Desperate Shoppers

I know that the Internet gets blamed for all sorts of things, but don't you think a bit of the blame for the recent shopping debacles goes to the Internet?

In order to compete with the aggressive prices available online, real-world merchants have to be wily marketers. The launch of the Sony PlayStation 3 on November 17 may go down in history as the day shopping turned into a contact sport. People lined up and camped out at major retailers. The retailers had way too few units in stock to meet the demand.

A few days later, on Black Friday, hordes of shoppers gathered outside of Macy's in New York to catch the sales. One New York Times reporter called it Black and Blue Friday as bargain hunters fought their way into the store to collect limited quantities of door prizes.

Retailers are trying to compete against online stores that are open 24/7 and can offer extremely aggressive prices. They've got no bricks-and-mortar overhead (a.k.a. storefront rent), often have inexpensive warehousing to keep their inventory, and are able to set up shop in locations where the tax laws are incredibly favorable. They often have fewer salaries to pay.

The cost savings translates to great online bargains and puts pressure on real-world retailers to stay competitive, even though they have more overhead. The best weapon that malls and discount retailers have is to lure you into the store with the promise of some fabulous deal and then hope for the impulse buy. The by-product is a scene where shopping becomes a guerilla activity.

A few years ago, when online shopping was still fairly nascent, a moratorium on taxes unique to the Internet was passed, which left online vendors able to create a helter-skelter system, depending on where they are and where they're shipping to. Nolo has a good summary of the ways Internet sites can, and often do, avoid collecting state taxes. You can also track the ongoing process of sorting the mess out at E-Fairness, a coalition working to create parity between online and real-world retailers that advocates a simplified sales tax system.

What do you think? Has the Internet and its ability to let us shop for the lowest price imaginable on anything turned us into shopping pugilists? In New York, we love to say that "when the going gets tough, the tough go shopping," but who knew how literal "tough" would become?

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Lines Forming for PlayStation 3