How much longer can the costs keep going up? The numbers tell the story. Colleges cost $500m a year; most of the graduates will never be able to pay that back, and starting your life with that kind of debt, and the interest the government collects on each loan, is oppressive. The rents don’t compute with salaries. Basic needs are skyrocketing. The divide between the haves and have-nots has become a growing abyss. Look around, and you can start to see the cracks. The worst part is that we are all getting a glimpse of how government runs things, and it’s insanely disturbing.
Small signs everywhere show the economy is shifting, and some of the biggest names in retail are feeling it first. Luxury brands are rethinking how many stores they really need. Starbucks just announced a huge round of closings. Acme has shuttered a few locations too. These aren’t small, struggling shops. These are household names, and they’re pulling back, and I believe we will see more after the fourth quarter.
When the luxury closings come, and they will, they’ll leave a massive mess in their wake. Nowhere will feel it more than the smaller destination towns that have come to depend on them. We all know how grim it is because COVID did a number on us with its own set of closures. What if all the big brands just close up and leave, and pay out the lease? Many of the secondary towns- not necessarily Madison Avenue- will be a strip of endless empty storefronts and expensive real estate that no one can afford to fill. It will be very interesting to see what happens to those places, and who steps in, if anyone, to force market change. Zohran, whether you like him or not, is at least trying to create a more equitable city.
On the other hand, there’s AI. For years, big companies have charged the same premium prices for their services: lawyers, advertising agencies, consultants, cable, all the costly expertise that businesses were told they couldn’t live without. Each of these businesses wants to do what it does: give advice and write documents, create new campaigns, and let you connect to content. But as a small business owner, or even just as a consumer, you can now look at a lot of those bills and say, “You know what? I don’t need to pay for that anymore.” Work that used to require an expensive firm can increasingly be done faster, cheaper, and in-house. That’s a massive shift, and it’s already happening.
Put those two trends together, and you get something remarkable: the power is moving back to where it always should have been, in the hands of the consumer. Consumers are deciding which stores deserve to stay open. They’re deciding which services are worth paying for. They’re choosing with their wallets, and they have more options than ever.
So here’s my advice to every business, big or small, including our own: listen to the consumer. Listen to what they’re telling you. Watch what they actually do. Because they’re the ones holding the cards now. Everything is about to change. The businesses that pay attention will be the ones still standing when it does.
