Covid-19 Pandemic Accelerates American Adoption of Digital Commerce

From ordering groceries to buying cars online, more Americans are adopting digital commerce today than before — a change that will probably outlast the pandemic and become permanent

Image via WSJ, Source: Commerce Department via St. Louis Fed

With lockdowns, social distancing and other effects of the pandemic, more and more American consumers are turning to digital commerce to meet many day to day needs, from online grocery shopping to even medical appointments and classes. Pickup and delivery options are becoming more widespread. This shift may soon become permanent as many Americans find the shift online to be more convenient and less stressful. Avoiding rush-hour traffic to pick up groceries by having them delivered is an example of this.

Shifts from in-person to digital commerce are evident in:

• grocery purchasing

• movie streaming

• restaurant pick up and delivery

• curbside pickup

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How Companies Are Adapting

Image via WSJ, Source: Euromonitor International's Voice of the Industry: Retailing Survey, August 2020

E-commerce now makes up 43 percent of all sales at Macy’s Inc., up from 25 percent before the pandemic. The company is working with Google Inc. to improve upon its search engine results. Macy’s has even added same-day delivery for some online orders.

In September, Whole Foods Market Inc., owned by Amazon.com Inc., opened its first online-only store in Brooklyn, N.Y., to be able to offer more food delivery options. Whole Foods has made pickup an option for all 500 U.S. stores. Amazon Fresh, the grocery store arm of Amazon, has increased delivery by 160 percent since March.

In addition, contactless payment methods have increased, removing the need for swiping or inserting a physical credit card. Both Visa and MasterCard report increased global sales transactions by contactless options. For Mastercard, contactless payment went up from 30 percent last year to 41 percent in the third quarter of this year.

Changes have also been widespread as social distancing measures have resulted in lower gym attendance and a move to home workouts. There has been an increase in purchasing equipment for workouts from stationary bikes to treadmills and more, as well as taking courses and using apps for online courses and bootcamps.

Many of these changes will remain in effect after the pandemic ends, as they have brought convenience that has led to accelerated adoption.

Apple's Ongoing Response to COVID-19

From closing Apple retail stores outside China till March 27 to working remotely and even hosting WWDC online this year, Apple is taking numerous steps to mitigate risks posed by the spread of the coronavirus

Image via Apple

When news of the coronavirus COVID-19’s contagious spread from Wuhan, China to the rest of the world, Apple among other companies with a large presence in China was quick to take action. Now two months later since the Chinese government publicly announced the spread of COVID-19, many areas in China that were closed down have now reopened for business. However, as the virus continues to spread at an alarming rate around the globe, with fatalities, Apple has preemptively closed down all of its retail locations from Apple stores to associated warehouses outside of China till March 27th of this year. This shut down may last longer if the situation does not improve. More than 60 other retailers have also temporarily shut down to stop the community spread of the coronavirus, including well known and popular retailers from Nike to Sephora, L.L. Bean, J.Crew, Bloomingdale’s and more, according to Business Insider. Given the evolving nature of this situation, Apple has also issued a statement available on the home page of its website Apple.com.

“Our retail stores are closed until further notice. We are committed to providing exceptional service to our customers. For purchases with fast and free delivery, shop here on apple.com or the Apple Store app. For service and support, go to support.apple.com or call 800-275-2273. We look forward to seeing you soon.”

— Apple

Image via Apple

Apple’s Worldwide Developers Conference (WWDC) will be held online only this year and be entirely digital. Numerous other large events from SXSW to football games have also been canceled as organizers and local government aim to prevent the easy spread of the virus in community settings.

Apple’s stock AAPL took a hammering with the advent of the coronavirus COVID-19 in mid February, which the company forewarned in its investor guidance report earlier this year. Apple is not alone in facing this crisis, as the effects of the spread of the coronavirus COVID-19 has led to a shutdown in operations for many companies worldwide. Stock indices from Dow Jones to the NASDAQ initially plunged in response, with concerns of a potential economic recession underway. The effects of being part of an interconnected global economy with its upsides and downsides, could be felt across all stock indices.

The Federal Reserve has cut interest rates down to zero and injected capital into the economy to prevent this. Other economic measures in discussion include a stimulus package to provide some income for Americans who are unable to work during this period as areas for community gatherings are being shut down to prevent the virus’s spread; and a potential payroll tax cut. WSJ reported that the federal government seeks to send $1,000 checks to Americans as part of the $850 billion stimulus package proposed by the White House. The White House also released its guidelines for self-care and protection against the coronavirus, in accordance with the Center for Disease Control (CDC) guidelines. Individual states are also taking measures such as delaying collections on late bills for utilities in colder regions of the country such as Vermont to ensure residents have access to electricity and heat, and requiring “shelter in place” to restrict the spread of the disease in the San Francisco Bay Area. Stocks have now rebounded with news of a potential stimulus plan, with the Dow Jones increasing by as much as 1,000 points.

Apple’s stock has rebounded since then, showing an uptick as of March 17, 2020.

Companies like Google have moved their entire North American workforce to working remotely to prevent the spread of the virus. Google offers tips on productivity and numerous free tools to encourage collaboration and prevent isolation. Remote work has its challenges, but many companies ranging from Amazon to Twitter, AirBnB, Facebook, Microsoft and more are moving their workforce online as best as possible, according to CNN Business. Apple has also been making this shift, although it has proved challenging in some areas that require on-site work. Apple has also been rapidly updating its remote learning and device management options.

While the virus spread seems to have slowed down both in China and South Korea where the highest numbers of cases were initially reported, COVID-19 continues to spread around the globe. John Hopkins University’s Systems Science and Engineering (CSSE) reported over 196,639 confirmed cases, with 80,840 recoveries and 7,893 deaths as of March 17, 2020. COVID-19 has been declared a global pandemic by the World Health Organization (WHO) given how easily the disease is spread and since there is no known cure yet. The first clinical trials for a vaccine developed by Kaiser Permanente are now underway in Seattle, WA, according to CBS News. Scientists worldwide are hard at work on developing a suitable vaccine.