Books, malls and cars: where the physical world still rules

Many consumers are resisting, even turning back the digital revolution.

The writer is chair of Rockefeller International. His latest book is ‘What Went Wrong With Capitalism’

Like any technological revolution, the one we are living in has inspired many warnings about how quickly the new would replace the old. A decade ago, forecasters were certain the digital and virtual spelled the end for the analogue and physical. Ebooks would kill off print. Online shopping would hollow out bricks and mortar stores. Fleets of self-driving electric taxis would push combustion engines off the road. One had US sales of private petrol cars falling to zero — by 2024.

Flash forward to today. In each of these cases and more, the old is holding up surprisingly well against the new, thriving even. Technology may be evolving at an accelerating pace, but humans will not always rush to adopt the new, new thing. Having grown up in the physical world, many consumers still feel more comfortable with the traditional thing. In the US, the Harris Poll found two-thirds of respondents wished they could go back to a time before everyone was “plugged in”.

By early last decade, the general expectation was that readers would abandon books for short takes on social media and for the surviving tomes to come mainly in digital forms. Johannes Gutenberg, 15th-century inventor of the printing press, must have been turning in his grave.

Instead, over the past 10 years print sales have given no ground to digital alternatives and still hold 80 per cent of the US market, according to the Association of American Publishers. Total book sales have kept growing and last year topped 3.1bn, or nine for every person in the country — suggesting Americans are still reading books, mostly in physical form.

Consider, too, the petrol car. As climate-conscious governments tried to kill the internal combustion engine by subsidising electric rivals, analysts foresaw “the end of the ICE age”. Now, in countries where subsidies are expiring, such as the US, the big carmakers expect EV sales to drop off “precipitously”, as General Motors recently put it.

GM says “the ICE tail is now fatter and longer than anybody ever thought it was going to be”. Ford says the EV share of US sales will fall by half next year to maybe 5 per cent, and will remain “smaller — way smaller — than we thought” for the foreseeable future. Toyota continues to build its fleet on the assumption that many drivers still prefer the rumble and smell of petrol cars to the silent, odourless alternative.

Bricks and mortar aren’t dead, either. Online shopping rose early in the pandemic, but has plateaued over the past five years at around 20 per cent of US retail sales. The rest goes to physical stores, which over the same period have seen openings outnumber closures by around 2,000 a year since 2021.

Even that much-maligned staple of suburbia, the indoor mall, is showing signs of life. Smaller ones are still vanishing, but the big fancy ones are reinventing themselves to appeal to younger generations. They are offering on-site pick-up of online purchases so customers can try on merchandise, replacing department stores with smaller, trendier shops that generate more revenue in the same space, upgrading food courts and staging more social events.

Just as physical retail started to stabilise in the US so, too — perhaps not coincidentally — did the use of physical cash. The average number of cash payments Americans make each month was in decline until 2021, when it levelled off at seven transactions, and there it sticks.

Young “digital natives” often lead these retro trends. Malls are by far most heavily frequented by Americans under 35. Younger customers, eager to wean themselves off mobile screens, are rediscovering older technologies from flip phones to CDs. Younger parents looking to protect their kids from online addiction are buying them colourful new versions of the old landline phone with names like the “Tin Can”.

Nostalgia also animates the “vinyl renaissance”. Vinyl records date to the 1930s, but sales more than tripled in the past decade to nearly 50mn. These aren’t dusty Beatles albums salvaged from attics; they are newly pressed discs from stars such as Taylor Swift. Buyers say they are drawn to them for old-timey, tactile reasons: cover art, sleeve notes, the occasionally imperfect sound of a needle. In short, another escape from virtual sterility.

None of this suggests technological revolutions won’t bring more change and that virtual realities won’t encroach further on daily life. Just that there are natural barriers, a rearguard human resistance, slowing and perhaps even capping this advance. The physical world has already shown more staying power than many of us expected.