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I still can't believe major corporations thought the shift to ecommerce from the pandemic "looked to be permanent". More people than not spent 2 years complaini

I still can't believe major corporations thought the shift to ecommerce from the pandemic "looked to be permanent". More people than not spent 2 years complaining they couldn't leave the house and rushing out to the pub/shops/holidays the minute restrictions dropped. It was certainly a possibility, but staggers my mind that companies of this size all decided it was a sureity. If I were to be uncharitable, this is the effect of senior staff at these companies having been completely detached from the pandemic experience of the majority of the population. Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate.

Dwolb 4y ago
It doesn't matter if the management team thought the shift was permanent or not. What matters is not getting fired. It's hard to get fired if your actions are in line with the consensus.
jeromegv 4y ago
That's not exactly what they bet, because anyone knows that it would be dumb, including them. What you have to look at is e-commerce adoption as a % of retail. This % is increasing every year since the end of the 90s. It was about 10% pre-pandemic. Of course they knew that the huge jump from COVID wouldn't be permanent. What they bet however is that once things re-open, SOME of that conversion to e-commerce would be permanent and that trend of % of retail on ecom would keep increasing at a faster pace than if COVID had not happened. Which wasn't the worse bet to take, you'd think that if people get used to a certain way of shopping and we invest in all this ecom infrastructure, some people would prefer the convenience of it in the long term. Tobi explained it well in his announcement for layoffs last year at Shopify (which came much earlier than other tech companies, likely because their revenue is much more strongly related to ecom revenue) https://news.shopify.com/changes-to-shopifys-team https://news.shopify.com/changes-to-shopifys-team
inetknght 4y ago
> Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate. I assume by `F2F` you mean "face-to-face"? I think that's a matter of perspective. In my echo chamber, people live with flatmates that they get along with just fine and are happy that they don't have to go to an office to do work that could be done at home. > More people than not spent 2 years complaining they couldn't leave the house So... perhaps they do indeed want to "leave the house". But I think they still don't want to go to the office when they can work from home. I think e-commerce is indeed shifted-up relative to the start of the pandemic. I think things that e-commerce can't do well are still where people want to leave the house. As you said, pubs/window shopping (not quite shopping itself)/holidays.
ted_bunny 4y ago
A more concrete uncharitable explanation: if you're one of those execs who only cares about next quarter, convincing people that a temporary situation is permanent would be one way to leverage your ideas.
HDThoreaun 4y ago
The question isn't "is it permanent" it's "what are the chances it's permanent". I can imagine that if they come to the conclusion that there's even a 10% chance then it makes sense to invest resources as if it will happen because they can always just lay people off, but it's much harder to catch up.
qqtt 4y ago
I don't think they thought it was permanent as much as no one really knew when it would stop. They had to make a choice whether to hire enough to sustain the current growth rates or scale back growth in which case competitors might be able to capture that market share. No one had a crystal ball regarding when exactly the growth would stop and what the post-growth period would look like, so from that perspective using all available evidence, the play was to capture market share and worry about the future when it happens. It's a reasonable strategy, the risk being their cost structure gets unbalanced and they might have to lay off people. Contrary to what people here seem to think, laying off people isn't the end of the world, and many of these companies are very comfortable doing it once their growth calculus changes. It was a calculated risk and if we are being honest, it paid off very well for most of the companies which are currently doing layoffs. In many cases the alternative would be to forfeit growth just to potentially save jobs down the line - but what would that look like for companies like Amazon? I don't know if people remember but when the pandemic hit Amazon was scrambling to meet the demands of customers and prime shipping times shot up from 1 day delivery to sometimes more than a week. Those situations would give competitors like WalMart an opening to capitalize on taking market share. At the end of the day, no one had a crystal ball, and while companies probably shouldn't have assumed whatever growth rates of the quarter were permanent, to ignore the growth and not hire in that environment carried it's own risks. And besides, are the current growth rates permanent with all the macro-economic factors at play? Of course not, most likely the economy will pick up at some point, but companies don't know when exactly that will be, so the prudent thing is to prioritize their workforce on high priority revenue generating products and balance their cost structure around the current economic realities.
r00fus 4y ago
> I still can't believe major corporations thought the shift to ecommerce from the pandemic "looked to be permanent". My theory is that it had less to do with e-commerce overall than more to do with all the big spenders in VC and crypto that essentially vanished once QE and ZIRP regime changed completely (over a very short period). Not unlike the dotcom boom where large companies at the time like Sun/Cisco took huge losses because they were selling shovels for the gold miners (startups) who suddenly all went out of business. It's no surprise that so many of the Super Bowl ads were crypto - there was an immense amount of such cash swishing around. Apple didn't dip into that market at all (naturally they are B2C) so they neither hired for that gold rush, nor fired as the gold rush faded.

Dwolb 4y ago

It doesn't matter if the management team thought the shift was permanent or not. What matters is not getting fired. It's hard to get fired if your actions are in line with the consensus.

jeromegv 4y ago

That's not exactly what they bet, because anyone knows that it would be dumb, including them. What you have to look at is e-commerce adoption as a % of retail. This % is increasing every year since the end of the 90s. It was about 10% pre-pandemic. Of course they knew that the huge jump from COVID wouldn't be permanent. What they bet however is that once things re-open, SOME of that conversion to e-commerce would be permanent and that trend of % of retail on ecom would keep increasing at a faster pace than if COVID had not happened. Which wasn't the worse bet to take, you'd think that if people get used to a certain way of shopping and we invest in all this ecom infrastructure, some people would prefer the convenience of it in the long term. Tobi explained it well in his announcement for layoffs last year at Shopify (which came much earlier than other tech companies, likely because their revenue is much more strongly related to ecom revenue) https://news.shopify.com/changes-to-shopifys-team https://news.shopify.com/changes-to-shopifys-team

inetknght 4y ago

> Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate. I assume by `F2F` you mean "face-to-face"? I think that's a matter of perspective. In my echo chamber, people live with flatmates that they get along with just fine and are happy that they don't have to go to an office to do work that could be done at home. > More people than not spent 2 years complaining they couldn't leave the house So... perhaps they do indeed want to "leave the house". But I think they still don't want to go to the office when they can work from home. I think e-commerce is indeed shifted-up relative to the start of the pandemic. I think things that e-commerce can't do well are still where people want to leave the house. As you said, pubs/window shopping (not quite shopping itself)/holidays.

ted_bunny 4y ago

A more concrete uncharitable explanation: if you're one of those execs who only cares about next quarter, convincing people that a temporary situation is permanent would be one way to leverage your ideas.

HDThoreaun 4y ago

The question isn't "is it permanent" it's "what are the chances it's permanent". I can imagine that if they come to the conclusion that there's even a 10% chance then it makes sense to invest resources as if it will happen because they can always just lay people off, but it's much harder to catch up.

qqtt 4y ago

I don't think they thought it was permanent as much as no one really knew when it would stop. They had to make a choice whether to hire enough to sustain the current growth rates or scale back growth in which case competitors might be able to capture that market share. No one had a crystal ball regarding when exactly the growth would stop and what the post-growth period would look like, so from that perspective using all available evidence, the play was to capture market share and worry about the future when it happens. It's a reasonable strategy, the risk being their cost structure gets unbalanced and they might have to lay off people. Contrary to what people here seem to think, laying off people isn't the end of the world, and many of these companies are very comfortable doing it once their growth calculus changes. It was a calculated risk and if we are being honest, it paid off very well for most of the companies which are currently doing layoffs. In many cases the alternative would be to forfeit growth just to potentially save jobs down the line - but what would that look like for companies like Amazon? I don't know if people remember but when the pandemic hit Amazon was scrambling to meet the demands of customers and prime shipping times shot up from 1 day delivery to sometimes more than a week. Those situations would give competitors like WalMart an opening to capitalize on taking market share. At the end of the day, no one had a crystal ball, and while companies probably shouldn't have assumed whatever growth rates of the quarter were permanent, to ignore the growth and not hire in that environment carried it's own risks. And besides, are the current growth rates permanent with all the macro-economic factors at play? Of course not, most likely the economy will pick up at some point, but companies don't know when exactly that will be, so the prudent thing is to prioritize their workforce on high priority revenue generating products and balance their cost structure around the current economic realities.

r00fus 4y ago

> I still can't believe major corporations thought the shift to ecommerce from the pandemic "looked to be permanent". My theory is that it had less to do with e-commerce overall than more to do with all the big spenders in VC and crypto that essentially vanished once QE and ZIRP regime changed completely (over a very short period). Not unlike the dotcom boom where large companies at the time like Sun/Cisco took huge losses because they were selling shovels for the gold miners (startups) who suddenly all went out of business. It's no surprise that so many of the Super Bowl ads were crypto - there was an immense amount of such cash swishing around. Apple didn't dip into that market at all (naturally they are B2C) so they neither hired for that gold rush, nor fired as the gold rush faded.