Moves to begin reopening the economy have to be carefully planned. With the closure of brick-and-mortar stores, new customers flocked to eCommerce sites. However, eCommerce was always a small portion of total retail sales; in 2019, 16% of total retail sales were made online. We could see that number jump to 22% in 2020. So how do we start to reopen the economy?
A recent poll by Adweek shows that customers may be hesitant to return to stores even if they do reopen soon. In the ever-increasing digital landscape, an eCommerce future might stick. Apparel stores, already one of the hardest hit during the pandemic, may continue to face uncertainty as stores reopen. Surveys indicate ambivalence toward visiting stores in-person; foot traffic reveals different data, reports the Washington Post, as out-of-staters traveled to Georgia to enjoy sit-down restaurants and hair cuts.
Reopening the economy will come in small steps.
Anindya Ghose, Heinz Riehl Chair Professor of Business and Director of the Masters of Business Analytics Program at NYU’s Stern School of Business, studies internet marketing, mobile marketing, digital analytics, social media, and more. He joined NetElixir as our first expert presenter as part of our Reimagine Tomorrow webinar series. Part of his presentation covered how technology, AI, and data science monitor and predict the spread of the coronavirus. Based on his research, he also discussed considerations for reopening the economy based on how consumers frequent retail locations.
Why Reopening the Economy Will Be ‘Experimental’
In considering reopening the economy, Professor Ghose warns that we have to be careful and assess the risks. “Gains we accrued over last weeks of isolation can be undone,” Ghose says if we open too early.
Asymptomatic people constitute between 52% and 86% of cases. They can easily continue to spread the coronavirus if we open too much too quickly.
Ghose’s considerations take into account the probability of exposure to the coronavirus (by looking at the frequency of visits made to the business and the level of contact within that space) and the length of time on average someone would spend within that business.
For example, sit-down restaurants could pose a high threat of infection rate. Restaurants and bars draw large crowds who spend a few hours on average within these confined spaces. Thus, exposure risk to the coronavirus is high:
In creating effective policies, Ghose recommends looking at epidemic models and accounting for other possible economic interests and externalities. The opening of some businesses will call for the opening of others that may not be the safest move.
So, which businesses should we patronize?
The optimal businesses to open first are those with a low level of contact and those with outdoor areas. Currently, parks have been among the first places to open in many states and beaches are set to open next.
The separation of retail stores, however, will be difficult. The type of retail store often dictates the length of time people may linger. For example, time spent in book, toy, and game stores is often much longer than that of say, flower and gardening shops, Ghose explains.
Professor Ghose presented data which showed that restaurants are open, but at a much lower capacity than pre-pandemic. There is also little economic activity in shopping malls due to the risk of exposure.
Ghose also believes that we “could still see natural, organic social distancing,” even as more businesses open in the future. Businesses could temporarily be at 30-40% of their pre-pandemic capacity until a Covid-19 vaccine is produced. Reduced capacity could be a combination of people willfully social distancing, as well as people not being allowed to enter as frequently as they desire due to mandatory reductions.
Reopening the economy is a balancing act, as described by McKinsey, but planning ahead can lead to inspiring innovations.
Innovations During Times of Crisis
As the saying goes, necessity is the mother of all invention. And Ghose says, “This pandemic is as big a necessity as it gets.”
The SARS crisis led to an ecommerce boom in China. Ghose says that there was no meaningful ecommerce landscape before 2003, but after the SARS outbreak, there was a boom in Asia. We have already seen the coronavirus shift the ecommerce landscape and drive more consumers to online shopping.
Digital achievements will also speed up – and we have already seen the digital landscape rapidly evolve and grow. Brands will continue to connect with consumers via social media and their ecommerce platforms.
As the coronavirus continues, people may be more willing to use data to ensure their safety. Thus, location data from mobile phones will help in not only monitoring the spread of the coronavirus, but giving people access to retail deals near them.
Ghose predicts, “Mobile, online, digital will continue to play a big role in the retail space.”
The next expert in our Reimagine Tomorrow webinar series is Professor Jerry Wind of Wharton School of the University of Pennsylvania. On Thursday, June 4 at 2 PM ET, Wind will present Opportunities in Times of Crisis. Join the conversation on social media by using #KnowledgeInspires.
Our partners at BWG Strategy present Real Time Data on eCommerce Sales and Online Shopper Behavior on Tuesday, May 19 at 11 AM ET. Founder and CEO of NetElixir Udayan Bose will discuss a path to a successful economic recovery and the continued impact of the coronavirus on ecommerce sales, online shopping behavior, and hot products.
Our Covid-19 Updates Webinar series can be viewed in its entirety. Our fifth installment, Road to Recovery – Real Time Data on eCommerce Sales & Online Shopper Behavior, will air live Thursday, May 21 at 2 PM ET.
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Learn More about Ecommerce Updates During Coronavirus
You can join the conversation on social media using #NxInsights.
For further reading, you can see our prior retail analytics updates on retail ecommerce and online shopping behavior:
- Reimagine Tomorrow: Meet Our Speaker, Anindya Ghose, from Monday, May 11
- Digital Learning in a Virtual Classroom, from Friday, May 8
- Resources to Continue Navigating the Coronavirus Crisis, from Wednesday, May 6
- In Honor of Teacher Appreciation Week 2020, from Monday, May 4