Due to the coronavirus pandemic, thousands of businesses across the world are implementing mass layoffs and many have closed their doors for good. The few that can afford to close temporarily are losing money by the minute. That’s bad news for the U.S. economy.
Currently, only businesses deemed essential are allowed to operate in person. However, non-essential businesses are continuing operations online by allowing employees to work from home. Working from home allows workers to remain in self-isolation, but if brick-and-mortar businesses shut down for too long, experts foresee another economic depression.
The experts could be right considering the inevitable devastation caused by pandemics and even some epidemics. However, there’s one aspect about modern society that makes the situation a little different: the internet.
Ecommerce provides an advantage in uncertain times
During the Great Depression in 1929, providing goods and services in person was the only option. In those days, employment income was derived mainly from industrial output and when those workers were laid off, it took five years for the economy to recover.
Today, entire companies can operate entirely online. Since online businesses can fill an entire spectrum of society’s needs with minimal costs, the effects of a depression would be very different today. Some physical jobs might be lost for quite some time, but only in certain industries. Other industries that can operate online would thrive.
Some online businesses are already thriving
While brick-and-mortar businesses are struggling, some online businesses are booming. Businesses that sell items in high demand are doing extremely well because of the pandemic. Online retailers that sell cleaning supplies, food, pet food, alcohol, and preparedness supplies are quickly running out of stock.
Ecommerce retailers that sell personal hygiene products are doing especially well since supermarket supplies are constantly running low. Toilet paper is almost never in stock and a walk down the shaving aisle at Walmart reveals near-empty shelves.
Empty shelves are good news for companies that sell these products online. For instance, all the hand sanitizer and sanitizing wipes sold out fast on Amazon and similar retail sites. Online retailer shave.net saw nearly a 40% increase in sales when states issued mandatory stay-at-home orders. Some people even switched to a safety razor to save money in these uncertain times.
There’s no doubt that online sales will continue to rise for personal hygiene products like toothpaste, deodorant, razors, and of course toilet paper. Even businesses and individuals making masks will see sales for years to come. However, it’s also the perfect time for other industries to move their business online.
Once the pandemic is over, internet sales might slow down a bit, but online businesses will continue to thrive even after the novel coronavirus is contained.
Online business is our future
According to entrepreneur.com, Amazon.com was responsible for about 50% of all ecommerce sales by mid-2018. Many businesses generate more sales on Amazon than on their own websites. People love shopping online and that’s not going to change. In fact, the love of online shopping is about to increase.
When the COVID-19 pandemic is finally under control, people will remain cautious about going into stores for a long time, just like Great Depression survivors continued to be resourceful even when food and supplies were plentiful. That’s just human nature.
Naturally, people will be wary of interacting with store clerks and other customers for a while. People with compromised immune systems will prefer to stay at home even more than before. If wary consumers can buy something online without leaving their house, they will.
Takeout and delivery services will be ramped up
Businesses that never considered launching an ecommerce storefront will need to sell online to stay in business. Businesses that can’t deliver through the mail will need to take orders online and provide delivery or pickup options. For example, garden centers, coffee shops, cafes, convenience stores, and even big chains will all need to consider providing direct delivery services.
Courier services that pick up and delivery items from other businesses will also see more competition in the near future. Grocery stores that didn’t offer curbside pickup or delivery will need to start offering these services to stay in business.
Ecommerce will put more money into the economy
Since the cost of doing business online is much lower than maintaining a traditional storefront, we’ll see more money being put into the economy when more companies start selling online. Healthy competition will compel businesses to offer lower prices and consumers will have more money to spend.
When this pandemic is over, if the U.S. starts to fall into a depression, ecommerce has the power to play a key role in reviving the economy.