Ayman El Tarabishy
President, International Council for Small Business
To put it lightly, the economic impact of the coronavirus pandemic has been immense. As a result, tens of thousands of businesses around the United States permanently closed. There are many more that are still struggling to return to pre-pandemic earnings. Additional long-term effects are anticipated, while interrupted supply chains and stalled economic recovery endeavors rear their heads toward the new dawn of retailers and ecommerce platforms.
There are optimistic signs that the pandemic is nearing an end, thanks to rising vaccination efforts. However, it leaves one to consider the impact on the future of ecommerce through the business pivots that have emerged over the last year.
It is a tale known by too much of the world now. With social distancing measures in place, everyone has had to adjust to a new normal. Operating within this realm, retailers expanded their ecommerce offerings to include online shopping, third-party delivery apps, and curbside pickup accommodations. This seemed like the obvious move on the surface. But what many consumers didn’t factor into these newfound conveniences was the toll behind them.
Retailers needed to pivot to a new, sometimes completely unfamiliar, way of doing business, or else run the risk of losing everything they had worked so hard for. With the pressure to survive by any means possible, retailers quickly expanded their offerings and partnered with tech experts to translate their brick-and-mortar presence to the new world of near-exclusive ecommerce offerings.
For many micro and small businesses, switching to new ecommerce methods was a natural extension of the work they were already doing online through platforms such as Etsy and Shopify. This then became a pivot that paid off in spades.
In 2020, U.S. shoppers spent $861.12 billion online, a 44 percent year-over-year increase. On Black Friday, online sales hit record highs, with Shopify reporting $2.4 billion in sales, a 75 percent growth from 2019. Meanwhile, Etsy recorded a 108 percent increase in sales from November 2019. All told, those who embraced the increasingly digital world pre-pandemic were well-poised to take advantage of the new trends toward ecommerce.
A powerful pivot
Meanwhile, others had to take a different approach. GeniusPack founder Alfred Chehebar launched ObjectsHQ — a direct-to-consumer furniture brand — to keep his portfolio afloat in response to shelter-in-place orders and travel restrictions during the pandemic. The pipeline from travel to furniture is not an obvious path, but Chehebar acted as a true innovator; he used his business savvy to solve an existing problem he had personally experienced. This kind of ingenuity perfectly exemplifies the power of pivoting to a new business venture or model within ecommerce and evolving with demand.
This is not to say the digital pivot ran smoothly for all, however. Even retail giants were not immune to the stressors of the pandemic, with J.Crew, Brooks Brothers, and Belk filing for bankruptcy.
Lord & Taylor, the United States’ oldest department store, took one of the most devastating hits of all. In August, the company announced all 38 of its locations would close. As a result, a historic piece of the U.S. retail landscape was lost. With all roads seemingly leading back to digital offerings, at least in some capacity, Lord & Taylor relaunched in April as a digital-only store, finally pivoting to the reality that many retailers had long embraced.
Looking to the future
The pandemic has made it crystal clear that the future of retail is inextricably linked with a rapidly evolving standard of ecommerce. With the advent of the Internet age, retail underwent its first significant transformation to include online offerings. Pivoting to e-commerce during the pandemic constituted the second act of retail. It begs the question: where should the industry go next in response to a reopening world?
Much like surfers anticipating the next wave, retailers will need to learn to balance consumer needs as they come in. In calmer moments, brick and mortar may reign supreme, but online and ecommerce will be king during rough seas.
A new dance is forming and those who master it will thrive.