WASHINGTON — Covid-19 has taken a massive toll on lives and on the healthcare system in the United States, but as Americans try to cope with the virus, they may subtly be remaking the economy as well. More Americans are working from home and avoiding congregating in large groups, particularly indoors, and as they do, they are spending their money differently and creating new economic winners and losers that may well outlive the pandemic.
A look at on-line spending since late September from Rakuten Intelligence shows how spending this holiday season looks very different from last year.
The most basic change this year, of course, is probably in how we are shopping. In 2020, a lot of purchasing has moved online.
So far, Rakuten Intelligence says that online receipts from Oct. 1 to Dec. 6 have increased by 51 percent, compared to last year in the same period. While e-commerce grows every holiday season, that 2020 spike looks truly massive. Last year, e-commerce receipts grew by 19 percent in that period. In other words, the pandemic is adding to the challenges that brick-and-mortar retailers were already facing.
That’s to be expected, of course, with many Americans leery of shopping in person or taking family trips to the mall. But there are even more dramatic changes when you look at the specific areas of online commerce that have grown. They tell the tale of a country that is spending more time at home, and that may be expecting to be there more often in the future as well.
First, there is the task of retrofitting one’s home to hold an “office” or a “classroom” from some households. Those kinds of changes require creating workspaces, perhaps by adding a desk or, in some cases, a more dramatic restructuring. The online purchase data suggest people have been working on those transformations.
Since Sept. 28, sales of furniture and home improvement materials have climbed by 44 percent and 92 percent respectively, compared to the same period last year, according to Rakuten Intelligence. Think of desks and chairs and drywall and paint — all the things that go into making a home into a work environment.
And then consider this nugget released from the Pew Research Center this week: “54 percent of Americans who say their job responsibilities can mainly be done from home say that they would want to keep working from home all or most of the time after the pandemic.” That means a lot of people in those temporary home offices are hoping for a more permanent arrangement in the future.
If those workers get their wish, that will mean less commuting and more office nesting — and the home office consumer segment will be set to continue growing.
Of course, working from home can get lonely, which has led to another change in 2020, a big jump in pet adoptions. The group Shelter Animals Count reports that the number of animals taken into shelters has declined by about 500,000 this year compared to 2019. Fewer pets in shelters mean more in homes and that means more a need for more pet supplies.
This holiday season has seen a 70 percent increase in online receipts for items like pet food, pet toys and accessories, compared to the same period in 2019. And when the pandemic is finally under control, those four-legged co-workers will live on. They are long-term commitments which will likely mean more need for kennels and dog-walkers and pet-friendly apartments and hotel rooms.
In short, the pet supply segment of the economy seems primed for continued growth.
And not wanting to gather indoors has had an impact on how people exercise. Many gym memberships have been frozen or ended with the pandemic, and as winter approaches outdoor workouts have become a test of one’s ability to sweat in freezing temperatures. One big winner: Companies selling the equipment to work out at home.
Online receipts in the area of health, fitness and nutrition have climbed by 122 percent this holiday season, compared to last year. That may not come as a surprise to anyone who has been trying to create some kind of “home gym” in recent months. This summer saw a shortage of weights and barbells available. And Peloton, the company that makes high-end home stationary bikes, announced a 230 percent increase in sales in November.
But beyond the holiday season, or 2020 for that matter, all that buying may have lasting impacts once the pandemic is controlled. Why get in a car to go sweat in public when you have already spent the money to be able to do it at home?
And these data all raise bigger questions. How permanent are the behavioral shifts we’re seeing with these purchases? Will we need fewer gyms in the post-Covid-19 era, which will mean fewer gym employees? Will we need less office space? Will transit systems get lighter use?
Together these shifts could lead to real changes in what the economy looks like once the virus is tamed. And that may mean the quick economic turnaround that Americans are hoping for next year is going to be hard to achieve. A recovery is one thing; a restructuring, even a subtle one, is more complicated.