For many of us, the term “stay-at-home economy” might feel relatively new and even novel, but it’s been a long time coming.
The rise of e-commerce, D2C models, digital on-demand entertainment, social media, remote working tools, and digital education have been fueling its growth and development as early as 2008.
Consumers in this new economy work, shop, socialize, and get most of their entertainment at home. This new lifestyle system is a result of digital access with convenience, efficiency, and sustainability in high demand.
The stay-at-home economy has been supercharged by all the social-distancing adjustments we’ve had to make:
- More people are working from home
- Businesses are pivoting to D2C models
- Businesses are shifting their offerings to digital
- E-commerce experiences are evolving at unprecedented rates
- Online shopping is moving from a convenience to a necessity
So far, one thing has become crystal clear: The stay-at-home economy is here for the long haul and corporations will have to adapt quickly to stay relevant.
In order to really understand how you can future-proof your business to thrive in the new “economic normal”, it’s useful to understand how we got here, what the impact has been so far and what it all means for the future.
Let’s start by taking a look at some of the historic events that helped get us to this point.
How we got here.
1994-2005: E-commerce 1.0
When it comes to e-commerce and online shopping, things really started to take off during the mid-’90s.
- Online marketplaces like Amazon (1995), eBay (1995), and Dell (1994) started making online shopping more mainstream.
- Online payments got easier with the launch of PayPal’s e-commerce payment system.
- Alibaba is launched as an online marketplace with over $25 m in funding.
- Google introduces Adwords as a way to facilitate e-commerce businesses to advertise and reach new clients.
- The Severe Acute Respiratory Syndrome (SARS) epidemic was one of the driving forces that helped boost e-commerce platforms like Alibaba
- in China.
- Amazon launches Amazon Prime, a membership scheme that offered perks like 2-day shipping and discounts at a fixed yearly rate. This was a way to build loyalty among clients.
- Esty, started enabling small businesses and crafters to sell their products to a wider audience and create an online community.
Each company was revolutionary in its own way, offering varied stock, strengthening the online community, showing customer reviews, and in many cases enticing clients with more competitive pricing than brick and mortar stores.
Platforms like eBay, Alibaba, Etsy and later on Amazon, were among the first to enable anyone from anywhere in the world to sell products online and develop a new type of business run mainly from home. They represented the start of the sharing economy.
With more people running businesses from home and more people shopping at home, you might also say it was the start of the stay-at-home economy.
2006 - 2010: The next generation
E-commerce storefront platforms started to emerge around this time, making it easier for vertical brands to make and share their own merchandise:
The financial crisis and the rise in unemployment seemed to boost the sharing economy as well as the (then emerging) gig economy. Some prime examples include:
- Airbnb (2008)
- Task Rabbit (2008)
- Uber (2009)
- Flash sale retailers like Gilt (2007) and Groupon (2008) were also launched around this time.
- D2C brands like Bonobos (2007), Stance (2009) and Warby Parker (2010) also started hitting the scene with a fresh new take on e-commerce.
- In 2007, Netflix started streaming services.
These companies broke free of old business models by helping people find new revenue streams and offering new alternatives to traditional workplaces. It was the start of the gig economy, as we know it today.
2010 - 2020: The culmination of it all
During this decade, we really start to see an evolution from the original e-commerce 1.0.
Product development, payment options, customer feedback loops, mobile shopping, and general customer experiences were all taken to the next level.
Google Wallet (now known as Google Pay) was launched as a peer-to-peer payment service that could be used by mobile phone or computer.
Stripe was also launched in 2011, as an international online payment option for businesses.
D2C companies start having great success by connecting with clients completely online, using sustainable practices and making products more accessible than ever before:
At around the same time, companies start taking the gig economy to new heights by connecting people with the skilled laborers and talent they need:
By 2017, e-commerce growth was exceeding all expectations with a new Cyber Monday sales record of $ 6.5 bn (a 17% increase from 2016).
As for the global sharing economy, PwC was already projecting an increase of $335 bn by 2025 from $15 bn in 2014.
Where we are today.
The rise of e-commerce, the sharing economy, and the gig economy have been building up to give way to the stay-at-home economy. The Corona pandemic and the accompanying social-distancing restrictions just accelerated the process.
As a result, consumers are forming new expectations and corporations will need to adapt to the new normal. In an article for the South China Morning Post, Liu Xuezhi, a senior researcher with the Bank of Communications described how businesses are coping in China:
“Now many companies have to shift online or increase the technological element of their products and services for survival.”
Although industries like travel, hotel, and restaurants will likely remain the hardest hit during the pandemic, there are plenty of areas of opportunity for companies that offer:
What it means for the future.
Both new and existing businesses will find areas of opportunity in the short term by providing goods and services that will keep us going until the crisis is over. It’s important to note that the relationships and trust built during this crucial time will not be forgotten by consumers.
Here are just a few additional repercussions of the new stay-at-home economy:
“Remote capable” will be the new norm
The lockdown has resulted in more people than ever using technology to keep their lives going (e.g. meetings, studies, workouts, etc.). Now that we all know how convenient it is, you can bet this trend will extend way past the quarantine. The result? More services will be available remotely and more people will be working from home.
A golden age for digital healthcare innovation
Medical professionals all over the world are increasingly using web-services and video-chat. This has made it possible for practitioners to treat more patients in a safer and more convenient way. The services have already begun to expand with companies offering in-home testing kits and wearables to monitor symptoms. Although these measures have started out as temporary, telemedicine will most likely see a boom that will last long after the pandemic is over.
Digital services and e-commerce companies will flourish
Companies like Zoom, Slack and Miro are already seeing significant gains with so many people using them to work and stay connected. Streaming services like Disney+, Amazon Prime Video, and Netflix have also been doing well, with more people depending on them for entertainment.
By that same token, e-commerce platforms, food delivery services, online education, and AI companies have also seen increased patronage. Customers using these services will have developed and increased familiarity with these companies, leading to lasting relationships.
Cybersecurity will be more important than ever
With so many people using online products and services in almost every aspect of their daily lives, privacy, security and the protection of personal information will become a priority. There will be lots of opportunities in this area for tech companies offering cybersecurity solutions.
If you’d like to know more about how consumer trends are shifting in the stay-at-home economy, check out our article 5 Consumer Trends That Will Outlive Covid-19.
The changes we see now will have far-reaching effects on how we fundamentally live:
- Will the 9am traffic rush still exist now that remote working is the norm?
- Will higher education ever need a physical campus if it’s all offered online?
- Is this the final nail in the coffin for brick-and-mortar commerce?
Valuable customer experiences, digital offerings, and D2C business models will all be vital in helping businesses meet new customer expectations and demand. Companies that use this time to future-proof their businesses will most likely be able to adapt and even thrive despite the ongoing challenges and rapid disruptions taking place across all industries.
In this regard, corporate venturing will remain one of the safest ways to experiment, innovate and expand to new markets.
Want to take your corporate startup idea to the next level? Looking for innovative ways to disrupt your industry and tackle new markets? Let’s talk!