A Period Of Recession: What is Happening to Businesses?

“This is a period of recession and an opportunity for businesses to shift towards digital,” said Ben Oberg to his Instagram audience as the U.S. is currently promoting self-isolation and quarantine, following 13,789 cases since last Friday. As a self-made millionaire and one who dubbed ‘the Robin Hood of Business Marketing’ by Markets Insider, Ben Oberg’s advice rings true to the current business industry and the declining market.

The situation with the coronavirus has been reported to be the “worst economic crisis” since the Great Depression by the International Monetary Fund (IMF) due to the immense crash of the market, decrease in consumerism, and a lack of business opportunities. With countless businesses closed or temporarily pausing operations, it is evident that the business industry is experiencing a huge decline in the market. On the other hand, the coronavirus has encouraged many corporations to shift to international marketplaces, such as online marketing or gaining popularity through advertising on social media platforms. Since consumers are limited to their houses and their internet resources, businesses need to shift gears to an online presence in order to reach buyers.

Businesses that have adopted this trend faster have gotten better sale results. For instance, large fashion corporations including H&M, Puma, and Hugo Boss have been some of the first to find sales pivot towards online consumerism. While H&M sales decreased in stores worldwide, their online sales grew by almost a third. Other businesses, such as Zalando, have dedicated to digitalize their stores for different regions.

“I think that I’ve discovered a lot of online stores popping up on Instagram. Since everyone is staying at home, buying stuff online is much more common. For me, I found myself scrolling on TaoBao a lot,” said Sharon C., an AISG freshman.

According to CNBC, they reported that “e-commerce spending in the U.S. is up more than 30% from the beginning of March through mid-April compared with the same period last year, according to market research firm Rakuten Intelligence.” Due to recommended the quarantine by authorities, consumers have spent more time browsing online. Thus, e-commerce stores have experienced an immense spike in sales. Specifically, sales data have indicated that consumers have spent more money on the entertainment industry’s products, such as music, films, and books, but continue to stockpile for groceries, home equipment, and electronic devices.

In the end, businesses that have observed the market trend and shifted to online platforms have had better chances of survival. It is important for business corporations to always keep an eye on the changing economy and start adapting.