Turning A New Leaf: These Sectors Should Look Beyond Just "Riding Out The Storm."

For businesses that depend on in-person experiences, the pandemic couldn't come at a much worse time. Hotels, bars, restaurants, airlines, shopping stores, casinos, and malls took a direct hit. They were among the first businesses to shut down as the government implemented lockdown measures to curb the virus's spread.

For example, the retail sector had been struggling financially before the outbreak and has been weather-beaten by online retailers such as Amazon.com Inc AMZN and TJX Companies TJX, which lure customers away with lower prices and home delivery convenience. The rise of e-commerce and discount chains seemed to be the last nail in the coffin for a sector that was already experiencing zombie malls before the pandemic broke out. 

The government's social distancing measures altered shopping patterns as consumers shifted towards e-commerce, which was a safer option — and sometimes, the only option. Department stores that had pinched pennies to stay operational post-COVID sprang a slow drift into oblivion because they did not have the resources and technology to adapt to changing shopping patterns. Small retailers such as hair salons, cafes, and gyms, which typically have less than three months of cash on hand, have buckled under the economic pressure. Apparel retailers such as Macy's Inc M, Gap Inc GPS, and Kohl's Corporation KSS had to furlough tens of thousands of employees.

The pandemic also scathed the hospitality industry. Restrictions on travel and closure of borders meant that travelers could not visit vacation spots and tourist destinations. Of particular note is the predicament of timeshare owners. Timeshare companies suffered an estimated $800 billion in losses, while 4.6 million jobs across the American tourism industry went off the radar. Companies like Wyndham Destinations Inc WYND have faced extreme pressure from consumers looking to cancel their vacation commitments.

To get out of this impasse, timeshare companies, like many in the hospitality industry, have improvised by moving clients' bookings to future dates. Cruise lines such as Carnival Corp CCL and Norwegian Cruise Holdings NCLH reported that cruisers had fully booked 2021 seasons, implying growing anticipation among tourists to start cruise sailing again.

In the retail sector, businesses that downplayed in-person experiences and leaned towards technology and service-oriented models distinguished themselves as clear winners. Service is no longer seen as an appendage of sales or conscripted to generic efforts, such as greeting customers, handling complaints, and managing special requests. Consumers now need more integrated services, such as having certified installers for complex product categories, personal shopping, or technical advice. Meaning department stores may have to operate fewer stores and more technically inclined and service-oriented staff to provide personalized services.

For example, Wal-Mart Inc WMT recorded a 93% jump in its e-commerce sales as customers holed up in their homes turned to online shopping to meet their most basic shopping needs. Home Depot HD, a store heavily dependent on patronage from the service sector, spent $480 million on additional compensation for its employees in a period where other department stores were relying on government stimulus to get by.

Retailers will have to make their in-store experiences unique for those still accustomed to shopping the traditional way to give them a compelling reason to visit their stores. Brick and mortar retailers can convert to open-air shopping centers because spaces are not enclosed and allow shoppers to have that in-person experience while enjoying the appeal that comes with being outdoors.

Sports betting also took a severe hit from coronavirus. With sports stadiums bare, casino doors shut; and slot machines turned off amidst the global loss of jobs, there was little incentive or cash to gamble. Major competitions, such as the Olympics and Euro 2020, were postponed. Others, such as the US Open, French Open, and the NBA, applied make-shift approaches as teams played in empty stadiums without spectators.

In addition to this, gambling patterns have shifted. Gamblers restless from lack of sports activity have turned to an available option – online gambling. These gamblers found a temporary relief to their dopamine rush in virtual games and online casinos. While we are yet to come to terms with how deep the pandemic has altered our lives, there is little doubt that we are entering a new phase of consumerism. The way we shop, spend our holidays, or engage in past times, such as gambling, have significantly evolved. As such, the onus lies on companies to find innovative and flexible ways to engage their customers and remain relevant.

The pandemic has offered sports betting companies a leeway that they can capitalize on – technology. Sports betting fever is spreading like wildfire across the United States. The industry is forecasted to reach $7.32 billion by 2023, growing 56.89% annually. As we become more dependent on technology, a shift from land-based betting to online betting is inevitable if we factor in the convenience that online betting offers and the proliferation of digital systems that facilitate gaming competition.

In Q2 2020, DraftKings DKNG opened shop in Colorado, Pennsylvania, Illinois, and West Virginia. The company was also able to post a 23.5% YOY increment in sales last quarter. All this happened at the height of the pandemic. With the number of states legalizing sports betting, there is much to be gained for bettors that align themselves with changing times.

The pandemic has imposed trying times on businesses across various sectors. But this is hardly the time to try and ride out the storm. With a more proactive, progressive approach driven by technology; retailers, hoteliers, timeshares, and sports betting companies can position themselves to benefit from the new era of digital businesses