The Stay-at-Home Economy Stays Put
New convenient services and technologies will survive the pandemic.
Nov 30, 2020 | 4 min read
ALEXANDRIA, Va.—Whenever it’s safe to again leave home for work, school and shopping, Americans won’t be going back to the same lifestyle, reports the Wall Street Journal. What were pre-pandemic conveniences have become necessities that consumers are unlikely to give up even after there’s widespread immunity to COVID-19. There are several reasons why.
First, companies have made huge investments in the infrastructure needed to deliver goods and services quickly and efficiently, which means those products are now easier to use and often less expensive. Second, families have also invested in the services and gadgets to keep their members safe and sated while sheltering in place. Third, habits have changed. Many people have adopted new technologies that they might have ignored in pre-pandemic days, and finally, thousands of Americans who lost traditional jobs in retail and service—on showroom floors and inside restaurants—have found new ones working in online order fulfillment and delivery. Even those who retained their jobs are seeing their roles shift.
Amazon is an example of a company betting that the stay-at-home economy will last. It spent $30 billion on capital expenditures in the first nine months of 2020, much of it for its e-commerce business. Other companies that compete with Amazon have made investments to handle the pandemic surge of demand, while purveyors of streamed entertainment, such as Disney and Netflix, have added more subscribers and the IT infrastructure and content required to keep them around.
DoorDash and Uber and other delivery platforms have invested heavily on sales and marketing to acquire new restaurants for their platforms and attract more customers. Following the new trend of the “ghost kitchens”—kitchen-only restaurants that offer delivery—Chipotle recently opened its first “digital kitchen” in Highland Falls, N.Y. Red Lobster and other chains are making similar investments.
According to a recent survey by McKinsey, the pandemic caused 10 years of consumer adoption of e-commerce to be compressed into three months. Adoption of the changes has varied by age. Younger people were already more likely to shop—and do everything else—online, but a recent survey from digital consultancy Mobiquity found a 47% increase in the number of baby boomers reporting they had ordered delivery from a restaurant through a website or app; a 193% increase in the number ordering groceries through a website or app, and a 469% increase in the number who had used telemedicine. Nearly 90% of boomer respondents said they’ll continue to use such technologies even when the pandemic ends.
As soon as they feel safe doing so, Americans will return to restaurants and bars, concert venues and shopping malls—though there will be fewer to return to, at least at first. When it comes to eateries, the National Restaurant Association predicts that 100,000 restaurants will close by the end of 2020.
Of course, there’s also the possibility that Americans will be so relieved to finally go out again that they gorge themselves on away-from-home experiences. Although 10 million people remain unemployed, between February and October U.S. savings account balances rose $2 trillion, notes economist Ian Shepherdson of Pantheon Macroeconomics.
“There’s a lot of unknowns, but the thing I’m most confident about is there’s a ton of cash to finance spending, and a ton of untapped demand for services,” Shepherdson said.
For more on how the COVID-19 pandemic has accelerated 10 key trends in convenience, see the three-part series “Weak Signals No More” in the October, November and December issues of NACS Magazine.
And don’t miss the education session “From Last Mile to Cashless: Trends Accelerated by COVID-19” at the NACS Crack the Code Experience. The session debuts live tomorrow, with an encore Friday and on-demand viewing starting Saturday. There’s still time to register for Crack the Code.
NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.
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