Updated: Jul 1, 2020
Coronavirus is changing the world in many different ways, from the social distancing, that I firmly believe will be in place after the vaccine and the group immunity, to the decrease of pollution, although the latter is a direct consequence of the “stay at home” measures. That is clear in the present day. This article is going to try to understand how will coronavirus affect the business world.
In order to stop the spreading of the virus, governments all over the world, with some exceptions, have ordered that the population must stay at home unless it is a needed trip to a pharmacy or a supermarket. However, companies, and the economy, could not simply stop like a plug being, well, unplugged. So, the idea was to start doing some work from home. Working from home is something that the world was fully prepared to do, since almost everyone in the western world has a smartphone, internet access and a computer, but something managers were not keen on doing because they felt that if they were not 24/7 on top of their employers, the employers would not be productive. This has forced companies to do that no questions asked. Lucky, most of the companies have managed to succeed being as productive, if not more so, compared to when they were working in the office. Some have even gone as far as making this a rule regardless of the virus being present or not. And these are not small business offices. Companies such as Twitter, Facebook (that is responsible mainly for Facebook, Instagram and WhatsApp), Google, Microsoft, Amazon, Apple, Slack, Box, Dell, Zillow and Square have now made plans to work from home permanently. This companies combined are worth more than then $USD 5.5 Trillion .
This begs the question: if people are not using the office spaces in its full, then is it worth it to have big offices? No, it isn’t. Most of these companies have their own office spaces in some cities such as their headquarters. Apple, for example, built its new headquarters in California in 2017. That cost 5 billion to build. If we take these massive players out of the equation how will the construction market survive? Can it, even? And this also creates a problem for companies that depended on renting to these big companies. Even in the motor vehicle sector, it is a problem. The vast majority of people buy a car in the first place to be able to go from home to work and work to home. If this is no longer the case, then it might be better to sell the car, take the money instead of having it just to have and pay insurance, that is a big chunk of money wasted. If gets to a point where it gets cheaper to Uber from point A to point B for when the employee wants to, say, go out on a weekend to a park.
This is bad news for many companies, but it also is great for companies like Uber. Uber with the ride-share business but one other very big business that where Uber will thrive is Uber Eats, the delivery of food to your home. Coronavirus will also affect restaurants. This is because people do not necessarily want to be between 4 walls with 25 other strangers to have the restaurant experience. They do not need to go out of their house to have that experience now. They can have the exact same food using food delivery services like Uber Eats or Deliveroo. Plus, with Uber buying out Grub Hub, Uber will become the main player in the United States in the food delivery market.
One other industry that is very likely to thrive is DIY companies such as B&Q or Home Depot. The more you use something the more likely it is for that something to break or to start being faulty. With everyone being at home working that will mean that more stuff at the house will start breaking and not working. This will drive you to this type of shops in order to fix whatever is broken. You will see that space that you have reserved for a new shelf that you have always wanted to buy but have never bought and will go out of your way to buy it and assemble it yourself.
With coronavirus, many people that feared using their card for online shopping anywhere faced themselves having to use it in order to maintain their lifestyle or to get things that are unavailable in the physical store if it even is open. Now people have the taste of how easy it is to do that. How easy it is to be on your couch, order something, that something arrives at your house with no problem to you or your card. Amazon, in my opinion will also continue to grow as they already have the full system implemented, the one-day delivery for some items is the peak of that. This is an addictive thing, as any, and, because it is so easy people will continue to do it after the pandemic.
Our world is changing before our eyes and the business world is following as it is always. Some companies will go bankrupt because their business model is no longer what makes sense today, but that has always happened. In the chaos some companies will reinvent themselves and other new and better companies will be born. The job losses that will happen from some bankrupt companies will be compensated by the newer companies and the growth of others. We shouldn’t fear what is coming ahead. Once we get settled all will be good. We just have to get through this rough part of the way while a vaccine is still not a reality.