about the things you want but don't know about yet because they're outside of what you normally look at? You can't find those online because you can't type them into Google or the search bar of eBay or any online seller. You have to have them presented to you while you're browsing around, you inspect this or that thing, one might strike your fancy, and you decide to gamble on it. Sometimes it turns out to be a dud, but other times you strike gold by serendipity.

The online shopping world does the exact opposite of laying out a wide variety of things to browse: it either asks you for a specific target, or suggests things that are similar to your target, similar to previous items you've bought, or that people with similar tastes to yours have bought. This just narrows the range of products that you see into tinier and tinier slices. Pretty soon your Amazon and Netflix suggestions are all stuck in the region of the book and movie world where you started, and your music suggestions from Pandora are running circles around a handful of proto-post-psycho-core-adelic bands.

What's missing is the process of random mutation that fuels the working of adaptation by natural selection. Yes, most of these deviations from your existing store of songs or books or whatever will turn out to be failures (from your point of view). However, all it takes is a few successful mutations to take your appreciation of music, books, coffees, etc., in exciting new directions.

Previously these random suggestions were made by radio stations or MTV playing a variety of music instead of taking requests from you personally, by record stores and book stores stocking a wide range of albums and books, and so on. Also back when people were more social, your friends, acquaintances, or even the workers at these stores would randomly suggest things to you -- "Hey kid, have you seen Taxi Driver yet? May not be totally your kind of movie, but you should still try it out."

Why can't online sellers do this? Well, there's just too much damn stuff on offer. In a video rental store, or the movie section of a larger retailer, there might be at most a couple hundred movies to choose from. That's not so hard to browse. Netflix offers over 100,000 titles -- impossible to browse. And because of diminishing marginal returns, a lot of those extra movies that Netflix carries are unwatchable (for you anyway), whereas the video store will stock better movies on average if they have a lot more limited space to hold them in. The same goes for iTunes, Amazon, and the others, compared to Tower Records, Barnes & Noble, etc. With their selections too bloated to allow browsing, they have all converged on the idea of tunneling based on the customer's initial tastes.

The industry that's really getting slammed here is the booksellers. Most people go to Barnes & Noble for the browsing experience that reveals to them books that they want but would never have thought of, lying as they do outside their normal tastes. But then they turn around and leave the store without buying anything, only to go on Amazon and get them there. There is no clearer demonstration of what brick-and-mortar and online sellers are good at. Unfortunately if people keep that up, the stores will go out of business and they will have no more source of random mutations to take their cultural experiences somewhere unfamiliar yet rewarding.

We're supposed to live in an era of broader appreciation of what the world has to offer because economies of scale make it easier to offer millions of books online than in stores. But the result has been just the opposite, where the tunneling algorithms designed to cope with the bewildering array of titles trim the customer's tastes into an ever-narrowing band of the spectrum.

Obviously the solution is to rely mostly on brick-and-mortar stores whose smaller selection you can fruitfully browse, turning to online sellers only for rare things that you know you'll never find in stores. Even those can usually be ordered by the record store, book store, etc., and more cheaply because they have connections with mass distributors. I never have and probably never will buy a CD online because it'll work its way into my local used record store, or they can have it transferred from another site that does have it, or special-order it for me at no extra cost (no shipping either) because they can aggregate all customers' special orders into a bulk shipment and save a ton on shipping charges per customer or per item.

Few people do this, though, either because they just don't realize how stultified they're setting their experiences up to be, or because they do get it but are just too cheap to buy from a store rather than use them as a source for ideas and then have the online sellers compete over price. And when the stores are no longer there to provide new ideas? "Well, I'll have enough books and whatever by then, so I'll make out OK."

As for the former group who don't realize what they're setting in motion, I don't believe in the power of the free market, consumer choice, etc etc to correct these moves in the wrong direction -- not anytime soon, that is. Genetic selection has not made human beings good at relying on a carby, starchy, sugary diet, even though we've been practicing agriculture for nearly 10,000 years in some places. When we confront challenges that we are not at all adapted to, whether sugar in every one of our food items (even bread has corn syrup now) or online sellers with millions of items to rummage through, we can persist in maladaptive behavior for quite awhile.

I wouldn't be averse to some kind of protectionism for stores -- not particular stores, which would still compete amongst themselves as they did before, but just stores rather than online sellers. Or perhaps a heavier sales tax on mass-market or other common things sold online, to move it more in the direction of rare and niche things not available in real life. Ideally this would be done locally, at the city or state level, so that a variety of approaches could be tried out. Then the country could sort itself into places where the residents place less value on trial-and-error learning, and those where they place more value. In the former, people's tastes will never broaden, but what they do buy will be cheaper. In the latter, people are willing to pay the higher prices caused by protectionism in order to live richer lives.


  1. I just want to be clear on what retail areas you're concerned about. Art (primarily music & literature) and fashion, or all areas?

    I was an early adopter of online shopping and have done the majority there for years now. A few points from an "expert" on the subject:

    - While it will pain me when it happens, I agree that online retailers should charge sales tax. The lack of tax is the primary advantage Amazon and other non-brick and mortar stores have over everyone else. When that change occurs, I will still do a lot of research online, but finding products locally will be of greater importance.

    - In some areas (see my first question), what you fear may be true, but for myself, online shopping has expanded my horizons greatly. Recent example: I was interested in lump charcoal over briquette, but I was unhappy with the available offerings from the likes of Lowe's and Gander Mountain - yes, I walked into those stores. Online research led me to a handful of superior brands I otherwise would not have known about. Shipping proved cost prohibitive, so further research revealed an obscure local hardware store that is a distributor of one brand. Bingo! I just used online shopping to support a local business. Counter example: As an avid camper/hiker, I have found that local stores carry about 1/100th of available items, and generally overcharge by 20% or more on premium products. Online shopping provides access to so much more variety for things I don't have to touch and feel. Ratings, reviews, forum discussions, etc. all provide the confidence I need for technical product purchases (the same is true for electronics, tools, etc.)

    - You may be correct about music, so I won't comment there. Movie selection, on the other hand, at least through Netflix, has actually expanded for me and everyone I know who uses the service. The traditional outlets - cable channels, pay-per-view, and rental stores - all provided a very narrowly focused window. While the "movies you may like" may not necessarily dip into completely different genres, a boat-load more foreign, Indy, and otherwise obscure films hit my radar than ever would have before - and I actually watch some of them. The average user can certainly sit back and only select "new releases", "viewers top picks", "most popular", etc.; and how would that be any different than normal movie viewing patterns from the masses? But, for a great many people, Netflix offers opportunity to go beyond the norm.

    - Even I still go to the book store to buy books. Maybe I'm a dying breed, but I have to look at a cover, read the teaser synopsis, and check out a few pages. I like going through the aisles and spending time looking at new authors. The way books stores will lose me is if they continue to forget the advantage they have. I'm getting increasingly frustrated by B&N because I'll find whole shelves dedicated to one popular author, or 20 copies of one book even, rather than using that space to display a wider selection. I'm in that store specifically to have choice, not to have it reduced. It won't take much more to tip me over to hunting through Listmania and using Amazon's search services.

    - In some cases, online stores help make things from brick-and-mortar stores accessible. A specific example: I have an odd preferred jeans size (29-30/33-34). While I can go through the mall to find out general style and fit, ultimately I have to go to a store's website to find out if the size I need can be ordered there. Notice that I still rely on touching and feeling to make my fashion choices. I don't think you'll ever move the masses from that sentiment.

  2. This covers anything where the amount of stuff to sift through online is hundreds or thousands of times as large as it would be in real life.

    The charcoal thing doesn't sound like it would fall under this.

    What else besides information-based things? Clothes, like you mentioned. Most of the home stuff that Target would sell (bath towels, sheets, etc.). Furniture -- big stuff is hard to sell online, but littler things are hard to find in real life now.

    Netflix may put more foreign / indie movies on your radar, but you were probably the type of person who would've browsed the foreign or indie / "cult" sections in the rental / retail store and given one of them a chance.

    It could be selection bias, but that's how it is with most people I hear talking about foreign / indie / documentary movies from Netflix -- they're the target audience. You wonder how much the average customer watches them, or is even made aware of them.

    Shoot, even for classic movies. You'd be surprised how many people under age ... 25 or 30 haven't seen Dirty Harry. That would definitely be outside their current tastes because vigilante cop movies aren't made anymore (Taken is not a community-defense movie). They don't see that because they're too busy tunneling.

    Awhile back, a commenter (I forget who) said that he had never heard a full song by Prince! Talk about tunneling.

  3. You have me curious now. I'm going to have to start polling my new group of less-educated, young adult friends [Army] (and I don't mean that disparagingly, it's just simple fact that they are primarily high school or community college educated) to see where their movie wanderings take them. That's the best contrast that I can find to my regular group of friends. I'd like to know if the Netflix algorithms shield them from choice based on previous selections.

    Hah, if the commenter was listening to the radio before 2000, then he/she had to have heard "1999". Also, I know I've heard "Pussy Control" at clubs. There are half a dozen other Prince songs that people might not realize they've heard before: clubs/strip clubs - "Get Off", "Sexy M.F.", "I Wanna Melt with U", "Hot Thing", "Cream" elsewhere - "Kiss" (probably covered), and I can't speak to when I've actually heard the rest of these recently, but it seems like they would pop up from time to time due to marketing usefulness: "Let's Go Crazy", "U Got The Look", and "Diamonds And Pearls".

    Slightly off topic, but relevant to many of your other posts: The 2010 movie "Easy A" directly references and shows clips from "Breakfast Club", "Say Anything", "Can't Buy Me Love", "Ferris Bueller's Day Off", and "Sixteen Candles". I was jaw on the floor taken aback that a movie clearly targeting a younger and more feminine demographic than me would pull those references. It was interesting that the resolution of the movie actually involved reenacting the marquee scenes from "Can't Buy Me Love" and "Say Anything". It was telling that the writers had to go back to the 80's to pull decent scenes. I wonder if those movies have received any extra viewing from teenage girls, or if the whole thing just went past them?

  4. My pandora station plays stuff from a lot of different genres, though I might be happier if it just stayed in a full on rawk groove.

    I still haven't seen Dirty Harry. I also use Bittorrent instead of Netflix since I don't watch movies that often. I rarely shop online (basically just when I'm buying gifts) because there's not much I want and I'm easily satisfied.

  5. it is also true regarding online shopping..


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