17

Introduction

Schools shutdown. Sports suspended. Restaurants dissolved. Malls closed. People frightened. That was the world as the Coronavirus spread all across the globe. “On December 31, 2019, the first batch of cases were reported in Wuhan, China” (Taylor,  2020). After that, normal changed as the airborne disease spread internationally. Normal used to be packed stadiums, rowdy bars, and sweaty gyms, but changed to national emergencies and social restrictions. Things like social distancing, face masks, stay-at-home orders, quarantine, and isolation became the controlling aspect of day-to-day life. After ten months and 51 million cases, those controlling factors have become stagnant, but some aspects of life have adapted for the better, like business.

 

 

In the beginning of it all, 180,000 businesses responded to the chaos by closing their doors to prevent the spread of the virus(Sundaram, 2020). Those businesses could not withstand the economic tolls of stay at home orders and fear people had of contracting the virus. The effects of these closures were represented in the surge of unemployment. According to the Bureau of Labor Statistics, the United States unemployment rate rose to a twenty year high of 14.7% in April of 2020 as a result of the global pandemic (Center for Disease Control, 2020). In addition, ten million Americans were out of work with 6.6 million applying for unemployment benefits. The struggles to earn money during the coronavirus forced businesses to reconfigure their operations. These alterations were seen in the workplace and online marketplace.

Altercations in the Workplace

A. Why Change

The primary functions of businesses are to provide goods and services to satisfy the demands of the general public in a profitable manner, but their role goes beyond that. They maintain social order, especially in capitalist countries. Capitalism provides a platform for entrepreneurs, investors, and firms to improve the quality of life and maximize its value. Equally important, businesses are the driving force in generating prosperity, providing identity, and maximizing resources. The main reason companies are able to sustain a need for the product is the foundation of societal problems they solve. Karl Marx, a german philosopher and economist, “claimed civilized societies are held together by their economic structure”. For all of these reasons, the changes in the workplace brought about by the coronavirus were essential aspects that kept the engine of the world running.

B. Changes Within the Office

The anxiety of obtaining the deadly disease forced people at the corporate level to institute new rules and regulations in order to promote workers to return to work. This began with increasing the level of communication between managers and employees. Employees needed to share their desired changes so that managers and corporate level positions could make the right decisions. One of the main concerns employees pay attention to is flexible sick leave policies since they do not want sick employees coming into the office on the chance their illness is the coronavirus. After sick leave policies, businesses needed to address and prioritize essential parts of the operation to maintain the health of the organization. Reconstructing the design of in-person workspaces needed jurassic changes to withstand operation while keeping the risk of infection as low as possible.

Whether it was retail, tech, or food service, face masks became the major shift businesses had to implement in the workplace in order to carry out work. “34 states and the District of Columbia mediated face coverings” (Landon, 2020), so in most places, it was not optional. In addition, some companies instituted mandatory temperature checks as employees entered the facilities; the Center of Disease and Control lists fevers of chills as symptoms of Covid-19. One revolutionary technology implemented was the use of UV light as an air filtration system. . United Airlines “cleans its planes’ cockpits using handheld ultraviolet C (UVC) lighting technology” (Miller) for its more efficient and effective sanitation measure. More and more companies are requiring mandatory weekly COVID-19 tests to help trace and limit the spread of the virus. In another effort to reduce the risk of infection, companies redesigned the layout of offices to ensure that social distancing guidelines could be met. One way in which this demand was met was through a hybrid, staggered work schedule in which employees who desired to come into the office would do so on alternating days to limit the number of people in the workplace. Furthermore, a majority of businesses across all industries in the world increased the number of people working from home in order to sustain business operations.

C. Changes Outside the Office

For the longest time, businesses primarily prioritized providing in-person workspaces to offer collaboration opportunities between individuals, but the coronavirus generated a transformation in the way work is done. According to a study at Stanford University, “42% of the U.S. labor force is working from home full-time” (Wong). That number is 38% higher than the number of people who continue to work on the premise of their company. Shifting to a remote workforce has preserved the U.S. economy from suffering a more painful recession. One of the main technology platforms that made this happen was Zoom. “Zoom now has around 265,400 customers with more than 10 employees, a number that’s grown 354 percent” (Stephen, 2020). The technology allowed video chat to ensure conference calls and meetings to occur while keeping the employees safe. Innovation instead of complete closure ignited socioeconomic modifications in society. To start, it was found that “remote workers are not only happier and more engaged, but they’re 13% more likely to stay at their current job” (Homewood Health, 2020). A preference to work from home instead of the office emerged and ignited more people to search for jobs due to the satisfaction and freedom that came from working through technology. Consequently, the remote workplace dawned the “boom in urban and rural areas” (Wong, 2020). Eliminating the drive to work allowed employees to be more selective in the place in which they can reside, encouraging workers to buy homes out of the city and in smaller towns and rural areas. All of these adjustments to the business model were a result in the way businesses chose to navigate complex decisions preserving the identity and social order of the country, and world.

The Rise of eCommerce

A. The Shift

Under the new circumstances of stay at home orders, fear of leaving the house, and remote workplace, businesses’ physical establishments lost dramatic amounts of foot traffic that traditionally generate revenue. For example, smaller restaurants have lost tremendous profits because of the lack of employees who travel to work that buy their lunch. In a similar situation, coffee shops have seen a loss of sales due to a reduction in people leaving the house to go to work who would normally buy coffee on the way to work. This effect has caused “More than 97,966 businesses have permanently shut down during the pandemic[…]”, but this is not true for every business across the globe. “By August (temporary closing) had fallen to 65,769” (Sraders, 2020). The main effort that preserved the future of organizations all over the world was the movement from physical stores to the online marketplace and eCommerce. It worked because more and more workers that generated foot traffic are now spending more time on their laptops getting distracted with online shopping. One quote from the Washington Post says “the pandemic has changed that [shopping habits], forcing businesses to embrace technology to move online” (Kelley)Figure 1.3-1: During the pandemic, a majority of money transactions occurred over the computer and telephones rather than in person interactions to receive goods. 

“Remote Work” by PxFuel is in the Public Domain, CC0 / A derivative from the original work

B. eCommerce

Generally speaking, eCommerce is defined as a business model that operates through selling products over the internet. In the United States alone “ecommerce sales soared to a record 44.4% in Q2” (Young). An increase in customer spending online transformed “roles specifically to cater to an increase in digital sales and boost online capacity” (Barclays, 2020). Businesses are investing more time and money into technology that enhances the click-through rate. One new industry that has emerged is the clickstream analytics industry due to the increased use of technology to perform sales as a result of the coronavirus pandemic. This new industry uses “information on industry chain structure, emerging applications, and technological developments” (Chetan, 2020) to advance companies ahead of their competition. In a similar fashion, companies have upgraded website dashboards, advertising strategies, and algorithm platforms to increase digital traffic. The switch to digital ads over physical billboards and newspapers reaches a wider range of customers because people all over the world have the ability to see Facebook ads, Google ads, and other social media advertisements. Performing advertisements online allows businesses to be more global in order to maintain a steady-state level of sales. The retail industry has flourished the most through reinventing its business model to be focused on the online marketplace.

“Selling Online” by Mediamodifier is in the Public Domain, CC0

C. The Retail Industry Online

Dominant retail companies revised their business strategies due to the coronavirus by increasing the flexibility of online grocery shopping. The coronavirus sparked customers’ habits to shift from what they were traditional. Therefore, retail companies are seeing success when providing better online shopping services, like preparing groceries for pick up and providing grocery delivery services. One survey shows “of online purchasers, 34.9% said they’re buying more groceries because of coronavirus, and 14.4% said they started shopping online for groceries due to the pandemic” (Redman, 2020). “And when shoppers did opt to visit a physical location, they turned to buy online pick up in-store or curbside pickup options in droves to minimize contact with others as nerve-racking infection rates persisted” (Young, 2020). Amid the outbreak, companies have even restructured parking lots offering more curbside parking spots to accommodate the people no longer going into stores rather picking up their shopping carts right outside of the store. The change in the stores is seen through the employees whose job is primarily to shop for customers and preparing groceries to be picked up. “Walmart also launched Express Delivery in May, a service that delivers items–including groceries–to customers within two hours”(Schmidt, 2020). Walmart recognized that lives changed during the pandemic, so express and contactless delivery designed with online technology was the solution to satisfy the needs of customers. In a differing industry, gyms and other fitness-related companies experimented with live streaming in an attempt to still provide lessons to customers. “The live-streaming sector grew a full 45 percent between March and April” (Kastrenakes, 2020). At the end of the day, the coronavirus pushed companies to work with people. Businesses could not wait for the pandemic to be over for old consumer habits to resume.

The Future is Delivery

A. Brief History

In the wake of the coronavirus pandemic, the food delivery industry underwent massive growth, but it was only possible due to technological innovations that allow ordering to be made on the go rather than involving a phone call. Beginning in 1995, ordering food included picking up the phone to place orders and specific employees of a business employed to only be the delivery person. It was often viewed as a complicated process that had potential customers heating up frozen pizza rather than picking up the phone. Today’s world has online platforms connected to restaurants that are dedicated to food delivery. “Without paying any additional cost, consumers can now view menus of their favorite restaurants, place an order, and get food delivered to their doorstep”. This has been made possible by DoorDash, Grubhub, (UberEats) and other online ordering portals” (Davidson, 2020).  Technology based delivery services are the ultimate symbol of business moving forward, maximization of convenience.

B. Coronavirus Impact

The global pandemic has ramified needs for food delivery. Primarily, social distancing measures and stay-at-home orders have caused more customers to rely on food delivery to fulfill their desires of prepared meals since restaurants have had to take away their dine-in features. Customers see ordering food as a reward or solution to following government guidelines. “Another factor driving demand for food delivery services is the increased number of restaurants offering home delivery. Since social-distancing measures forced restaurants and bars to close, many have switched to delivery to stay afloat during the pandemic” (Research and Markets, 2020). “Such a service has been touted as being a useful, convenient, and safe means to reduce the risk of exposure to infection sources of the novel coronavirus” (Nguyen, 2020). In the United States alone, the food delivery market experienced “20.2% year-on-year growth experienced” (BeamBox). DoorDash, a premier company leading the food delivery industry, said in “May, sales were up 110% since the beginning of the year” (Guszkowsk, 2020i). This trend ties directly into the effect of the pandemic. Order sizes grew because entire families were ordering in  for lunch and dinner due to stay at home orders. Since the beginning of the pandemic, order prices have risen $3 on average. In the end, the young and growing status of this industry and coronavirus effect leaves it up in the air for present and future companies to continue innovation to take control making it a hot industry to keep its eye on.

C. Future Outlook

Although the vaccine for the virus is soon going to hit the market, generational trends, bullish outlook, and digital wallets are reasons that the food delivery market is here to stay. According to Aric Zion, younger generations, ages 18-29,  are spending more money on delivery compared to all other ages. If this trend continues, the food delivery market will be around for years and years to come. Consequently, the bullish outlook has investors pouring money into the industry. This year alone, Investors put $9.6 billion dollars into companies like Uber Eats, Postmates, and Grub Hub. Also, DoorDash is set to have its initial public offering in the next two years after 2020. “31% said they (investors) planned to continue to invest in the service, suggesting they think the demand for delivery will stick around” (Guszkowski, 2020). Finally, increasing the integration of the digital wallet with smartphone users is going to make ordering more convenient than it is. These trends have “Investment bank UBS projecting that online food ordering may rise more than 20% annually to $365 billion by 2030” (Zion, 2020). Ultimately, the coronavirus impact on customers’ habits and trends has set a strong foundation for food delivery.

Chapter Summary

The coronavirus released challenges on society that have not been seen in the modern-day era. But companies’ ability to adapt their business model and strategies to work around CDC guidelines and societal fears allowed them to survive. Changes outside the office included an increase in people working from home to eliminate the risk of infection while still being able to perform daily tasks. Within the office, changes in office layout increased sanitation, and usage of UV light filtration kept those in the office at a reduced infection rate. Businesses also found survival and success in switching to more technology-based platforms. This included transforming business models to include platforms to customers that allowed them to not travel into stores and restaurants to purchase products and services. This led to a surge in mobile food ordering companies like Uber Eats, Postmates, and DoorDash. Consequently, the coronavirus has sparked changes in businesses that were bound to happen and changes that are here to stay.

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