Mar 17, 2020 - Technology

Tech shapes a new stay-at-home economy

Illustration: Sarah Grillo/Axios

As the coronavirus crisis forces daily life across the U.S. into a new homebound template, the tech industry is swooping in to reshape how we shop, eat and entertain ourselves.

The big picture: Trends toward e-commerce, delivery services and online entertainment have long been underway, but this moment is accelerating them — and pushing the companies and industries behind them into a new position of dominance.

E-commerce

Online shopping was super-convenient in ordinary times, but it's even better when you're not supposed to leave the house.

  • Amazon announced Monday it plans to hire 100,000 new full and part-time employees in the U.S. to meet surging demand. It also said it's increasing pay by $2 an hour through the end of April.
  • Until recently Amazon was pushing toward ever faster deliveries, but in the current crisis it is reporting some delays, and it's had trouble keeping some heavily in-demand items in stock.
Food

Ordering groceries for delivery has also ramped up, helping with customers’ jitters about staying stocked up with the essentials while avoiding crowded supermarket aisles.

  • Earlier this month, Instacart said that its sales the past week were 10 times higher than the prior week — and 20 times higher in states like California and Washington.

Restaurants are also shifting fast to deliveries and curbside pickups as a way to stay in business and help consumers who still want to order hot meals.

  • According to OpenTable data, on-site dining dropped as of Saturday by 42% compared with a year ago.
  • Meanwhile, food delivery companies like GrubHub and Uber Eats are temporarily suspending commission fees to help smaller restaurants as they work to stay afloat via delivery. They're also rolling out no-contact delivery options so customers and drivers don't have to interact with each other.
Entertainment

With social distancing and new shelter-in-place rules multiplying, Americans are turning even more decisively to digital services not only for remote work but for entertainment.

  • The profusion of bingeable offerings from streaming services like Netflix, Amazon Prime, Hulu and their many competitors offer stuck-at-home viewers a cornucopia of diversion — just as cinemas, theaters, and concert halls are shutting down.
  • Universal announced Monday it would make its in-theater movies available online — abandoning the "theatrical release window" and breaking what may be Hollywood's last taboo.
  • Parents are already struggling with trying to both work from home and manage their kids, but the task would be even harder without iPads, smartphones, Nintendo Switches, and all the other screens in our homes.

Our thought bubble: The longer our public health crisis lasts, the more deeply these changes will etch themselves into the economy.

  • Many brick-and-mortar retailers are already in trouble.
  • Restaurants will be hard pressed to stay afloat doing take-out service alone.
  • Movie theaters can't stay closed indefinitely without going bankrupt.

The bottom line: As one of its side effects, the coronavirus pandemic could seal the fate of the digital economy's off-line competition.

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