Social distancing. To many, this term had no real significance as recent as 4 months ago. To all, this term is the strategy used for slowing the spread of COVID-19 across the globe. It’s a simple strategy with a critically important goal — distance yourself from one another and you can, hopefully, help prevent the transmission of contagious diseases.
From a business perspective, social distancing will put significant stress on companies — some past the breaking point. ABC News is reporting today that many major airlines could go bankrupt by the end of the year. Goldman Sachs is predicting that GDP could contract by as much as 5% in the 2nd quarter. Municipal and state governments have implemented strict restrictions on various non-essential businesses and some have introduced shelter-in-place requirements.
As a society, as a culture — how we transact is constantly evolving. Sometimes slowly and sometimes quickly, but constantly evolving. The spread of COVID-19 and the practice of social distancing has forced this evolution and companies that haven’t implemented an e-commerce strategy will now be left behind for a minimum of a few weeks and potentially up to several quarters.
In 2019, global retail revenues were expected to be around $25T, with e-commerce making up ~14% or $3.5T. By 2022, the percentage of global e-commerce revenues is expected to be ~22% of overall global retail revenues. That means, in the next two years — between 1 out of every 4 and 1 out of every 5 retail dollars spent in the world will be spent online. We’ve come a long way from the days off trying to convince people that it’s generally safe to enter your credit card information online.
Companies with an e-commerce presence have been unknowingly preparing for this moment for years. Live chat, text messaging, and even to some degree — video calls, all allow businesses and customers to interact with each other in real time and provide quality customer service without the need for in-person human-to-human interaction. Almost all payments are made digitally, with a growing number of payments made with payment services like PayPal and AmazonPay, the concern about viral transmission through cash is almost entirely eliminated which protects both employees and customers..