The “Amazon Effect” In San Francisco

AmazonI like I like it a lot, but there’s problems with that which I noticed the other day when I was driving around in San Francisco. I saw quite a few street merchants who had closed up shop here. No sign that they had moved. They just emptied out the place and left.

I remembered the places that were there and have come to call this The Amazon Effect. It’s not really all Amazon’s fault, but they do what they do very well, probably better than most other online retailers. Buying online today is easy. The tech company [which I am now a previous employee of] would buy everything through Amazon and Amazon Prime Now. I had a bad headache one day and I can’t take aspirin so I asked the girl who handles purchasing if there was any Tylenol around. She told me, If I don’t find you within an hour check back with me and I’ll have some Tylenol for you.

She didn’t tell me to walk up to the local drug store which I could have done. I didn’t even think about where it was coming from, but I happened to be upstairs and in walks a guy from Amazon Prime Now and delivered a bottle of 250 Tylenol which she handed over to me.

How pray tell, does a local store that I could have easily walked to and got what I need deal with that when someone can just pulled their smartphone and with a couple of taps get it delivered right to them within an hour? They can’t. This is what I am calling [again] The Amazon Effect. Technology has made it so easy to order and return merchandise no matter how big or how small that there’s no point to have to leave your house. Amazon is the biggest culprit in my mind, but there are also brick and mortar retailers with a large online presence that are undercutting local merchants such as Walmart, Target and Costco. They will deliver items purchased online free or at a very modest delivery fee if they have local drivers.

This is creating a problem with local merchants in San Francisco. It’s probably happening all over the place, but in San Francisco where rent to live is already high, it’s high for business owners as well. If you have to be rich to live in San Francisco, rich people will still need to buy things and that’s what stores are for. If there’s no stores then people will have to turn to their computers instead of going out shopping anymore.

I’ve noticed that there seem to be lots of people, in particular millennials who have no problem buying their groceries online instead of going to the store. For me, I personally want to be the one who looks at my meat and produce and decide if I want this apple or that apple. I don’t want a worker who’s paid minimum wage in a city that’s too expensive to live in and probably doesn’t care too much other than filling the orders quickly to pick my food for me.

Big chain stores can easily survive this because sometimes you just want a pair of socks, not a pair of socks knitted by a fair trade paid Guatemalan single mother struggling. But chain stores has special rules in San Francisco so you have to have a car to get to most of them because they’re outside the City. It’s a noble idea, but I can’t spend $20 on a pair of socks. Smaller family owned businesses like your corner stores that you can run to when you forgot something are hit the most. They can’t compete on price unless they’re selling booze or cigarettes and even on those products their markup is pretty small.

Restaurants are hit as well, but San Francisco has the most restaurants in the nation and with a limited amount of food ideas there’s only so many ways you can serve a burger, burrito or Asian food. Restaurants aren’t as affected by Amazon because tech has allowed them to cook and deliver food through all of the food delivery tech companies so they don’t need drivers, but if you’ve got a ton of the same type of restaurants too close to each other then they all are kind of screwed.

I unfortunately don’t have an answer for this problem unless the City can offer incentives to these smaller businesses like they are to the big tech companies. Sometimes it seems that those who think San Francisco isn’t what it used to be are blaming the people coming here without thinking the fact that San Francisco is changing because of the businesses we’re losing.

Oh well, I guess I’ll go get a Starbuck’s Latte.