Question

Outside of health reasons and government mandates, why are some businesses shutting down temporarily during this pandemic? (Please use economic concepts covered in this course.)

Answer 1

U.S. small business community leaders are extremely worried about the financial effects of the COVID-19 pandemic, but millennial or Gen X business owners are especially optimistic that they can get the support they need to solve the crisis, The MetLife & U.S. The Chamber of Commerce Small Business Index includes a survey conducted between March 25-28 of about 500 U.S. small business owners gaging their perception of the economy.

Some retailers have reacted to the challenge by finding innovative ways to remain relevant. Once coronavirus surfaced there, Nike launched fitness apps in China, resulting in an 80 percent rise in usage over the quarter and a rise in online revenue of 30 percent. A similar movement is being promoted in the USA and Europe.

Small companies are pivoting towards keeping customers. Camp, a new toy chain which distinguishes itself from online retailers by doubling on the physical experience, hosts virtual birthday parties and creates personalized gift boxes now that its five stores have gone dark. Politics and Prose, a renowned bookstore in Washington, was forced to temporarily close, and started streaming online talks with the author and providing a pick-up service on the curbside.

Global brands are looking to China, which is emerging gradually from the pandemic, to see what the future will bring. Brick-and-mortar stores are slowly reopening but face a potential permanent loss of customers to fast-growing online rivals after millions of families have been confined to their homes in a world that is now one of the largest e-commerce markets for months.