The Commodification of Everything
The Decode in 60 seconds
Barnes & Noble was supposed to be dead. So was Foot Locker. Instead, both are expanding because they figured out something Amazon cannot solve.
When convenience becomes a commodity, experience becomes the scarce good. The local bookstore, the neighborhood shoe shop, the professor who knows your name, that's what the market is rewarding. They are differentiated products, and consumers are paying a premium for personalization.
The correction is already underway in retail. It is coming for every industry that confuses efficiency with value.
Walk into a Barnes & Noble today, and something feels off, but in a good way. The shelves aren't organized like a warehouse. Staff may have left handwritten notes next to the books they love. There's a local author section in the front. The store looks like it was curated by someone local who actually read the books, not by a corporate design team three time zones away.
This should not be happening. For two decades, the story of Barnes & Noble was a slow, painful decline, the kind economists use to illustrate what happens when a market shifts and a company can't adapt. At its peak in the late 1990s, Barnes & Noble had more than 1,000 locations. By 2019, that number had fallen to 627. Borders, its main competitor, had already shut down entirely. Corporate mega bookstores had lost the fight against Amazon. We all moved to digital books and bookstores, and physical bookstores were over. The market had shifted, and the data told us that people chose convenience over tradition.
Turns out, the data was wrong.
Barnes & Noble opened over 60 new stores in 2025. It plans to open at least 60 more in 2026. It aims to reach 1,000 locations, and it is growing fast enough that the number seems realistic. The company has noticed that the number and duration of visits have increased. B&N is taking notice of a market change and is leaning into it (Chain Store Age).
And it is not alone. Dick's Sporting Goods just acquired Foot Locker for $2.4 billion and is doing something similar. It is repositioning the brand away from malls and into neighborhood storefronts, the kinds of spaces left behind by abandoned Walgreens and Rite Aid locations. We are witnessing the rise of the local shoe shop.
The market chatter said physical retail was a dying format. Consumers wanted convenience, speed, and frictionless delivery. They wanted Amazon and online shopping. The companies that survived would be the ones that accepted this and learned to compete online. The ones that didn't would disappear.
That story had one serious problem. It confused what people said they wanted with what they were actually willing to pay for.
The commodification of everything
When a product becomes a commodity, what becomes scarce is the experience of getting it. Over the past three decades, we have seen experiences and relationship purchases become commodified.
Amazon solved the product problem completely. You can get virtually any book, any shoe, any item delivered to your door in two days or less. They won at the logistics game. The price is usually competitive. On pure efficiency terms, Amazon wins every time.
But efficiency is not the only thing markets price. They also price scarcity. And something strange happened as Amazon made products infinitely available: genuine human experience became rare. The feeling of being in a place, being helped by someone who knows something, stumbling onto something you didn't know you wanted, surrounded by people who valued it as much as you do. Those experiences are things we are longing for today.
A book recommendation from a bookseller who has read the book is a different product than an algorithm recommending the same title because 47,000 other people with similar purchase histories bought it or rated it five stars. One of them feels like a personal experience, and the other is a transaction. Although the algorithm might be more accurate, the personal recommendation develops a connection. I will always value your personal recommendation over the digital one.
Barnes & Noble: the local inversion
The turnaround at Barnes & Noble is a deliberate structural inversion of the logic that almost killed the company.
The old Barnes & Noble
Big-box retail applied to books: enormous stores, standardized layouts, centrally planned inventory, every location interchangeable. It made sense when the competitive advantage was selection. Then Amazon offered infinite selection from your couch, and that advantage disappeared overnight.
The new Barnes & Noble
Under CEO James Daunt, control went back to the stores. Local managers now make decisions about layouts, selections, and events. They no longer compete on efficiency. They compete on experience.
The store in Washington, D.C.'s historic Woodward & Lothrop building does not look or feel like the store in suburban Ohio. The Manhattan store is not the Denver store, and that specificity is the product. We are seeing the rise of local personal experiences, and buying a book is one of them.
The results are measurable. Barnes & Noble fell below 600 locations as recently as 2023. It now has over 700. In 2024, it opened more new stores in a single year than it had in the entire decade from 2009 to 2019. Some of its most loyal customers visit nearly 20 times per year, a frequency that would make most retailers envious.
Dick's and Foot Locker: the real estate arbitrage
The Dick's Sporting Goods acquisition of Foot Locker is a different mechanism, but the underlying logic is similar. We do not know how this experiment will end, as we are in the early stages, but it is an exciting one to watch unfold.
Foot Locker's problem was location dependency. Its stores lived in malls, and malls have been losing foot traffic for years. The brand also became dangerously concentrated: roughly 60% of its purchases came from a single supplier (Nike), giving it almost no pricing leverage and enormous vulnerability to any change in that relationship.
Dick's saw something else. Foot Locker's small-format stores, the kind that fit in neighborhood retail spaces, give Dick's a way to enter markets where a standard Dick's Sporting Goods store simply wouldn't fit. More importantly, the collapse of Walgreens and Rite Aid left behind thousands of affordable, high-traffic, neighborhood-scale retail spaces sitting vacant across the country.
The economics of a specialty neighborhood shoe shop are fundamentally different from those of a mall anchor. This is a drastic business model shift.
The independent bookstore wave
Neither of these stories is happening in isolation. Independent bookstores, the category Amazon was supposed to have eliminated permanently, have grown 70% since 2020.
For every bookstore that shut down, four new ones opened. The American Booksellers Association, which once saw its membership fall from 7,000 in 1994 to fewer than 2,000 in 2019, has now grown its membership by 18% in a single year. The revival of Barnes & Noble did not cannibalize independent stores. It validated the format and expanded the cultural permission to shop locally.
The economics behind it: product differentiation
There is a term for what Barnes & Noble and Dick's are doing. Economists call it product differentiation, the strategy of making your product distinct enough from competitors that price is no longer the only basis for comparison.
In a commodified market, products are interchangeable. One book is the same as another book. One pair of sneakers is the same as another pair. When products are interchangeable, the only lever is price, and on price, Amazon wins every time.
Product differentiation introduces another decision that is not price-based. When the Barnes & Noble on F Street in Washington, D.C. feels like a neighborhood institution rather than a retail chain, it is no longer competing with Amazon on Amazon's terms. It has changed the product. You are not buying a book. You are buying the experience of finding it in that store, recommended by that person, in that place. That is a different product. And different products command different prices and higher profits.
I see this every day, in the classroom
The same logic applies far beyond retail. Universities have been running this experiment for over a decade, and the results look remarkably similar and might explain some of the issues we are facing today.
The same force that almost killed Barnes & Noble has been at work in higher education for years. MOOCs, massive open online courses, arrived in the early 2010s with the same promise Amazon made to bookstores: infinite selection, zero friction, available anywhere, cheaper than the alternative. Harvard lectures on your laptop for free. The best professors in the world, on demand. The university model became commodified. Education became transactional, and learning was no longer the goal. School became a series of hoops to jump through; once you did, you could receive your degree.
A lecture is not the product of a university education. Presence is.
The experience of being in a room with someone who knows things and cares whether you understand them is what people are paying for. Don't get me wrong, the pressure to commodify education is real, and it is influencing many of the policies we see today. The right thing to do is to push against the trend.
The universities that are thriving are doing exactly what Barnes & Noble did: they stopped competing on content delivery and started differentiating on experience. That is what I have been focusing on in the work that I lead. The classroom that survives is not the one with the best slides. It is the one that creates something a screen cannot replicate, a human connection and a localized experience, especially when the courses are online.
When something becomes commodified, it becomes interchangeable and transactional. Barnes & Noble's local booksellers and their handwritten shelf notes are doing exactly what a great professor does: they are making the encounter personal. They are the reason you stop at that book instead of scrolling past it. That is a service that algorithms and scale cannot replicate, and the market is pricing it accordingly.
The rise of connections
The death of retail was a real phenomenon, but it was specific. It applies when we compete on convenience and selection without offering anything else. Stores that were simply slower, more expensive versions of Amazon were always going to lose. That was the correct prediction. The error was assuming that convenience and selection were the only things retail had ever offered.
What we are now watching is a market correction: a shift away from commodification and toward personalization. Consumers are telling us, through their behavior and willingness to pay, that human experience has value and cannot be captured within a two-day delivery window.
This shift might violate some of our understandings of what people seek in markets. Efficiency, low cost, high value: sounds great. In reality, consumers are slowing things down. Adding friction allows consumers to linger and talk to an expert who may help guide them to something they never knew they wanted.
The companies that survive the next decade will not be the ones that compete with Amazon on Amazon's terms. They will be the ones who figured out what Amazon cannot sell: a place, a person, a feeling of being somewhere that was designed for you. Somewhere you are seen, and your tastes and preferences are validated.
What this means for you
This is not a retail story. It is a story about what markets do when efficiency wins so completely that it hollows out everything else. The same correction is underway in education, in fitness, in professional development, everywhere people are rebuilding the experiences that scale took away. We are hungry for deeper connections.
For the classroom: Amazon and Barnes & Noble sell the exact same books. Using product differentiation, explain why some readers pay more at the store. What product is each company actually selling?
Where in your own life have you chosen the slower, more human version of something over the convenient one? And what made it worth it?
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