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.

Go deeper

Coronavirus forces Hollywood into uncharted territory

Illustration: Sarah Grillo/Axios

The traditional buffer that protects movie theaters from being undercut by streaming may be temporarily collapsing as Hollywood tries to salvage releases that would've otherwise been lost during the coronavirus epidemic.

Why it matters: The 90-day theatrical window — the period of time typically allocated to theaters to air movies exclusively before they go to streaming — gives theaters an edge over streaming services and helps them attract movie fans in-person.

Virus spread emphasizes precariousness of gig economy work

Illustration: Sarah Grillo/Axios

While a growing number of white collar companies are asking employees to work from home, gig economy companies seem to be doing little to protect workers in the face of coronavirus — though pressure is mounting for them to do more.

Why it matters: While engineers and business managers at companies like Uber and Lyft can bring their laptops home and access corporate health resources, the independent contractors who ferry passengers, hot meals and groceries, cannot. This highlights painful differences between corporate "haves" and "have-nots."

Instacart plans to hire 300,000 more shoppers in coming months

Kaitlin Myers, an Instacart shopper. Photo: Denver Post/Cyrus McCrimmon

Instacart, the grocery delivery company, plans to hire 300,000 new workers to pick up and deliver orders to customers in North America over the next three months, more than doubling its current staffing.

Why it matters: Delivery services have become crucial for Americans as the coronavirus crisis forces many to stay at home. Instacart says order volume has grown by more than 150% year-over-year in the last few weeks, with the average customer basket size growing 15%.

Go deeper: The gig economy's coronavirus test