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Thesis: For better or worse, many of the best companies today are built on convenience. Through this everlasting drive towards convenience, we’ve unfortunately created long-lasting economic consequences that will negatively impact our future.

If you haven’t read my Introduction to Economics, I’d highly recommend it before reading this article as some of the terminology associated with this subject may be difficult to understand.

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Economy of Convenience

In the early 2000s, customers would visit brick-and-mortar stores to purchase products when they were needed immediately. If they were to order online, the infrastructure was not in place, leaving order times to be weeks.

In these traditional economic models, businesses were in charge of deciding when and how consumers found and bought products.

Yet, shopping has changed tremendously over the past decade. Now, in today’s fast-paced, highly saturated market, consumers are empowered and in control. Consumers have grown to expect to be able to purchase and receive products when and where they prefer.

The rise of e-commerce, along with near-immediate ways of purchasing products online, has bolstered the convenience economy, giving consumers even more options for choosing how, when, and where they want to purchase products.

Many of today’s companies have experienced bolstered success by providing consumers convenience.

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McDonald's

What is McDonald’s main product (what do they sell)?

99% of people would say food.

That’s not actually what they sell.

McDonalds sells convenience.

Their business model is speed and simplicity. Their menu, ordering process, and food prep are designed for maximum speed and simplicity. Customers know exactly what to expect, which significantly minimizes the time and thought needed.

Their locations are strategically placed to ensure the most traffic from people who need convenient food. There are many McDonalds in every city, which increases the proximity and easy accessibility for many customers.

In addition, their drive-thrus increase this convenience as customers can order and receive their food without leaving their cards.

Offering affordable meal options further increases convenience as many customers don’t necessarily have to think about spending much money or time at each location.

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Roomba

Roomba has built an entire business through selling convenience.

Their product, robot vacuums, is extremely low effort. Users simply need to turn it on and it does the rest, automatically vacuuming floor areas through sensing technology.

This allows owners to maintain a clean floor with no energy themselves. Their technology frees up large amounts of time previously spent actively vacuuming, especially as the technology allows customers to schedule the cleaning to best work with their schedules.

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Uber

Uber has built up a massive network of customers and drivers by selling convenience.

Uber presents available drivers nearby almost instantly, providing consumers with convenient access to rides within minutes. Rides and payments happen automatically through the app, avoiding the inconvenience of physical cash or direct tipping.

Furthermore, Uber offers options from budget-friendly carpools to luxury vehicles, convenient choices for whatever ride experience consumers prefer for each situation.

For drivers, unlike taxis, anyone can tap into Uber’s network to drive and earn conveniently for a part-time income opportunity, customizable around an owner’s schedule and availability.

Trade-Offs

Considering that there are many benefits associated with convenience (which is why it is so popular for a business model), are there any trade-offs being made when we choose convenience?

For example, by choosing to watch a movie at home, you forego the experience that comes with watching the film at a movie theater.

There are some experiences people perceive to value very little, and that’s where companies providing convenience have thrived.

This brings us to the convenience-experience frontier:

All companies fit somewhere within the convenience experience frontier. It should be clear by now that, in all but a few industries, there will be a never-ending race to make life more convenient.

Lifestyle of Convenience

Convenience culture is all around us. We can’t escape it. Every moment we’re awake, convenience is there, trying to suck us in.

Yet, this lifestyle of convenience threatens key economic values.

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Jobs

As more businesses choose convenience, the amount of lower-skilled jobs is declining. Consider businesses switching to self-checkout kiosks, online customer service chatbots, etc., it all contributes to larger unemployment and a loss of income for many households.

Yet, convenience has helped jobs in other ways. Many jobs are becoming more flexible, able to be worked remotely or in a hybrid schedule, which allows more people the option to get the job.

Shift Away from Quality

To add more convenience to a product means sacrificing quality somewhere in the value chain.

For example, to produce a product quicker means sacrificing the build time and quality. This results in inferior products that need to be replaced more often.

Earlier in our production economy, products used to last extremely long. For example, the Nokia phone is often compared to a brick as it seems to survive everything.

Yet, products are now so inferior that they’re made to not last. The thought is that companies make more money when you keep coming back to purchase their products. Conversely, some brands have taken the opposite approach, building products that are made to last a lifetime and then charging a higher price.

Overconsumption

By providing more convenient access to products, consumers consume more. This doesn’t come for free.

A fundamental effect of this overconsumption is a reduction in the planet’s carrying capacity. Excessive unsustainable consumption will exceed the long-term carrying capacity of the environment and subsequent resource depletion, environmental degradation, and reduced ecosystem health.

In 2020, a study by Sean Fleming for the World Economic Forum explained that overconsumption is the biggest threat to sustainability. According to the study, a drastic lifestyle change is necessary to prevent further damage to our planet and society.

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Higher Debt

The convenience economy drives overconsumption. The ease of app-based services and one-click ordering makes overconsumption and overspending very easy.

Consumers have been taking on more and more debt to finance their overconsumption. This overspending has pushed many consumers into crippling debt.

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Decline of Local Small Businesses

As you can see from the chart above, from 2017 to 2022, the growth of overall small businesses in the United States grew around 12.1% in those 5 years. However, GDP grew 30.7% in that same time.

As all products can be more conveniently produced and consumed, the average consumer’s reliance on national chains and online retailers has increased dramatically. This has decreased the number of surviving local small businesses.

This effect was exacerbated through the Covid pandemic, as many small businesses were forced to close for good.

This decline in local small businesses has led to a loss of jobs, tax revenue, and economic resilience in local communities.

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Discouraging Entrepreneurship

Dominating platforms like Amazon make accessing goods and customers extremely convenient. This discourages entrepreneurs and crowds out newer, smaller-scale entrepreneurs and startups.

A lack of startups significantly decreases the overall innovation capabilities in the general economy and further worsens our ability to shake off this negative trend.

Though convenience may look enticing and has bolstered our economy to novel heights, the impact on our economic future is drastic and, even now, is beginning to show negative effects.

Anywho, that’s all for today.

-Drew Jackson