Wednesday, December 08, 2004

The self-service economy - your home as a warehouse | The self-service economy
SO YOU want to withdraw cash from your bank account? Do it yourself. Want to install a broadband internet connection? Do it yourself. Need a boarding card issued for your flight? Do it yourself. Thanks to the proliferation of websites, kiosks and automated phone systems, you can also track packages, manage your finances, switch phone tariffs, organise your own holiday (juggling offers from different websites), and select your own theatre seats while buying tickets. These are all tasks that used to involve human interaction. But now they have been subsumed into the self-service economy...

This September 2004 article described the number of ways that service roles have become self-service. Today, as we struggled to find mittens for our kids, I realized something else had been outsourced to us -- inventory management. The modern home is a warehouse.

I see this mostly with clothing. Children's clothes are dirt cheap now, but supply is as unpredictable as quality. One day there's a deluge of small mittens. Another day it's socks. Another day hats. Then large mittens. One cannot go to the store FOR an item. One must conduct store surveillance, purchasing items of interest.

The clothing supply chain behaves as though it has no inventory.

So where's the inventory? In the home. Suburban homes of middle class Americans are pretty large, with lots of storage space. When Walmart has size M mittens, the avid shopper can buy twenty or thirty pairs. That would last us ... a week. Ok, so it's a season for most people.

It makes sense. No-one wants to hold inventory any more. It's expensive and risky. Far better to slash prices, and transfer the inventory burden to the consumer.

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