Cost of Convenience, Can We Gauge it Properly?
Updated: May 29, 2020
If there was any doubt in prioritizing a customer convenience, this pandemic has clarified that. Most of the businesses have learned it the hard way. If they do not have an infrastructure to deliver your services and products at the consumer location, they are on the verge of becoming irrelevant. Thanks to lockdown, even those loyal customers who strictly bought local products, were forced to turn to global chains like Amazon, Walmart, Costco.
Why were the big chains not affected, or even some of them thrived in the global crisis? Why were small local stores forced to shut down?
The reason was simple; they quickly adjusted to the customer requirements and government regulations. They profited more in these crisis times as new customers joined their services.
Talking numbers, the average Prime member (who has already spent US$100 on the membership) spends on Amazon is $1400, and non-prime member is $600. Now one can argue that people have shifted their regular shopping online, so this cannot be an additional expense. Still, we are taking business away from the local shops and probably running them into the ground for our convenience.
The unfortunate news about our favorite restaurants, closing down after decades of operations, are surfacing every other day. We immediately blame the COVID pandemic and the lack of government support during the shutdown. But the fact is, we consumers have very much contributed to their demise. In the survey done by The Ascent, our average monthly spending on food is 13%. Out of which, around 6% is on outside food. With the delivery services like Uber Eats, DoorDash, that number is increasing every year.
If you do not know the business model for these food delivery services, you might think you are helping your local restaurants. But these services charge anywhere between 25–30% of the retail price as commission. They also restrict the restaurants to inflate the prices online to remain competitive. These commissions are a death sentence to a small and stand-alone establishment. These small restaurants HAVE to use online delivery services because we consumers want our food at home.
Let’s take an example — I order a small coffee from a local restaurant. Without even checking the total bill, I tap on my phone and voila! In fifteen minutes, I am drinking my coffee on my couch in my pajamas. Let’s break down a bill. I have paid $9 for the coffee vs. $3 if I would have walked one block to get the coffee myself.
These extra costs quickly add up, and the study shows that the average person spends on these services can add up to $70000 in our lifetime — That’s one year salary for an average person.
Now the argument is I paid three times the money, so someone earned more than they would have. Yes, but that someone is not a low margin small business, but a software company that charges multiple fees for your convenience. The restaurant which would have made $2 has now made only $1 due to hefty commissions it has paid to the food delivery service provider.
These newly formed human traits of tapping on the phone to get things done saves our time. It would be justified if we were investing this extra time in productive work. But most of us use to binge-watch new TV shows in record time like there is an award for it. Ten years down the line, our achievements would be the number of shows we have watched, which will have added no value in our lives or our communities. This convenience is costing us our quality to hustle and work hard to achieve something in life.
Every few years, there is a new tech platform that goes viral, and billions of us use it. We get so used to these platforms’ services that our consumption can be easily qualified as addiction. Be it a mindless scrolling on Facebook, or watching stories and pictures on Instagram. In my opinion, the worst of its creating fifteen-second videos on TikTok which require hours to create. I am not sure, yet, about the nature of return by spending our energy and time making these videos. Long gone are the days when the first thing you did in the morning was to greet your family. Now we look for our phone, half asleep, and check for notifications on social platforms. This addiction of ours is worthy of label — modern slavery.
We have started living a significant part of our lives virtually. With the pandemic forcing us, we have taken more things online. The curiosity, the anxiety, the excitement of meeting someone in person is quickly vanishing. Human growth is dependent on his or her trait to go outside the comfort zone. With the virtual world, our comfort zone is reducing to our chair and our computer, tablet, or phone.
The convenience is part of our lifestyle from the times we started community living. We do not need a primitive lifestyle. The whole purpose of community living depends on someone else to provide something for you. But who will define the line where this convenience is costing us money, development and annihilating a less capable in the process.