The impact of COVID-19 on our everyday lives has been so extensive that things will never be the same. It has significantly affected what we have always taken for granted.
It has also has had a dramatic impact on the American economy which has hit small businesses such as restaurants particular hard. Many restaurants generate big profits on markups on cocktails and bottles of wine. This has not been possible during COVID-19. However, takeout and delivery has skyrocketed and services such as DoorDash, GrubHub and Uber Eats gained customers during the pandemic. Some large restaurant chains have done much better than expected as drive-through customers, delivery and takeout orders bolstered sales.
As the pandemic forced people to stay home and do more things online, some successful companies were perfectly positioned to take advantage of the change. Now, these businesses are becoming even more dominant – Amazon reported a 70% increase in earnings in the first nine months2.
Brick-and-mortar retailers, which have been ceding ground to online retailers for years, lost out tremendously. The ease of online purchasing and shipping proved beneficial not only to those who were accustomed to online shopping, but also for those, like retirees, who previously were less inclined to order merchandise over the web.
Tech companies were strong before the pandemic downturn and have continued to prosper. Despite the well-documented plight of some industries, others have been boomed during the pandemic:
Online Retailing - Target’s e-commerce business will grow 24% in 2020 allowing it to crack the top 10 list. However, Target’s overall share of the U.S. e-commerce market remains small in the shadow of Amazon’s dominance. Amazon will claim a 38.7% share of the market this year, versus Target’s 1.2%. Even Amazon’s next nearest competitor Walmart is far behind, with just a 5.3% share. The rest of the top 10 list includes eBay, Apple, Home Depot, Wayfair, Best Buy, then Target followed by Costco and Macy’s.3
Workspace Solutions – Businesses are moving to remote and flexible workforces. According to Gartner, nearly a quarter of CFOs said they will move at least 20% of their on-site employees to permanent remote positions. As workforces go remote, the right collaborative technology and security have become a top priority for executives.
Zoom has become a video conferencing leader during COVID-19. In fact, Zoom’s adoption rate surpassed previous industry frontrunners GoToWebinar and Cisco when when it became impossible to host in-person gatherings.
Supermarkets - Restaurant closures mean that people who normally eat out make their own dinners. Even with stay-at-home orders in place, supermarkets remained open as “essential businesses.” Prices rose, as people feared shortages, and demand went up. Additionally, food stores did not have to rely so heavily on couponing and other price promotions to get customers in the door.
Hand-Sanitizing Products - During the pandemic, the number of hand-sanitizing kiosks grew nationwide and is expected to increase. Companies that produce these products have had to dramatically increase production to keep up with demand from its existing customers and others that are looking for hand-sanitizing solutions.
Liquor Stores - It is well documented that home alcohol consumption rose during the pandemic as stressed out parents worried about their employment status and the added responsibility of home-schooling their children as they tried to work. Liquor stores were designated as essential businesses, and people starving for socialization began hosting virtual cocktail parties via Zoom. With flexible schedule schedules and many people out of work, cocktail hour may start before 5 p.m.
Entertainment - Netflix, added nearly 16 million new subscribers during the first quarter of 2020, and its growth numbers more than doubled than what the company predicted as people looked for entertainment options while theaters, cinemas, nightclubs, and concert venues went dark… and still have not returned.
Many businesses have adapted, successfully in some cases. Of course, many struggling businesses, including restaurants, stores and services companies are not traded on the stock market. That means stock prices may give a misleadingly optimistic view of where the economy is headed.