Monday August 10, 2020 |Notes

Tech is not immune from economic challenges

The coronavirus pandemic has brought a surge of activity to digital commerce. The conditions couldn't have been any better. Stores were closed. Patterns and lifestyles changed drastically. Stimulus checks, non-recourse payroll loans, and unemployment benefits were plentiful. Those factors are changing and new macro headwinds will make it difficult for ecommerce to continue to thrive.

PPP loans have come to an end. Unemployment checks will be reduced, and the additional subsidies will likely be phased out soon. Local businesses are closing at alarming rates. Families are facing a reality of kids at home with reduced work hours and/or added costs. And with a renewed strategy of putting digital ahead of in-store sales this fall, large retailers with hordes of cash will cause online ad rates to spike, making it more difficult for small businesses to succeed.

One of the most important elections in American history is under 3 months away. Regardless of the outcome, there's more unknowns ahead than in the past 3 months, which is really saying something in 2020.

Digital commerce has largely benefited from the pandemic response thus far. The conditions that made ecommerce flourish are changing quickly, and there's a lot of uncertainty ahead. Digital commerce will not continue to rise as a whole as the challenges become more pronounced for independent businesses throughout the remainder of 2020.

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