Requiem

This passage from Joan Didion’s latest novel, Blue Nights, recounts a touching moment in her youth. She describes her first naïve and perhaps misguided impulses as an adoptive mother, eagerly planning to take her newborn on assignment with her in 1966 to Saigon. It strikes a nostalgic chord for those of us old enough to remember the real Pan Am, though not because of any lingering brand loyalty to the airline (as opposed to the recent TV show), to Porthault linens from Paris (our family was more likely to find theirs at JC Penney’s) or to Le Cercle Sportif (which, it turns out, was a rather exclusive, French, colonial sporting club in Saigon). Instead, the passage strikes a chord of nostalgia for branding itself and for a time when slinging a blue vinyl Pan Am bag over your shoulder meant one thing: you worked for an international airline.

A 2011 book review of Blue Nights noted Didion’s long-standing literary tendency to “litter” her fiction with brand names.¹ Such a tendency jumps out in this decade and not, say, in the 1970’s when Play It As It Lays, Didion’s breakout novel, blithely tossed about le dernier cri. This is because the nature of branding and its relevance to the consumer has undergone a paradigm shift. While research and brand testing were important in Didion’s “youth culture” youth, the flow of consumer identity was unequivocally from producer to consumer. While it’s not exactly news that branding has changed in the era of social media, ad designers now counsel their clients that the relationship between a brand and the consumer has completely inverted, such that to be successful in an age of over-choice a brand is no longer about the company that makes it nor a quest to project attributes onto consumers in need of definition. Advertising must now “emerge” from a community of users “seeded” by “influencers” to whom products are sent for social broadcasting.

The effective reversal in the flow of consumer identity raises questions about the flow of the physical goods themselves and the attendant “consumer urbanism” that marks cities where goods are received, stored, distributed and sold. If we can now speak of “classical consumer urbanism” as the link between consumer culture and urbanism, it might go something like this: consumer appetites are whetted via advertising. Advertising itself is consumed in developed economies in which family and social identities have been broken, leaving a void into which advertisers leap with the promise of new, consumer-based identities. Creating an identity is as simple as choosing a product and buying it.

“Rational actor” theories of economics have traditionally and accurately circumscribed the behaviors of consumers in an economy of growth based on rising consumption. Anomalies of morally or otherwise altruistically-driven consumption were utterly eclipsed by good old-fashioned Marxist exchange-values and status-based decision-making. In order to enhance the fantasy and feed the appetite, labor is jettisoned from the entire culture, figuratively and literally, by outsourcing overseas. These classical advertising strategies have led to horizontally-integrated shipping, which allows goods to be produced overseas and consumed at home, with lower prices due to the efficiency of containerization and just-in-time inventory and distribution methods. Consumer urbanism thus unpacks itself in three distinct areas of analysis: location and impact of the manufacturing base; networks of horizontally integrated distribution; and physical territories of consumption. The impact on urban areas of shipping infrastructure alone has been a kind of “Silent Spring” of trucks, freeways, containers, trains, rail corridors, pollution, boats, ports, warehouses and the many other appurtenances of the consumer-post-industrial complex.²

But what happens to cities if this flow is reversed? If identity no longer flows in a direct line from producers to consumers, will goods continue to flow, Mississippi-like, from producers to consumers through deeply engraved urban corridors? We are in the midst of a dynamic shift in consumer habits, the contours of which are little more than a shimmering corona behind the dark orb of our extant consumer societies. In an effort to discern the corona’s potential impact on urban infrastructure, let us examine, for a moment, two current tendencies in retailing, both quite different from one another on the surface: fair trade and fast fashion.

The explosive growth of fair trade throughout the Great Recession—global sales grew by 24%, with consumers spending an estimated 4.3 billion euros on fair trade products in 2010³—has been an utter conundrum for neo-classical economic theory. At the World International Studies Committee (WISC) Conference in Porto, Portugal, in 2011, the argument was made that the theories of Thorstein Veblen, a pre-neo-classical economist, when combined with current social constructivist theories of the global market economy, illustrate a possible explanation of the success of fair trade. The basic argument made was that “global market relations are ultimately social relations.”⁴ In other words, consumers are making decisions based not only on classical theories of perceived utility and resource scarcity, but also as a means of socio-political expression, such that the market itself has become “the arena for collective political action.” Veblen included in his theories the idea that the “interdependence of instincts” either reinforces or suppresses consumer choices and depends on a changing constellation of social interactions.⁵ A modern example of socially interdependent constellations of consumer behaviors can be found in social media, which has become a new platform for influencing consumer behavior. For example, launched in March of 2010, the social networking site Pinterest, in January of this year reached more than 10 million unique U.S. users, making it the fastest site to do so in history.⁶

From the cultural moral imperative of the fair trade consumer to the socially connected pinners, consumer behavior is undergoing a reversal, if not in the reality of its historic antecedents, then in the economic theories that will guide advertisers and hence the producers and shippers of the goods that feed what is increasingly a kind of chimera flickering at the diffuse end of the supply chain.

It is not an understatement to say that advertising and branding are experiencing a conceptual upheaval the likes of which have not been seen since the Sears Catalogue first thumped onto farmers’ doorsteps in 1888, the same decade that saw the American economy officially convert from one of production, so successful that it produced more than it needed, to an economy of rising consumption, in which advertising suddenly assumed a critical role in supporting the balance of supply and demand. Today, social media has simply created a new paradigm, because, “what’s a corporate giant to do when no one wants to follow it on Twitter or be its friend on Facebook?”⁷ For example, Ford Motor Company gave 100 social media influencers a free Ford Fiesta with the sole caveat to “lifecast” their experiences with the car. Bloggers could report both positive and negative experiences. By the time the Fiesta hit the U.S. market, it had 60% brand recognition, an unheard of feat for only $5 million in advertising.⁸ Other social media experts have noted that a company’s brand no longer represents the company; it represents the consumer and is a projection of collective identities that find one another through social factors that may or may not include consumer behavior. The brand is an emotional proposition that matters more than ever because consumers have submerged “rational actor” behavior in the face of over-choice and clutter.⁹

So what might the future of goods movement and subsequently consumer urbanism look like if the present day consumer is transforming from a branded beast into a rogue herd of crowd-sourced influencers? Some insight might be derived from the world’s largest fashion retailer, Inditex, based in A Coruña, Spain. Its largest brand is the “fast fashion” giant, Zara. What is utterly unique and surprising about Inditex’s success is that its retail branding and trend-spotting model is already a bricks and mortar, crowd-sourcing operation. While other fashion firms have their clothes made in China, which is cheap, managing a long supply chain is not. Instead of managing a long, ethnically, geographically and economically diverse supply chain, Inditex sources just over half of its products from Spain, Portugal and Morocco. While labor costs are higher in those countries, Inditex can react quickly to new trends through its Zara retail locations to see what customers are actually buying and charge a higher price due to the timely, high demand for the merchandise.¹⁰ Each store’s sales staff is trained to ask customers questions about the style, color and cut of the clothes they are trying on and transmit this information back to the company’s headquarters on a daily basis in a kind of continuous, customer-feedback tweet.

Conventional shipping is horizontally integrated. This means that containers are standardized and manufacturers outsource shipping to third-party shippers such as Maersk, with an international fleet of 500 container ships, or Evergreen, with a fleet of 160 ships. Before the rise of containerization in the 70s and 80s, retailers relied on a vertically integrated supply chain that coordinated manufacturing, shipping, retailing and delivery. Inditex, it turns out, is both the past and present of a nearly vertically integrated supply chain, in which one entity tightly controls the entire supply chain, just as retailers and wholesalers once did before the era of containerization. Interestingly, fair trade suffers disproportionately from the complexity of legal agreements between shippers, producers and retailers, the lack of transparency along the horizontal supply chain and the instability of inventory, which makes drop-shipping, for example, extremely costly and unpredictable.¹¹ Inditex, while not explicitly promoting a fair trade agenda, has resisted the trend towards horizontal integration in the time since its founding in 1975, which were prime growth years for containerized shipping. The Inditex campus in La Coruña, for example, includes the company headquarters and a factory. As noted above, the proximity of the majority of its retail locations to its manufacturing base has allowed the company to create value through precision trending and timely delivery of goods to consumers at peak demand prices.

Back in the United States, home of the notorious, resource-inhaling “U.S. consumer,” the construction of new, horizontally integrated shipping infrastructure marches on. In November, ground was broken on the Alameda Corridor East (ACE) project, an extension of the open shipping trench that connected the Ports of San Pedro (highest container volume throughput in the U.S.) to warehousing in downtown Los Angeles. The ACE project will suppress an at-grade rail corridor in the San Gabriel Valley, but is much smaller is scale than the original 20-mile, $1.2 billion corridor at only 1.4 miles long and $173 million. It will extend the reach of the ports into warehousing in Ontario and beyond to the humbly named “Trade Corridor to America” by connecting “the Ports of Los Angeles and Long Beach to the transcontinental rail network, creating a faster, more efficient method for distributing an estimated $314 billion worth of trade by the year 2020.” While it’s true that the Ports of San Pedro continue to push 40% of all goods consumed in the U.S. through the city of Los Angeles (and at least 10 other hapless neighbors), this is a trend that is in decline and losing share to Canadian, Mexican, East and Gulf Coast ports, in spite of zealous local municipalities promoting their pet infrastructure projects. In fact, “combined U.S. East Coast/Gulf Coast Ports have increased their share of U.S. TEUs from 44.4% to 48.5%, while U.S. Pacific Coast Ports have dropped from 55.6% to 51.5%.”¹²

The reasons for this involve some obvious but important competition from ports around the country: they are geographically closer to overseas manufacturers and their end markets. In particular, the Canadian National Railway can ship a container from Prince Rupert port to Chicago for $300 less and only 10 hours more than the BNSF can from Los Angeles. Moreover, Prince Rupert is 1,000 nautical miles closer to Asian ports, which shaves another two days off trans-Pacific shipping over the ports of San Pedro.¹³

Perhaps in the final analysis, common-sense geographical proximity as seen in the “fast-fashion” example of Inditex, innovations in the global supply chain arising out of the particular needs of fair trade and the reversal of branding as seen in social media, might actually converge. By following the psychoanalytical thread of consumer-based identity, through a strong correlation between “lack,” desire and the urban gestalt of Los Angeles as a logistical “orifice” for the U.S. consumer, a prediction can be made that, as the socio-politics of “identity” shift, so might logistical trends and, with them, urban form and function. How these shifting identity flows manifest could herald a new generation of vertical integration in the consumer supply chain, trading higher costs of manufacture and shipping for higher revenue based on a more precise understanding of the consumer, not as a society but as an algorithm. “Just-in-time” distribution has reached its limit of granularity in maintaining adequate inventory at the retail site and distribution centers. The success of both Inditex and fair trade demonstrates that the psychology of the individual consumer is more nuanced than Marxist commodification might suggest, reveling both in increasingly instant gratification and socio-political shopping, both of which demand a new look at supply chain economics and its logistical imprint on the city.