NEW WORLD NORMAL

3 Trends That Could Reshape the Postpandemic Economy

October 22, 2020



Thanks to our friends at Morningstar for putting out a useful explainer on what the economy after the coronavirus subsides could look like.

 

Here are the greatest hits from the piece.

 

The three trends, according to the article are –

 

  1. More people working from home;
  2. Impact of social distancing on travel and restaurant industries; and
  3. Growth in e-commerce and digital entertainment.

 

So basically, we’re sitting on the couch with a laptop pretending to work, chomping on burgers from DoorDash while we binge Cobra Kai on Netflix. 

 

We’ll get into some bullet points on each of these trends below:

 

  1. Shifting workplace patterns

Morningstar estimates 9% of the workforce was working from home before the pandemic; by 2024, 13% of the workforce will be WFH.  This is a 44% increase over a five-year period.

 

The three industries benefiting from WFH:

 

  1. Communication. Think Zoom and Slack.
  2. WFH tech. Companies making tech we need to work from home like Citrix and DocuSign.
  3. Internet security and architecture. Companies like Cisco and Juniper that make the pipes to support increased bandwidth and throughput from everyone going online.

 

  1. Travel and restaurants

This paragraph from the article sums it all up for us:

“The shutdowns and requirements for social distancing that took effect earlier this year led to a drastic reduction for many services, including dine-in restaurants, hotels, air travel, and large events. Commuter traffic dwindled, airline traffic plunged as both business and leisure trips were canceled across the board, and hotel occupancy dried up to the lowest levels ever recorded. Scheduled vacations and destination trips were revamped to staycations or shorter car trips to rental properties that afforded families the ability to maintain social distancing. Cruise lines canceled entire voyages as the spread of COVID-19 on ships garnered headlines around the world.”

 

Regarding restaurants, its fairly simple.  Takeout is up and eat-in is down.  Demand for pizza delivery surged as much as 20% just by the end of March and has continued gaining.  By the end of June, eat-in restaurants’ revenues remained 40% below prepandemic levels.

 

  1. E-commerce and digital entertainment

From February through the end of September, there was a 22% increase in sales for online retailers, and overall retail sales actually increased 7%. Top areas of online consumer spending included:

  • Food and other household staples, which boomed early in the pandemic as consumers hoarded.
  • Electronic and technological infrastructure, from employees WFH.
  • Supplies for home improvement projects, lawn and garden, and home entertainment, which increased as consumers found themselves stuck at home with the time to pursue tasks around the house.

Thanks for your attention.  This was a long one but hopefully not TL;DR.


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