The economic shut downs that were put forward to minimize the spread of COVID-19 have impacted every inch of the global economy, from the manufacturing of products and delivery of services to the channels through which we then consume these goods and services.
For the past few weeks, we’ve actively and at times forcefully searched for ways to go about our “normal” routines with the least amount of physical human contact possible.
Big tech companies such as Google, Amazon and Facebook have proven to be essential for us during these times. We’ve remained connected with friends and family through Facebook Messenger, Google Hangouts and Facebook’s WhatsApp. Kids have remained connected to their teachers through Google Classroom and many of us have spent countless hours on Google search engines and YouTube to stay up to date with the latest news.
For companies like Amazon, the COVID-19 crisis has accelerated an online shopping trend that started years ago. For quite some time, the total market share of U.S online retail sales has been climbing. In fact on February 2019, online retail sales surpassed brick-and-mortar sales for the first time in history as reported by the Commerce Department (February 2019). The most recent U.S. retail sales report for the month of March was no exception – “Non-store retailer” sales accounted for 14% of the total, compared with 12.8% for “General merchandise store[s]” - Commerce Department (March 2020).
“It’s seen such an incredible demand, that about 3 weeks ago they [Amazon] announced that they would have to hire an additional 100,000 more employees” - Mark Mahaney, RBC CM Internet Analyst.
This health crisis has taken no prisoners, creating headwinds for all sectors of the market, including technology. On April 14th, RBC hosted a podcast with Internet Analyst, Mark Mahaney where he discussed both the opportunities and challenges facing big players like Amazon, Google and Facebook. Please click on the following link to listen to Mark Mahaney’s 10 minute interview: How Big Tech is using a Downturn to its Advantage.
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