Coronavirus: The Business Winners and the Losers

 Coronavirus. The one phrase that has haunted the ears of every American for the past few months. Every conversation, shopping experience and online interaction inevitably shifts to this dreaded phrase. Although not completely unprecedented (the Spanish flu of 1918) Covid-19 has caused a social reaction greater than most Americans have ever experienced in their lifetime.

Whenever the greatest economy in the world experiences widespread, life altering events, supply and demand dictates winners and it dictates losers. Some companies walk away with billions while others struggle to stay afloat. So, what exactly have been the effects of the Covid-19 on the American market?

The Losers:

Restaurants and Entertainment – Businesses hit the hardest by the coronavirus are those that require in person interaction amongst a group of individuals. Restaurants and entertainment companies were amongst the first to be required to close their facilities in order to reduce the spread of the virus. Most restaurants have tried to adapt by utilizing mobile or drive in services. However, according to the National Restaurant Association, more than 3 million jobs and $25 Billion Dollars in sales were lost in the first 22 days of March.

Airlines, Hotel and Travel – If you’ve visited any of the major airline sites in recent weeks you will have noticed that flights are cheap, dirt cheap. Airlines have seen a major drop in overall sales. According to a statement by the United Airline’s President Scott Kirby; net bookings to overseas continents such as Europe and Asia have seen a 100% bookings reduction while domestic flights have dropped by 70%, according to a combination of new bookings and cancellations. However, most travel organizations have weathered similar storms before (2001 and 2008) and feel confident that they can absorb the impact.

Healthcare – In my opinion, this category is a double-edged sword. Though you could argue that private healthcare institutions have seen a rise in patients, screenings, and doctors’ visits, which in turn leads to an increase in revenue. The hospitals were shown just how poorly equipped they were for something on this scale.

The Winners:

Shipping and Logistics – The Corona Virus has pushed shipping capabilities to the limits. With many product categories increasing as much as 54% in a very short time frame, shipping companies have seen a massive increase in demand. Some companies such as UPS and the Post Office had to lengthen the amount of time it would take for a package to arrive. One difficulty in this surge of sales has been global logistics. Major shipping carriers have been battling for airline space, both leaving and entering the United States. Import and export products have seen many delays, shipping errors, and lost packages. The status quo of international logistics has been broken, especially as each country has drastically different customs guidelines in response to the Corona Virus. However, despite the setbacks, Shipping companies/carriers (i.e. UPS, Fedex, USPS, etc.) continue to weather the storm and although delayed, products are getting delivered. Fulfillment and Logistics companies who support E-commerce business have also seen much success as there has been an influx of online shopping. Fulfillment centers are an anomaly on the graph of business success during the Corona virus because among many others that are falling, Fulfillment companies are on the rise.

Streaming & Television Services – While some services such as ESPN may be suffering during this time (40% reduction in viewership) most streaming services have seen a massive increase in subscriptions and daily views. The stock price of media giants like Netflix have reached record highs as people continually turn online entertainment outlets to pass the time. 

The Fulfillment Anomaly

Fulfillment Companies on the Rise ­– As many businesses have downgraded in order to cut costs and service, fulfillment companies are starting stages of expansion. During this time of uncertainty, many businesses have moved entirely to online, and those already with an online presence have put all their time and attention into it. AT&T reported having a 27% increase to internet and broadband usage at the beginning of April. Version said that it handled 218,000 terabytes in just 1 day. Because of this influx, online shopping has been high and with the decrease in companies having the capital to hold their product and fulfill it, well…the phone starts ringing at fulfillment companies.

Fulfillment Companies are provided more and more services in order to accommodate the influx of demand. They are trying to adapt to the growing and ever-changing online stores and platforms in order to offer seamless integration. Fulfillment and E-commerce business are seeing the spark to a future a growth and they are doing everything they can to capitalize on it.

What does the future Hold?

Opportunity, Opportunity, Opportunity – Although times are tough, the future is bright. Many E-commerce companies are taking this “forced opportunity” to adapt, stay lean, and find new ways to grow. As many companies start or sharpen their online presence, the demand to support the operation side of their business grows. Now is the time to be innovative, creative, double down time spent in growing online presence, and getting operations to run as lean as possible.  In a world where retail continues to expand rapidly online, Shipping, 3PL, and Fulfillment Companies will continue to be necessary pillars to sustain the weight of that growth.