Marketplace - Shop online till you drop

Episode Date: September 17, 2024

Since the COVID pandemic started, you’ve been shopping online more, right? Though consumer spending remained relatively stable over the past year, shopping at nonstore retailers (i.e., e-commerce) grew nearly 8%. We get it, it’s more convenient and safer, pandemic-wise. But how are brick-and-mortars adapting? Also in this episode: Corporate execs spout similar economic lingo, our electric grid’s got green energy shortcomings and rate cut anticipation raises homebuilders’ confidence.

Hi, I'm Kyle Rizdal, the host of How We Survive. It's a podcast from Marketplace. In 1986, before I was a journalist, I was flying for the Navy. Mr. Gorbachev, tear down this wall. It was the Cold War and my first deployments were intercepting Russian bombers. Today though, there's another threat out there, climate change. This could be the warmest year on record. Climate change is here.

Temperatures here are warming faster than anywhere on earth. And while the threat seems new, the Pentagon's been funding studies on climate change since the 1950s. I think we will put our troops and our forces at higher risk if we don't recognize the impact of climate change. This season, we go to the front lines of the climate crisis to see how the military is preparing for the threat. Listen to how we survive wherever you get your podcasts.

Hey, happy almost Fed Day, everybody. From American public media, This is Marketplace. In Los Angeles, I'm Tom Rizdo. It is Tuesday, today, the 17th of September. Good as always to have you along. This time tomorrow, the wait will be over. Money in this economy will almost certainly be cheaper. The only question really is how much cheaper.

As they started their two-day meeting this morning, the 12 voting members of the Federal Open Market Committee got their last official data point. Retail sales for August, a good stand-in for how consumers are feeling. Retail sales were up last month, just a tenth of a percent from July, but 2.1% from a year ago. Of note, though, spending online up 7.8% year on year. E-commerce has, of course, grown a lot, especially since the pandemic started, and as Marketplace's Samantha Fields reports to get us going,

there's still plenty of room for it to grow even more. I want you to take a second and guess, what percentage of all sales do you think are happening online these days? Okay, one more second and then I'm going to tell you. It's almost 20%, which is less than I would have guessed. But Gregory Dacco at EY says 20% is actually a lot, because there are some things you can't buy online. Got to buy that in person.

Even so, Arun Sundaram at CFRA Research says online sales are growing fast. E-commerce has been one of the few categories to show consistent growth since the pandemic began. In the early months of the pandemic, online sales spiked way up, largely out of necessity. Now? We're not seeing the same kind of growth that we saw in the initial days of the pandemic, but it's still there. And it shows that consumers want to shop online.

It shows that retailers are investing in their e-commerce business. It shows that consumers are also getting more tech savvy. It's also getting harder to distinguish between online and in-store purchases, says Mark Matthews at the National Retail Federation. That is because the growth in e-commerce we see these days tends to be in the blended commerce space. So it's buy online, pick up in store. It's curbside pickup.

And he says it's increasingly important for businesses to be doing it all. You need to be able to offer the consumer what they want, when they want, how they want it. I might buy the same thing one week. I buy it online and have it delivered to the house. The next week I might just go to the store. Whichever is more convenient. I'm Samantha Fields for Marketplace.

Gotta meet them where they are. Wall Street today, kind of a mixed bag as traders and all the rest of us wait for the Fed. We'll have the details when we do the numbers. There was another data point today that bodes well for the heretofore gloomy American housing market. Mortgage rates, as we've been telling you the past couple of weeks, have fallen quite a bit. 6.2% now on a 30-year fixed. And then this morning, the National Association of Home Builders shared with us its latest housing market index, basically how home builders are feeling.

They're feeling better, just a little bit better to be sure, but the good part is that the gain in the index reverses four straight months of declines. And it comes, of course, as the Fed contemplates an interest rate cut of indeterminate size. But as Marketplace's Elizabeth Troval reports, it is not all housing sunshine and light. Even in standout housing markets like you see in Florida and Texas, the headwinds have been a blow in. Chris Boleo is a home builder with the Greater Houston Builders Association. Chris Boleo Certainly things have been a bit depressed.

Loryn and buyers. But now, Bolio says, he sees a stabilized market ahead as monetary policy eases. It's going to make things a little bit more affordable. That sometimes that two tenths of a point or that half of a point in interest makes the difference between people being able to afford a mortgage and not. A Fed rate cut will also make it cheaper to build a home since financing costs are closely tied to short-term interest rates, says Stan Vannevarberg with Columbia University. Those financing costs of these homebuilders will fall as well, and some of those cost

savings will be passed through in the form of cheaper houses for homeowners. While builder enthusiasm may have rounded a corner, it's hard to be too optimistic, says Jessica Loutz with the National Association of Realtors. I think it's good to keep in mind that this is coming from an all-time low from this year. And also, this is the lowest marker that we've actually seen for any September dating back to 2012. And Robert Dietz with the National Association of Home Builders says even if the market picks up, there are lingering problems like high home prices.

And then on the on the supply side of the market, we think that there's a housing deficit of about a million and a half homes. He says labor force challenges, zoning laws and regulatory policies are still straining home builders. I'm Elizabeth Troval for Marketplace. challenges, zoning laws, and regulatory policies are still straining homebuilders. I'm Elizabeth Troval for Marketplace. The government, of course, releases various kinds of data on how the various sectors of this economy are doing. So too do industry groups. Just today already, we've talked about retail and housing, right? Publicly traded companies have to

release data as well. Earnings, expenses, financials, broadly. The Securities and Exchange Commission says they gotta. And generally, but not always, companies also hold what are known as earnings calls, where executives talk about those financial results. Those calls are, you'll not be surprised to hear, usually pretty dry, lots of lingo and insider terminology. But sometimes there is a word or two that stands out, in part because it's being used differently than you or I might use it, even if we were talking about business. Marketplace is Stephanie Hughes, has that one.

One word that pops up a lot on retailers' earnings calls is shrink, but used as a noun. Shrinks pretty much hit a plateau. We're pleased with the progress we're making on shrink. Shrink is a constant battle. It's work every day. Those are executives on recent calls for Ali's Bargain Outlet, Target, and Dollar General. Shrink is the retail industry term for inventory that's lost due to error or theft. So why don't they just say that instead?

Shrink is just shorter, right? It's more efficient. Kate Suzlava, an accounting professor at Bucknell, also says shrink just sounds nicer. Theft is definitely kind of hurts your hearing, right? Your ears like, oh, that's not a pleasant word. Suzlava says shrink as a euphemism makes something that's bad for business sound not so bad. These words are also a kind of shorthand, like another phrase that's cropped up on earnings calls in the past year, double click.

Instead of taking the time to say, let me provide you with more information on this one specific thing, executives will say, let's double click on this, using the practical language of technology as a way to discuss business. It's just fashionable, I think. It's sleek. Yeah. And you can say it in the amount of time it takes to do it. Sociolinguist Valerie Friedland says this kind of repurposing of words is pretty common.

Mostly because we have unmet needs in terms of either the sentiments that we want to capture or the vibes we want to give off or simply the thing we want to describe. Friedland wrote a book called Like Literally Dude, Arguing for the Good in Bad English. She says these kinds of words spread because we pick up new ways of speaking from other people. When we talk to each other, even strangers, we actually start to talk more alike. We mirror each other. How long does it take? So you and I have been speaking for maybe 15 minutes. Are we already like there?

We're already there. Yeah, it's pretty fast. But if we don't like each other, it won't happen. And in the aspirational business world, people are more likely to imitate those who've made it. Law professor Karen Woody at Washington and Lee says you can track this in the aspirational business world, people are more likely to imitate those who've made it. Law professor Karen Woody at Washington & Lee says you can track this in the spread of the phrase economic moat. The concept is in some ways coined by Warren Buffett. I don't know if that's exactly true, but he was the one who famously used it very frequently.

Billionaire investor Warren Buffett has been using moat for decades. Woody says it refers to a company's competitive advantage, keeping rivals at a distance. We're sort of protecting the company in the way that we would have a castle in medieval times. So people hear that term and I think they think of Warren Buffett and probably repeat that phrase often. That's why you might hear it on an earnings call, where the decision of what words to use is very deliberate.

They signal to investors how the company is doing and can affect the stock price. So there will be some discussion around what is the narrative. Corporate communications consultant Ann Taylor-Adams says once executives agree on a word that fits that narrative, they're likely to repeat it over and over again. When you land on a message, the more times that you say it, the more people just sort of absorb it and it becomes true. Executives also sometimes drive home a message with a little mild profanity, as in, it was a damn good year.

Again, accounting professor Anna Suzlava. It adds emotional aspect. It's not just reporting the results, but you want to emphasize something. People swear when they're frustrated or when they want their audience to pay extra attention, says sociolinguist Valerie Friedland. This is one way executives use words that mean exactly what you think they do. I'm Stephanie Hughes from Marketplace. Elizabeth Trova was talking about single family housing a minute ago.

Now we turn to multi-family housing. We're in the midst of a mini-series on this program looking at housing history. And so far we've told the stories of a lot of specific housing styles. The New Orleans Shotgun House, San Francisco's Painted Ladies, homes that are iconic in the city in which you find them. Marketplace World Headquarters is in Los Angeles. So we had to tackle another iconic but perhaps not a stylish home, the Dingbat apartment. Here's today's installment of Adventures in Housing History.

I'm Wendy Gilmartin. I'm an architect and a writer, and I live in Los Angeles. A Dingbat is a boxy apartment building. They were built in the 50s and 60s, primarily, very, very cheaply, very efficiently. There's two to three stories of living space above a parking garage. And they're built for a population of dwellers who each and every one of those people has a car. The Dingbat name comes from an architect named Francis Ventre. And Francis Ventre called them the Dingbat because of these graphic flourishes on the front facades of these buildings.

They're kind of kitschy. And what you'll find, for instance, might be a smattering of tile across the front or a name. Some of them have names. I lived in a dingbat in the 90s when I was early 20-something and it was lovely. It had a lot of nice daylight and it had nice wood floors. There was something really nice about the kind of social aspect to the dingbat that I lived in. You know, I had a writer neighbor

and I had a musician neighbor and I had an older Ukrainian immigrant grandma who lived next door to us. And it was a really nice cross-section of LA's working class. In 2014, then Mayor Eric Garcetti, at the time he initiated a seismic grading system for buildings in LA, and what came to light was that dingbats are especially vulnerable in seismic events. Many of the dingbats were retrofitted since the 2014 assessment, but overall they don't provide as many units as we need in the

city suffering from such a severe housing crisis. And they really are almost an obsolete character these days. The Dingbats certainly aren't the houses by Frank Lloyd Wright or Richard Noitra, the single-family home from the mid century that brought us all these qualities that you see every time you open up to all magazine. The Dingbats were housing for the working class and they were built cheaply out of stucco and sticks but they are a kind of easy simply made structure that covers all the bases for someone who needs a roof over their head and needs a place to park their car.

Wendy Gilmart, architect and writer based here in Los Angeles. This series, all of our series in point of fact only work with your help. Tell us about your adventure in housing. Marketplace.org slash adventure in housing is where you do that. Coming up. Kids clearly didn't really need special equipment to play. What they needed was to be less reliant on their parents to get outside. Well, yeah. First though, let's do the numbers.

Dow Industrial is off 15 points today, less than a tenth percent, $41,606 for the blue chips. The NASDAQ added 35 points, about two tenths percent, $17,628. The S&P 500 gained a point. We'll call that flat $56.34 there. The price of oil kind of sort of seems to be trending upward from a low last week West Texas intermediate of nearly two percent today, and that has put some gas in the tank of oil stocks. See what I did there? Chevron lit up 9 tenths percent. Exxon Mobile topped up 1 and 3 tenths percent today. Some regional banks got a boost after analysts

upgraded outlooks for New York Community Bancorp which toted up, totted up, totted up, totted up 5 and a tenth percent. Dime Community Bank shares increased 10 and a half percent today bonds fell yield on the tenured t-note rose to three point six four percent you're listening to marketplace hi this is Emily from Paxton Nebraska I live in a rural area where the written local news has been outsourced to a bigger city and the local newscast is not very good. I enjoy listening to Marketplace programs because they are informative and thought provoking. I learn about things, places and people that I would not have found anywhere else.

I am so grateful for Marketplace's dedication to bringing the news to the people. Join me in supporting Marketplace with a gift today. Go to marketplace.org slash donate and thank you. This is Marketplace. I'm Kyle Rizdal. There is a think tank over in Paris. It's called REN21, Renewable Energy Policy Network for the 21st century. If you want to know the long name. They said in a new report out today that green energy generation hit an all-time high last year. Renewables produced nearly a third of all the electricity used here on planet Earth.

That's the good news. The bad news is that there could have been even more, but the electrical grids we built decades ago just can't handle it. As Marketplace's Kelly Wells explains, adapting a 20th century grid to 21st century energy sources is actually pretty complicated. Kelly Welles The grid isn't just the transmission lines that crisscross the country. It's everything from the generating stations to the outlets in your house.

It handles energy from coal, gas-powered, and nuclear plants, all of which use the same basic technology to make power, says historian Julie Cohn, who wrote a book called The Grid, Biography of an American Technology. They're just something is hot and creating steam that's spinning a turbine. All of those turbines generate the same alternating current that the grid is designed to distribute. Solar power and wind power involve direct current. And it has to be converted into alternating current for it to operate and play well with the grid. We have devices called inverters that can do that, but they leave the grid with another problem, says electrical

and computer engineering professor Santiago Grijalva at Georgia Tech. Solar and wind are less predictable. Think of a calm cloudy day. If a renewable power source fails, those older turbine-based generators can make up the difference. So you have some time to ramp up other generators to respond to that disturbance. That hasn't been a huge problem yet because variable wind and solar energy is supplementing the stable sources. We still need better ways of storing solar and wind energy so we can use it on those calm, cloudy days. Then there's the fact that sometimes the grid doesn't go to the places where it's cheapest and easiest to

build solar energy installations," says Duke University fellow Tyler Norris. Tyler Norris, Duke University Fellow Here in North Carolina, a lot of the prime location for large-scale solar are on these old tobacco farms. KALIE WELLS NORA says the biggest challenge is coordinating all the states and cities and counties and utilities to invest and expand and update the grid at the same time. I'm Kalie Wells for Marketplace. The Congressional Budget Office tells us that federal spending on roads in 2022 totaled $52 billion.

Roads are obviously a necessary expenditure, being as they are the circulatory system of this economy. Who, though, are roads for? The obvious answer today is that they're for cars and for driving on. Once upon a time though, streets were for playing. Stephanie Murray had a piece in the Atlantic the other day. The headline was, what adults lost

when kids stopped playing in the streets? Stephanie, welcome to the program. Good to have you on. Thank you for having me. Tell me about these two moms in England that you start this piece with. Yeah, so Amy Rose and Alice Ferguson, they were friends. And I guess this was back in 2009. Their kids were kind of getting to the age where, based on their own experiences as children,

they would have expected them to kind of be out of the house more, playing with their friends, just sort of running around. But they weren't. They were inside a lot. So they decided to kind of run an experiment on their street where they applied to shut their road to traffic for an afternoon. And they specifically did not plan any activities or anything like that. They just wanted to see, you know, with time, space, and permission, what happens. And what happened is a bunch of kids poured into the street and had no problem, you know, playing, finding things to do, right? And it went really well.

Right. Of course it went really well because kids playing is kids playing, and that's good. I want to go to the subhead of this piece, though, and with the understanding that writers don't usually write their own headlines in subheads. In many ways, it says, a world built for cars has made life so much harder for grownups. Talk about that a little bit.

Yeah, absolutely. I think that one of the things that became really clear through the experiment was it sort of made the modern approach to play, where parents kind of shuttle their kids to activities, structured activities, playgrounds, play dates, that sort of thing, seemed sort of silly, I guess, because the kids clearly didn't really need special equipment to play.

What they needed was to be less reliant on their parents to get outside. The challenge here, of course, yes to everything you said, the challenge of course is that, you know, I live in suburban LA, it's a small little town, I grew up in an even smaller town and we played on the street all the time. But I'll tell you what, if my kids went out on the street that we live in today, this is a terrible thing to say, they would not last three minutes because people come blowing down there in their cars.

Yes, I mean, same here. Right. And so what do we do with that? Right because this is really a story and I'm gonna out you here as a as a former public Policy researcher as it says in your bio on this piece This is a story about built environment and infrastructure right because we are now built for cars Yeah, I think that that's you know, Amy Alice, they went on and they founded this organization where they help a bunch of other streets, neighborhoods throughout the UK set up their own play streets. But I think one other sort of long-term result that they found is that whether or not having these sort of play street sessions is enough to actually change the

culture of the street. So enough to actually change the culture of the street. So on some streets that are quieter, maybe they're not a through street. On those streets, having these regular play street sessions is enough to sort of change the culture of the street. Eventually everybody gets it. They're like, oh yeah, you just expect to see kids play. But on the street where this experiment originated, which is a very busy through street, it's not possible to do that.

Right. The other thing that's built, and this is something that's happened over, you know, decades in this country, is the parental attitude toward knowing where their kids are at all times and being uber cautious. And you know, I did things when I was a kid that you know if my kids tried them today I'd be like you are out of your mind you're not doing that. Well yeah and I mean in response to this piece a lot of people said oh yeah you know there were cars when I was a kid you know in the 70s and the 80s or whatever and and kids still did this right and first of all I mean even by the 70s and 80s children's street play had been drastically curtailed by cars compared to you know 50 years prior. But then on top of that, as traffic has become dominant and there are just more and more cars on the street,

you know, it has this sort of vicious cycle effect where it gets a little bit more dangerous and then parents don't let their kids out as much and then people don't expect to see the kids out there and it just sort of gets worse and worse such that, yeah, it's pretty dangerous in most busy areas to let your kids you know out into the street. Right and and just to put a punctuation mark on this as you said it took decades for this to become a thing where where kids playing in the street has been lost to cars in the streets it will take decades to change this back. Absolutely. Yeah absolutely. Stephanie Murray writing in the Atlantic about what happens when kids stop to change this back. Absolutely. Yeah. Absolutely. Stephanie Murray writing in The Atlantic about what happens

when kids stop playing in the street. Stephanie, thanks a lot. Appreciate your time. Nice piece. Yeah, thanks so much. ["The Daily Show Theme"] Enthusiast though I may be, it is fair to say I think that Federal Reserve press conferences have been kind of a snooze lately. Interest rates have been steady for more than a year, no suspense at all.

So you'll forgive us, I think, our excitement this particular Fed Day Eve. We're strongly committed to bringing inflation back down. Had no choice but to raise interest rates. I wish there were a painless way to do that. There isn't. But now conditions have changed. As the labor market has cooled, inflation has declined. What happens next? Find out on tomorrow's episode of the Federal Open Market Committee. Marketplace is Daniel Shin everybody. Maria Hollenhorst had the idea. Our digital and on-demand team includes Kerry Barber, Jordan Mangy, Dylan Mietten, and Janet Nguyen, Olga Oxman, Ellen Rolfes, Virginia K. Smith and Tony Wagner.

Francesca Levy is the Executive Director of Digital and On Demand. And I'm Kai Rizdal. We will see you tomorrow, everybody. This is APM. Hi, this is Phoebe in Honolulu, Hawaii. The economy shapes our lives and our This is APM. about drivers of our economy other than consumption. Join me in supporting Marketplace with a gift today. Go to marketplace.org slash donate.