How Businesses and Consumers Are Changing as a Result of COVID-19

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COVID-19 has drastically, and in many cases, irrevocably altered business and consumer habits. Many department stores, already facing uncertain fortunes, have started reducing the number of open storefronts. Other companies have followed suit, and a few are completely closing their stores to move exclusively online. Even a California moving company has had to change our practices, as the various safety guidelines and executive orders affect how we operate and what we move where and when.

The situation is growing worse as second waves cause massive upsurges in pandemic cases in various places, particularly in the United States. As a company from one of the former hotbeds of pandemic activity, we are keeping a close eye on cases across the country. We are a long distance moving company and have taken every precaution to ensure the safety of our clients and employees.  Like other companies, we are also providing and moving supplies for medical staff and other essential employees to ensure they can continue to fight the pandemic so we can all breathe easier.

As alluded to before, though, a lot of companies are moving to more online business. Online shopping has skyrocketed since the start of the pandemic, and it’s not just sites like Amazon and Ebay receiving the benefits. Many restaurants and grocery stores are providing expanded delivery options, too. As noted by others with an ear to the ground on such matters, “Many establishments have already responded to this trend, with even small independent stores enabling online ordering for the first time.  Also, the disproportionate impact of the virus on those age 50+ has created a surge of older, first-time users of online grocery and delivery models. This behavior shift for some older consumers may persist post-epidemic as they embrace the frictionless shopping methods popularized by Millennials.”

Another trend is a preference for local stores over chains. Small businesses have had a hard time weathering the pandemic. Some experts expect as many as a fifth of all small businesses to shutter for good because of lockdowns and reduced business. While the big chains can reduce hours and take advantage of generous government loans, smaller companies struggle. As those previously mentioned experts at Deloitte state, “smaller stores don’t require us to be inside them for long periods of time, which is also desirable. While “big box” retailers have grown and gained market share in the past due to their wide product selection, low prices and convenient hours, this new local focus may benefit smaller, local shops and generate more revenue closer to home.”

Though more people are shopping at smaller stores or online, that doesn’t necessarily mean they are shopping more. A lot of people are facing reduced hours, layoffs, and unemployment due to the pandemic. Though the government has stepped up to help such people, as have various companies, money is still tight all around. This means a closer, careful eye on the budget, because, frankly, a lot of people aren’t sure if they’ll have enough money to pay rent and other bills.

A lot of changes are taking place on the business side as well, not all of them as obvious as increasing online shopping and offering delivery services.

More businesses are reaching out at the community level to ensure they receive what business they can. This is especially true of small businesses. To quote the experts cited before, “the only way to re-establish the global economy is for organizations to adopt policies and processes that establish strong trust among employees, customers, partners and the community. Taking care of people and prioritizing general wellbeing may become a requirement for doing business in the “next normal”.

A side-effect of this is increased transparency by businesses. This is especially important on the health and safety side of matters. Companies that don’t take the health and safety of their employees seriously are a dime a dozen, but with a pandemic on the loose hose companies receive a lot of flak and legal repercussions not seen since the rise of unions over half a century ago. In short, employees are fed up and fighting for their long neglected rights. This means companies that aren’t open and honest with their staff can find themselves the next target of a social media storm.

With international trade hampered, many businesses are taking a long, hard look at the extent of their global interconnected trade and considering local options. While much of these efforts will likely come to nothing, globalization has brought some to question the problems of logistics when those long trade routes are hampered by a crisis. Some companies, in turn, are looking to increase international connection so that they can better respond to such crises quickly. To quote the experts, “Globalization may move from being a cost and efficiency play to a resilience play. Organizations may work with partners that not only provide good price/performance; they may also need to adhere to standards and policies that effectively mitigate their risk potential in the global supply chain and improve their environmental and social impact. This aligns with the path that has already been defined by the 2030 Agenda for Sustainable Development.”

With more companies moving to remote work and online shopping, the need to bolster cyber security is also a high priority. The Deloitte experts explained that “Companies must improve their cybersecurity and fraud prevention mechanisms in order to reduce risk and ensure continuity of operations. A company’s security posture impacts its ability to deliver reliable service and live up to a brand promise, while being compliant with regulations and avoiding legal issues. To date, cybersecurity has often been an afterthought, integrated into processes and systems after they’ve been deployed. It needs to become a foundational component of a company’s processes and systems, and integrated earlier, at the design stage.”

Different businesses are responding to the “new normal” in different ways. As noted earlier, a lot of brick and mortar stores, bars, brewers, and restaurants are offering online ordering and delivery services to maintain operations. This is especially important for brewing companies because of the delay between brewing and bottling. If the beer doesn’t move, month’s worth of stock can be destroyed. Small stores are also offering curbside pickup and delivery options in order to keep stock moving and customers spending money. Hobby stores, for example, are making sure their regulars are kept apprised of new releases and such so that they can still enjoy themselves during these uncertain times.

Infrastructure, meanwhile, is slowly recovering, especially outside construction. The need to construct new buildings has slowed significantly as few new homes or businesses can start during the pandemic. While municipal constructions and maintenance is a constant need, private construction has seen a marked decline. So too has freighting and other large scale hauling. Though trucking has increased with the reduction in restrictions for many states, it is not to the level it used to be. This is why we as a moving company are doing everything we can to support first responders and medical staff by delivering desperately needed personal protection equipment.

Several websites have tracked the losses over the last several months. According to Mckinsey.com.

“In a week when the global pandemic seemed to gather strength, our new research both shows the grim economic news and reveals a streak of optimism that many are starting to feel. Our monthly global economic conditions snapshot indicates that 52 percent of executives now say that their national economies are doing substantially worse, up from 10 percent in March 2020. Yet the proportion of executives who expect profits to rise within six months rose by four percentage points, and leaders in retail, high tech, and telecom are increasingly optimistic about the return of customer demand. In June, many more executives around the world said that the economies of their home countries would soon be doing better than had said so in May.

Another new global survey examined sentiment among people who make financial decisions for their households. Across the globe, they are reporting lower income, savings, and spending. In most countries, 20 to 60 percent of these decision makers say they fear for their own jobs. Roughly half have no more than four months of savings.

These grim statistics present a challenge for banks and other consumer-facing businesses, such as telecom companies, retailers, health systems, and utilities. A delicate balancing act awaits these organizations as they work to ensure that customers receive the necessary support—and that lenders can continue to cultivate relationships with their borrowers—while preserving shareholder value in the longer term. A detailed perspective on utilities considers this and other conundrums. So does a new look at African banks.”

The crux of such data is that international commerce, and even domestic trade, have slowed significantly for various reasons. Besides the obvious issue of limited movement to curtail the spread of the pandemic, fewer people have income to spend on non-essentials. While grocery stores and the like still see regular purchasing, and superstores like Costco saw a massive increase in sales during the early weeks of the lockdown, other businesses are not so fortunate. People are being cautious with their funds to a large extent, which means luxuries like jewelry and other such purchases have seen a drop in sales.

As mentioned earlier, online sales are increasing. Mckinsey noted that “have seen more than 10 percent growth in their online customer base during the pandemic (Exhibit 4) and many consumers say they plan to continue shopping online even when brick-and-mortar stores reopen. In markets that had moderate online conversion rates before the pandemic, such as the United Kingdom and the United States, e-commerce continues to grow across all product categories. In markets like China with a high rate of online shopping before the pandemic, although total consumer participation in online shopping is not expected to go up substantially, the share of wallet spent online is expected to increase.”

Though online purchases have kept people going during lockdowns, and people are starting to spend more in person on non-essentials. Many people, rather than return to disrupted brand loyalty affected during the pandemic, are looking for shops with the greatest safety measures. Companies that can assure both their employers and their customers that they are taking every step possible to ensure maximum health and safety are more likely to see business and the return of their staff. Those companies that put action to word in such regards are doing better than those who cannot back up their claims or already have dubious business reputations.

The post pandemic economic world is an uncertain one. Many companies have had to adapt to the crisis in order to stay in business. Those that could adapt have managed to chug along and are starting to reopen as some areas loosen restrictions to allow in person shopping once more. Some companies have been unable to adapt. In certain fields, such as department stores, declining sales before the pandemic have become exacerbated by the crisis. Many department stores are reducing the number of open stores or switching entirely online.

Even stores that have weathered the pandemic storm have had trouble. COVID-19 has impacted every facet of the economy, from the gas people use to travel to work, to where people can work, to what they buy and how they buy it. Both consumers and businesses have had to adapt to this “new normal” as people face financial uncertainty and companies innovate to keep the lights on and operations running however they can. Though many business areas have seen drops in sales, and not all companies will make it through the ordeal, the ones that do will still face questions as the world slowly moves into a post-pandemic life. How that life will affect businesses and their customers is not known, but it is unlikely that everything will truly go back to pre-pandemic way. Online shopping and remote work were already becoming more popular before the crisis, and that is unlikely to stop even when vaccines become easily available. Both consumers and businesses will need to keep adapting if they want to stay operating and shopping for what they need.

 

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