UPDATE 12/22/2021: Unbeknownst to me at the time I first wrote this,
Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, stated that the impact of COVID-19 would be so great that the world requires “a Great Reset.” He makes many arguments similar to mine here. I didn’t know this existed when I wrote this post in July 2021.
In my freelance blogging business, I deal with mostly online entrepreneurs who have a website-driven business model. Ever since the pandemic hit, all my clients have been taken off-guard by the fallout. It’s not just that all the numbers in online business go down; some numbers go up too. The one consistent pattern is that nobody can predict what’s going on, and everybody wants answers.
For those of you in eCommerce who are also wondering what’s going on, I can provide some clues. I can’t provide definitive answers, and part of the clues will point out why. My purpose here is to lay out the mind-boggling scope of the pandemic’s impact on business.
The bottom line is that the economy is largely a chaos system. Chaos systems are huge, complex systems where small changes can cause huge ripple effects. The mark of chaos systems is that it is very difficult to predict what effect a given stimulus would have. Meanwhile, a global pandemic is also a chaos system, as natural phenomena with worldwide reach are wont to be. The result: The economy interacting with the pandemic is the front between two chaos systems, not just one!
But in the first place, there are not only people missing from the work force, but people missing from the mall. They are not shopping, or what shopping they are doing is bare necessities, not discretionary spending. They are not traveling, they are not buying tickets to anything, they are not being busy. So they are not stimulating business.
COVID-19: The numbers impact more than you think!
Popular media tends to focus on just the deaths in a pandemic. And those numbers are grave, but there’s more to the story. In the United States, we’re past the mark of 600K deaths. But, we’re currently at 33.8 million cases! Those cases impact the economy too. A COVID patient is hospitalized like this:
That leaves you flat on your back with a ventilator. This means you also miss work, and miss out on the rest of life while you’re hospitalized. You are not buying things then. Beyond that, even after you’re “over” COVID, you still have “long COVID,” with long-term effects which drag on for six months, and possibly leaves behind lingering symptoms for the rest of your life. That can include: “from brain fog and hallucinations to tremors and tinnitus,” impacting 10 of the body’s organ systems.
Now on top of that, count the emotional impact. All 600K deaths from COVID in the US left at least a few grieving relatives who had to handle an estate and attend a funeral, and have thus missed out on a chunk of life activities. Add to that, for all 33.8 million US patients who have COVID, there’s at least a relative who was impacted too. Somebody else had to take over childcare, or sit with their loved one in the hospital, or take up two jobs to stay afloat until the other breadwinner returns to the workforce. Some elderly parents now need a caretaker. Some grandparents who were the family’s babysitter now can’t fulfill that position.
Are you seeing why your traffic numbers are down now?
The US population was only 328 million in 2019 – before COVID. Out of 328 million, 33.8 million are either dead, hospitalized, incapacitated, or at least functioning at a lower level from how they were before. That’s nearly 10% of the US population! Numbers are similar around the world, sometimes even worse. But we focus on the US because that’s where most of the eCommerce retail activity comes from.
Even this isn’t close to the whole, big picture. An updated source at Nautil.us says that an estimated 21% of Americans have been infected with COVID, as of January 2021. So the estimate could be double what I’m saying here. But even just sticking to the confirmed cases, we’re at 10% sick.
You don’t knock out 10% of the population and not see a traffic dip.
The first wave of impacts from COVID losses
We’re still not done measuring the full scale of COVID’s impact. We have more people whose lives have variously changed because of COVID:
- People whose elderly relatives died and bequeathed them property or money, which means they don’t have to work anymore.
- Parents with small children who couldn’t attend school or daycare because of the pandemic, so needed to pull an extra parent to sit home with them while they home-school.
- People who have switched from a nine-to-five occupation to being in business for themselves, so they quit the workforce, but not the economy.
- People who threw in the towel and retired early, removing themselves from the workforce.
- All the people who worked in industries which have all but died off during the pandemic.
That last part is worth underlining. Among the many industries crippled or shut down by the pandemic, the top industries are hotels, performing arts, home furnishings, restaurants, entertainment media studios, dental offices, apparel, tourist entertainment, and transportation.
You see what we mean about the chaos effect just by looking at that list. You would expect movie theaters and travel agencies to suffer. But home furnishings, during a period where everybody is encouraged to stay home? Yes, but furniture is a discretionary purchase; your shabby nightstand can go on doing its thing in your house for another 2 years until you get ahead of the money again. You’re not entertaining company, so refinishing the basement into a home bar is less of a priority.
Likewise apparel, which is not something people consider even though it’s an obvious demand gap. You’re not traveling, you’re not going out to nightclubs, you’re not dating, and sometimes you’re working from home. So those ratty old sweatpants we’ve all been hanging onto just keep getting worn over and over. Nobody is shopping for clothes, or at least they’re not buying much besides basic outfits.
Of course, the lost jobs mean that even if you’re perfectly healthy and managed to dodge the zombies all this time, if you’ve lost your job, you’re also not spending much money beyond the basics. And the latest news says those jobs may not be coming back, ever, because companies have down-scaled defensively.
Now how much is the COVID impact? While there is bound to be some overlap between casualties, temporary illnesses, temporary inconveniences, and lost employment, we can estimate another 9.5 million people out of work, according to the latest labor statistics.
The strange upticks during the pandemic
Not every industry has seen gloom and doom numbers. A while back (November 2020, in fact), I wrote a forecast piece for industries likely to either bust or boom during the pandemic. Most of that has held true, more or less.
If you need a really underlining image to emphasize both what a stupid species we are, and what a sad state the Coronavirus has reduced us to, look no further than the “fake fans” phenomenon. Sporting events have continued on undaunted, merely filling their stands with cardboard cutouts of spectators and piped-in recorded cheers.
No, wait, it’s worse than that. “Some MLB teams are giving fans the chance to ‘attend’ games this season by purchasing a cardboard cutout of themselves to be placed in the stands.”
What a sick world. Pardon me while I go into the woods and scream at the top of my lungs for a while.
Another unexpected market surge is anything collectible. This extends beyond the expected precious metals, coins, and currency. Collectible trading cards and card games, comic books, stamps, toys, memorabilia, even vintage electronics. All of that old junk is just sailing through the roof in value. There’s two things happening here: (1) People who still have income have fewer options to spend it, and (2) people have less faith in the economy, so rather than hold money they’d rather cash it into material goods which they trust to hold value.
Naturally, there’s a cryptocurrency boom as well. This isn’t so unusual, because people diverge into non-currency value items whenever the economy takes a whoopsie. But this time around, the other pandemic forces at play are sharpening that effect.
We’re also seeing a spike in grocery and cookware prices. It’s as if an entire generation just rediscovered the kitchen. I know I’m just a sample size of one, but here in Iowa two years ago a 10-pound tube of hamburger was ~$20; we just saw it for $50. God knows what the price of hamburger is outside the agricultural heartland. By this report, retail ground beef prices have hovered around an average of $4/pound.
So why are we heading to $5/pound in Iowa? COVID hit the meat-packing plants here. In other meaty news, Tyson Foods had a huge scandal related to piss-poor COVID management in their meat-packing plants. Ostensibly Tyson’s defense was that keeping the plant open, infection be damned, was essential to feeding Americans, but in fact they increased exports to China seven-fold during 2020. This also happened in Iowa and affected local food prices.
Again: Chaos system! No telling what’s going on where with who. No way to predict which way to turn. Everything’s discombobulated and caddywumpus.
More chaos: “The Great Reshuffling,” as people hop jobs. See, people scrambling for survival in a pandemic have less to lose, so they take bigger risks and some of those pay off. Resulting in a frantic amount of movement in the job market, even if it’s still a zero-sum game.
Lucky for I, Penguin Pete, the eCommerce industry is actually enjoying a boom overall. Rather than gear up in masks and disinfectants to go to the store, people are preferring to stay home and order stuff online. Instead of face-to-face retail, the jobs are moving over to the warehouse and delivery industries.
eCommerce relies on just one thing: Google
Naturally, I have a bit of survivor’s guilt. All around me are people going down in flames, and I’m soaring higher than ever. Since eCommerce depends on online traffic, consumers find your online store via Googling. And my job, which is putting a bunch of keyword-dense content on your website, is all about attracting those Google searches.
So for some of you out there, if you’re wondering why I’ve raised my rates and am a looooot more picky about which clients I take on, this is why. Under normal circumstances, writers get paid in dirty birdseed, because theirs is one of the least-respected trades in all industry. The pandemic has added a zero to my paycheck, but just one, because even now, people act like paying for writing is this ridiculous extravagance.
But we get back to the beginning of this post now: I have clients, they have eCommerce stores, and they’re asking where the hell the traffic is. Well, I’m writing just as well as I ever have.
But I’m doing it for an audience that is about 80% of its former size.
And oh, by the way, all that “return to normal” and “end of the pandemic” talk you’ve heard? Forget it. Collectively as a nation if not a species, we have behaved so stupidly that COVID variants have gained a foothold. There are now alpha, beta, delta, and gamma versions of COVID. We weren’t done dealing with the first pandemic, so now we have five pandemics.
I don’t even have words for this pic.twitter.com/vrCnrfhnfb
— philip lewis (@Phil_Lewis_) July 22, 2021
We still have people refusing to get the vaccine because “conspiracy muh freedumz!”
God. Help. Us. All.
UPDOG 09/22/21 : There is very little written so far, in which somebody tries to take a step back and examine the existential effect of a pandemic on society. This excellent piece “The shifting sands of COVID and our uncertain future has a name – liminality” is a great thought on the matter.
