The Old Order Changeth

Friday is traditionally pizza night at Chez Carlino. For the past 16 years, we’ve primarily ordered from one of the local pizzerias – Fernando’s – run interestingly, enough by a Paraguayan expatriate who made as good a product as anyone from Italy. As an Italian, I do not make that comparison lightly.

In 2001, Fernando assumed the lease on what is commonly known as a “ghost space,” a seemingly jinxed location that saw the previous three tenants all fail within a year. Both my children literally grew up on his food at the end of the work week. So this Friday when I called in my order, I was sadly informed that it was his last night. He was closing up for good citing a wave of new competitors and soaring rent increases.

I was stunned and admittedly, somewhat teary eyed.

As if almost by coincidence, the next day one of the New York papers featured a story chronicling the troubles impacting the retail sector, and how nearly 3,000 stores have closed nationwide and the grim specter of potentially thousands more locations locking their doors. Brands such as Macy’s, J.C. Penney, Gap and Abercrombie & Fitch, reportedly may have to trim their store counts by some 20 percent. Even the once reliable Sears, where I remember purchasing my first lawnmower and set of Craftsman tools, revealed that it may have trouble continuing as a “going concern.”

So what happened?

Answer: a lot.

First, many of the above mentioned brands made some seriously bad strategic decisions over the past several years. But probably above all is that the retail business model has changed. The rapid emergence (and ease) of online sites like Amazon Prime has rendered parking problems and congested checkout lines as outdated as Boyz II Men CDs. The basic retail model many of us grew up with has slowly morphed away from the 40,000 square foot big box to the home PC or tablet.

Now I doubt we’ll see that shift happen as rapidly or to that scope in the accounting profession because it’s still all about forging and keeping relationships, although with the accelerated adoption of cloud solutions, the amount of actual client face time has dissipated rapidly. True, there are online providers of accounting services – primarily bookkeeping and payroll services as opposed to the more complex offerings like cost segregation and lit support – and about 15 percent of new start-up firms are virtual, so it would be rather difficult to conduct regular in-office visits.

But with technology breakthroughs poised to become mainstream such as blockchain and artificial intelligence in software programs, it might well signal a quantum shift in the traditional operation of accounting practice as we know it.

While that might be premature, I doubt anyone who ever purchased a set of Craftsman tools ever thought that one day they might turn out to be a family heirloom.