In a Time of Economic Downturn, Key Industries and Some Small Businesses Are Thriving
As the Coronavirus pandemic drags on, the American economy is sailing into the unchartered waters of an uncertain economic outlook and undulating economic recovery, with thousands of American livelihoods floating in the balance. As a collective, American states are woodenly emerging from their economic slumber, with some states having pursued premature, abrupt re-openings and others cautiously slipping into the daybreak of nearly full re-opening. While the long term repercussions of a voluntary economic slowdown at a historical scale remain largely unknown, the impact on small businesses has undoubtedly been disquieting and concerning across all states.
A survey released in July shows the harrowing implication of the closure on small businesses. Overall, the businesses surveyed reported cutting back their active employees by nearly 40% since the beginning of the year. The Mid-Atlantic region (incorporating parts of New England and New York City) was bit particularly hard, where more than half of businesses closed and employment dropped 47%.
While Americans have been reading about the overall economic downturn, few are catching headlines about how key industries have been booming. Industries that are able to help folks go about their day-to-day activities and meet their basic needs, such as food and supplies, in a socially distanced way have seen a particular growth in business.
Delivery services have seen significant growth in the last couple months. After experiencing financial hardship, with a loss of 17 cents per share, GrubHub saw an exponential upshot in revenue during the second quarter, bringing in an additional $459.3 million from last year, a 41% increase.
As restaurants across the country limit dining services or opt for takeout only, many Americans are trading their dining experiences for cooking at home. With the sharp rise in demand waving over large grocers, smaller grocery stores have helped bigger chains pick up the slack. Social distancing measures imposed at large grocers, like store capacity ceilings and scaled-back shopping hours, have pushed consumers to seek out their key purchases in smaller establishments. In fact, some predict that buying small and local could represent a long lasting change to grocery stores. A splash of small, independent grocery stores are predicted to emerge in coming months and be a constant feature of the future grocery industry.
The onset of what some have deemed the Covid Era has prompted an increased popularity in drive-in movie theaters. With Hollywood taking a timeout until the pandemic presents more stability, locally organized drive-in theaters have arisen to fill the void across North America. This phenomenon gives insight into folk’s desire to get out of the house while still playing it safe. Needless to say, older generations can revisit the nostalgia of yesteryear and younger generations can find a new form of entertainment for a warm summer night, thanks to the resurgence of drive-in movie theaters.
The Covid-19 pandemic has engulfed the nation, people’s minds and business’s futures along with it. Although Americans have been bombarded with headlines on the economic hardships in the present and predicted for the coming months, some industries and small businesses have reaped the benefits of increased demand for socially distant service delivery. Small, local grocery stores, delivery services, and enterprises offering socially distant, outdoor entertainment are seeing an uptick in business. Some of this current prosperity is due to cement itself a permanent feature in certain industries’ futures. To maintain their edge, small businesses and startups will have to adapt to the current businesses in-place that consumers, in one way or another, are subconsciously growing accustomed to.
Self checkout kiosks and less reliance on staff has been an increasing trend in recent years, and this transition has been exacerbated by the need to reduce face-to-face interactions to slow the spread of Covid-19. As a result, we could likely see more emphasis on apps and less dependence on staff to meet the needs of clients.
Many businesses are beginning to adopt contactless payment as a means to mitigate the risk of contracting the virus. Prior to the pandemic, it was rare to find establishments using contactless payments. However, on the off chance that accepting crinkled cash or debit cards with germ-infested surfaces could expose employees to Covid-19, many businesses are opening up to the possibility of embracing contactless payment. America as a whole has been slow to adopt contactless payments options. 2 years ago, merely 3% of cards in the U.S. were contactless, compared to majorities in the U.K. and South Korea, a study from A.T. Kearney found. Banks in the United States have already been pushing clients to adopt contactless payment in recent years, and it has had some astonishing effects. The use of such payments has grown by 150% in the past year and a half. The onset of the pandemic may be the last nudge American businesses and consumers alike need to adopt contactless payment en masse. Interestingly enough, one of the most booming industries in America today, the grocery industry, has been the major driving force for adopting contactless payment in countries like Switzerland and the United Kingdom. In 2017, 60% of contactless transactions in the U.K. came from the grocery or restaurant industry. The implications allude that America’s most in-demand sectors have the potential to get America past the threshold, to a majoritarily contactless economy–a power which hinges on their willingness to embrace contactless payments.
Delivery services, reliance on apps, a shift towards contactless payments and interactions, and less need for face-to-face interactions: this is the direction business service delivery seems to be headed. On the opposite side of the same coin, more Americans are opting to buy local and small. Only the future will tell if and which social distancing measures will be adopted as permanent business practices. American small businesses must be keen to observe such trends and ready to embrace new means of service delivery to maintain their edge. Covid-19 is here to stay for a while, as do appear many innovations in American business practice. Whether certain small businesses are dependent on their willingness to adapt and adopt.