Spokane Journal of Business

Pandemic has accelerated major transformations

Crisis spurs investments in homes, remote work, online infrastructure

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With tulips blooming and vaccines being administered, the warmer days of spring promise renewal ahead, and none too soon for Americans who have endured the tragedy and isolation of COVID-19 for the past year.

Under such unusual conditions, America’s consumers and businesses are exploiting technology in adapting to the existential challenges presented by COVID-19.

As we look forward to a less remote way of life this year, we also reflect upon the rollercoaster ride the economy and financial markets have endured, and marvel at how technology both enabled commerce and afforded businesses the ability to remain viable. Amid the pandemic, technology accelerated changes already afoot.

A year ago, stocks endured their fastest descent ever into bear market territory, plunging over 30% in a month’s time as economies around the world went into lockdown. Thanks in part to the Fed quickly reinstituting zero interest rate policy and the federal government delivering considerable fiscal stimulus, the U.S. economy bowed, but did not break. The stock market, as measured by the S&P 500, not only recovered its losses but would proceed to notch an 18% return in 2020.

However, before economic recovery took hold, the U.S. endured its sharpest and shortest recession ever; in the first half of 2020, over 20 million jobs were lost, many by Americans formerly employed in the travel and leisure industries. Many of those who remained employed adapted to remote work, helping push the U.S. gross domestic product back into the plus column by the second half of last year. Although they rebounded to an extent by mid-year, depressed mobility statistics reflected the unprecedented circumstances that prompted consumers and businesses to hunker down.

Whether at home because a restaurant or hotel laid them off or because a worker’s home office supplanted the one now sitting empty downtown, Americans from all walks of life were challenged to adapt to a much less mobile life where consumption expenditures were borne of the home and in many cases purchased for the home. As “nonessential” retailers shut down, Americans stayed close to home. E-commerce, which for years had been gaining on bricks-and-mortar retail, took a leap ahead in 2020, gaining several years’ worth of market share in a matter of months.

Suddenly, business boomed at Amazon. Strained logistics incented new business investment in distribution infrastructure like the recently completed Amazon fulfillment center west of Spokane. While completed before the pandemic struck, this facility subsequently grew busier. In the Portland suburbs, the increase in Amazon delivery vans was unmistakable. On runs last spring, about the only vehicles I encountered on area roadways were Amazon delivery vans.

While last year’s outsized e-commerce market share gains are unlikely to repeat in 2021, the pandemic demonstrated the convenience, practicality, and safety of online retail, to the extent that e-commerce will likely continue gaining market share from bricks-and-mortar retail in the years ahead. As more sales move online, those who lose jobs to store closures are finding new employment opportunities in e-commerce – from staffing the new distribution and fulfillment facilities to last-mile delivery.

Like e-commerce, another transformative change accelerated by COVID-19 is remote work. Augmented by videoconferencing services like Zoom Video and Cisco’s Webex, businesses have been able to stay connected to customers on a more personal, face-to-face level during the pandemic. Zooming within companies also enables employees to keep better connected to each other, fostering collegiality that otherwise would have been difficult to achieve through just e-mail and phone.

In related fashion, a good broadband connection has never been so important. Last March, as millions of jobs went remote, the internet was put to the test. Would it withstand the challenge of delivering service at once to all these disparate access points? By and large, the internet has passed with flying colors, meeting the challenge of remote work arrangements and enabling companies to operate in surprisingly effective fashion. Efficiencies have been gained to the extent that bellwether companies like Google will continue allowing their employees to work remotely even after the pandemic has passed.

Finally, Americans have developed an unmistakable urge to nest, upgrading and remodeling their homes to create space for remote offices and mini gyms, while renovating kitchens and upgrading interiors. In the absence of spending on travel and leisure, Americans have demanded better housing and more of it, creating a boom in homebuilding and home improvement that has boosted the likes of home improvement retail chain Home Depot and national home construction company D.R. Horton Inc. 

Even after the pandemic wanes and people’s mobility improves, we see enduring work-from-home arrangements, a strengthening job market, and low interest rates being a continued boon to housing investment.

As Winston Churchill once observed, “Never let a good crisis go to waste.”


Shawn Narancich, a chartered financial analyst, is vice president of equity research and portfolio management with Portland, Oregon-based Ferguson Wellman Capital Management, which has individual and institutional client investors in Washington, Oregon, and California. The company currently manages assets valued at $88 million in the Spokane area.

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