The “Shut-in” Economy: We’re All Online Commerce Providers Now
Updated to reflect new information 04.09.2020
Due to the Coronavirus, multiple aspects of society are in flux. DisCo has recently covered how the nature of both business and education are adapting to the current state of affairs by promoting digital tools to practice social distancing while maintaining business and educational continuity. To the extent possible, the rest of the economy has followed suit. Some observers have suggested that the crisis gives pre-established digital commerce businesses an advantage. But in fact, the so-called “shut-in” economy has forced many businesses — from blossoming technology companies to brick-and-mortar retailers to restaurants and bars — to stretch their digital commerce muscles. While the future remains highly uncertain, the transformation of countless businesses into digital commerce providers nearly overnight may represent a permanent transformation of the global economy.
Many businesses that once prioritized the physical shopping experience have switched gears and begun to prioritize their digital services. Brick-and-mortar retailers are now emphasizing their digital storefronts to attract consumers to their services. Some developments illustrating this trend are 1) the expansion of delivery services; and 2) brick-and-mortar retailers adapting their business models, hiring more employees and offering consumers the ability to purchase and receive their products with minimal human contact. These developments come at a time when consumers couldn’t need them more.
As consumers stay home, delivery services that allow users to shop and order from local grocery stores and retailers, services such as Instacart and Shipt, have seen rapid growth. The increased consumer demand for quick, convenient, and contactless shopping has become a near-necessity. As such, Instacart and Shipt have seen a sudden uptick in their users and volume of orders, and have expanded upon their services to compensate. Instacart recently announced it would hire 300,000 more shoppers over the next three months while Shipt recently introduced no-contact delivery and announced it would hire thousands of new shoppers across the country. Furthermore, both Instacart and Shipt actively engage in creating partnerships with small retailers, which helps these retailers by exposing more consumers to their offerings.
In addition to expanding delivery services, many brick-and-mortar retailers are now hiring and increasing their online, delivery, and warehouse capabilities. Walmart is hiring 150,000 temporary workers to work distribution centers and online fulfillment centers and handle the influx of online shopping, as it “captures the majority of first-time online grocery orders.” CVS plans to immediately fill 50,000 full-time, part-time and temporary roles. Amazon is hiring 100,000 workers and is raising pay by $2 an hour for warehouse and delivery employees through April. 7-Eleven is hiring 20,000 new employees to help meet a surge in mobile orders through the 7NOW app. While this uptick in hiring is mainly focused on meeting increased demand amid the Coronavirus outbreak, consumers will likely want the continuation of the services (discussed below) these new employees support after the crisis ends.
In parallel, all of these companies are increasing Coronavirus safety and prevention standards, raising pay, and offering bonuses for worker performance. CVS is providing bonuses and adding benefits; Kroger is enacting customer capacity limits in its stores; Target is raising its pay by $2 an hour until at least May 2, increasing the number of employees who receive bonus payouts, and investing more than $300 million in their workers; Amazon is raising pay $2 an hour for its warehouse and fulfillment center workers and taking care of its employees by imposing social distancing and/or providing protective screens where distance can’t be maintained. Albertsons Companies stores recently announced a national effort to seek a temporary designation for supermarket associates to ensure that they are prioritized for testing and provided personal protection equipment during the Coronavirus outbreak. Amazon and Walmart both will actively check the temperature and provide paid sick leave for their workers. Additionally, Amazon will also offer 2 weeks of quarantine pay leave.
In tandem with retailers’ efforts to keep their warehouses and workers safe and operational, retailers are also expanding how they get products to consumers. Often referred to as “buy online, pickup in-store”, consumers have for some time been able to order products through retailers online and pick up their orders in brick-and-mortar stores. However, the more recent addition of curbside pickup and delivery capabilities to retailers’ services has allowed consumers even greater control and independence in their shopping, i.e., “buy online, pickup curbside”. This is an especially important development now. There are many retailers — ranging from groceries, to office supplies, tech, entertainment, home improvement, fitness, pet care, and more — that have engaged in this practice due to the Coronavirus. For example, Walmart is offering no-contact curbside pickup and delivery; Best Buy is moving to curbside pickup only; GameStop is closing stores and directing customers to curbside pickup or ordering products online; CVS has eliminated delivery fees for medicine and is offering free 1-2 day delivery for medicine and everyday essentials; Home Depot is offering free 1-2 day delivery on most items. DICK’s Sporting Goods is offering curbside contactless pickup; Office Depot is offering curbside pickup in most stores; and PetSmart expanded their online purchasing and store pickup capabilities and launched a curbside pickup program.
In addition, the National Retail Federation notes that smaller retailers are making many of these same moves to adapt to the current crisis and connect with their customers. Smaller retailers are promoting gift cards, offering discounts on certain stock, cutting shipping and delivery costs, providing local pickup and delivery, and actively reaching out to customers through emails and social media. As consumers have been heavily taking advantage of these new services, they may become a mainstay in many of these businesses’ operations.