In recent years, economists worried about a looming recession. We're now facing economic uncertainty in 2020, but not for the reason many expected. The Covid-19 pandemic has not only affected our personal lives, but it's also rapidly shaped the business landscape.
As former presidential candidate Andrew Yang put it, "We're experiencing 10 years' worth of transformation of our economy in 10 weeks. Because if you're a transportation company or a grocery store or a big company, you're scaling up your investments in robots and technology, because they don't get sick."
Companies are rapidly updating their operations to keep business rolling while stay-at-home orders are in place. Innovative companies are doing better than their counterparts during this crisis. Here are some of the trends and innovations that I think will long outlast stay-at-home orders.
Increased Online Presence
E-commerce has rapidly been replacing traditional brick-and-mortar shopping -- and the pandemic has sped up that transition. Companies that lack a strong online presence, or fail to innovate at all, are falling behind.
While some businesses have gotten by just fine without an online presence, they're feeling the impact of that decision now as the global pandemic has restricted customers from entering their stores to make purchases. A 2019 survey found that 40 percent of small businesses lack a website, meaning their entire source of revenue was quashed the moment the quarantine began.
The volume of e-commerce orders has risen by nearly 47 percent in the past month as consumers have spent more time at home and online. Businesses without an online presence must quickly build one to deliver products and feed their bottom line.
Even entertainment companies are jumping on the online delivery bandwagon. Universal, for example, decided to move its Trolls World Tour premiere online after theaters closed during its planned release. The result? The film broke digital records and hinted at another revenue source that most companies had treated as an afterthought -- a way to make money after a box-office release.
This rapid shift will carry on post-pandemic. Businesses that built an online presence should fight to keep it -- it will strengthen their brand and bolster sales. It will also be a source of revenue that acts as a fail-safe if a similar crisis -- or secondary outbreak -- occurs.
Every business needs supplies to operate, even when supplies are hard to come by. There are two ways to get this done. The first is to manage a supply chain through a distributor that gets you everything you need to make and sell your product. This is cost-effective and time-efficient for the company receiving the service.
This is the case for online mattress provider Casper. It was able to quickly enter the direct-to-consumer mattress market by using a distributor to deliver its product, which required little capital to launch. It instead spent that money on marketing its brand to drive sales, which led to rapid growth and success.
The second approach is to control your own supply chain. This is a larger undertaking that requires more upfront capital, but is more sustainable and more easily managed in times of crisis. This side of the coin is used by one of Casper's largest competitors, Purple.
I think Purple's strength during this pandemic lies in its infrastructure. Purple built its own facilities, technology, and production for full autonomy of its business operations. Because it owns its supply chain, a crisis like Covid-19 isn't disrupting the flow of business, allowing Purple to continue to assemble and sell its mattresses.
To put this success into perspective, almost three-quarters of U.S. businesses are suffering from supply chain disruptions. Once the pandemic has passed, more companies will look to do the same to prevent another crisis from threatening their business.
As e-commerce and deliveries continue to expand, curbside pickup will also begin to gain steam following the coronavirus outbreak. Curbside pickup is projected to be a $35 billion market, led by Walmart's popular pickup service. This combines both online and offline commerce into one service, an idea that's attractive to many consumers.
While working to balance the economy and preserve consumers' health, many businesses are turning to curbside pickup to make the best of a sticky situation. The service has seen a 200 percent increase in use compared with the year prior. The success that this has awarded some businesses will lead many to consider providing the service indefinitely, even after the quarantine has officially ended.
While the future is never certain, it doesn't hurt to be prepared. The businesses that learn from this experience will position themselves for success as they seek to innovate and adapt. Their actions won't just influence their own success; they'll also shape how the world approaches commerce in the years to come.