Undeniably, the COVID-19 pandemic has permanently changed how we work, learn, socialize, and care for ourselves and our loved ones.
The workforce has evolved tremendously during the past two years. Since 2020, millions of Americans have lost or changed jobs (or exited the workforce entirely), opened and closed their businesses, and found new ways to innovate.
If your own agency has managed to weather the storm, you should be filled with a sense of accomplishment. But that doesn’t mean you should sit back and relax.
The reality is that the pandemic is far from over. While we hope that the major threat posed by the novel coronavirus and its variants will soon be a distant memory, we’re still dealing with issues related to staffing, the supply chain, and areas of high transmission.
As a result, you’ll want to do everything possible to protect your business and create a strategy for long-term growth. Agency owners will be better positioned for success if they know the kinds of businesses affected by COVID 19 and how to connect with those in the fastest growing industries post COVID 19.
To that end, let’s look at the positive and negative effects of COVID 19 on business types across numerous industries. Once you know which industries have come out on top, you’ll be able to develop a lead generation strategy that will strengthen your agency in the long run.
Understanding the Positive and Negative Effects of COVID 19 on Business
Before we dive into the list of thriving industries and struggling industries during the pandemic, we’ll need to understand how small businesses were affected by COVID 19 in general terms – as well as how larger corporations took a hit during 2020 and 2021.
In the early part of the pandemic, widespread closures of businesses were commonplace. Although the United States never really experienced the same restrictive lock-downs that other countries did, the temporary shuttering of non-essential businesses certainly took a toll on millions of employers and employees.
As a result of those closures, business owners were forced to engage in mass layoffs in order to save money and have a prayer of keeping their companies from completely going under.
According to a study published by the Proceedings of the National Academy of Sciences of the United States of America (PNAS), the median business surveyed with more than $10,000 in monthly expenses had roughly two weeks’ worth of cash on-hand, while 75% of businesses studied had only enough liquid capital at their disposal to last for two months at most. In other words, small businesses were particularly vulnerable and most business owners never anticipated the possibility of prolonged, forcible closures.
Making matters worse, PNAS found that over 70% of respondents planned to take advantage of financial aid provided through the CARES Act or other programs. Financial support was hard to come by, especially during the first application process, which meant many business owners were unable to access the help they needed to keep their dreams alive.
During the first year of the pandemic, reports the Wall Street Journal, roughly 200,000 extra business closures occurred. Temporary layoffs turned permanent, with many Americans struggling to juggle childcare and remote learning while they hustled to make ends meet. Record numbers of unemployed individuals were able to benefit from increased benefits and eviction moratoriums, but those protections were available only for a limited time.
That being said, the impact of the pandemic on businesses wasn’t all bad. For those organizations that happened to be in the digital realm, growth was imminent. New problems often resulted in creative solutions, propelling many organizations forward thanks to innovation. Business leaders reported increased collaboration within their companies, while the transition to widespread remote work was one that many employees and employers alike found to be preferable (and profitable).
Changes happened at a rapid clip, with years’ worth of innovations taking place within weeks or even days. We found a new way of working – and even if it couldn’t be implemented forever across the board, it’s undoubtedly shifted how many Americans approach employment opportunities, work conditions, work-life balance, and even living in a capitalistic society as a whole.
We can’t yet appreciate the long-lasting effects of COVID-19 on American industries, but it’s safe to say that the pandemic has permanently touched and transformed our lives. How we respond to those changes will matter significantly as we prepare for the post-pandemic era.
With that in mind, we’ll want to examine which industries have been most affected by COVID 19 – for better and for worse.
The Industries Most Affected By COVID 19 in USA
The Best Industries During COVID 19
Here’s a breakdown of the best industries during COVID 19, which typically experienced major growth in 2020 (and even into 2021 and 2022).
Online Retail and Delivery Services
Whether independently owned or part of a larger chain, retailers that already had a strong online presence were uniquely positioned to win out during the pandemic. Due to widespread closures of non-essential businesses, many brick-and-mortar stores were forced to shut their doors. But e-commerce businesses didn’t face that same issue (though supply chain issues are relatively universal). According to the International Trade Administration, global e-commerce revenues grew by 19% in 2020, with an increase of 8% growth predicted through 2024. In other words, online shopping is here to stay – and it’s more popular than ever, even as physical retailers have long-since reopened.
On a related note, delivery services for groceries, restaurant takeout, liquor, and other consumer goods also rose during the pandemic. Newer services like GoPuff managed to make a name for themselves during the pandemic, while existing platforms like GrubHub, UberEats, DoorDash, Seamless, and Postmates were seen as even more of a necessity than before. In fact, orders on delivery apps doubled during the pandemic (although the restaurants, unfortunately, did not always benefit). Many customers also wanted to avoid going to crowded grocery stores altogether, making services like Instacart and meal delivery platforms like Hello Fresh that much more enticing. Although these platforms may face challenges as more Americans feel comfortable returning to restaurants, the pandemic made these brands household names – and it’s likely that pandemic habits will die hard.
Indoor and Outdoor Recreation
During a time when many Americans felt like they had no choice but to be cooped up at home, it’s no surprise that the demand for safe entertainment hit new heights. We wanted puzzles, board and video games, toys, or virtually anything that would keep us occupied and from going stir crazy. In early 2020, puzzles flew off the shelves; a game maker interviewed by CNBC said their sales skyrocketed by 370% year-over-year during just a two-week span. At no time since the Great Depression, experts noted, had jigsaw puzzles been so hot and trendy.
While major events were out of the question, families tried to find ways to stay active, protect their health, and enjoy the great outdoors. Swing sets and camping gear proved to be big sellers, while Americans tried their hand at bird-watching, cycling, paddling, and fishing. Whether they stayed in the backyard or headed to a relatively remote campsite, consumers were eager to get away from it all – even if they couldn’t travel very far.
The home improvement and landscaping industries experienced massive gains during the pandemic, with three out of four Americans completing a major home improvement project in the midst of this ongoing health crisis. Gardening and outdoor living projects were among the most popular, while home repairs and renovations were also commonplace. Although challenges like lumber shortages often resulted in setbacks, that didn’t deter many homeowners from getting creative and improving their surroundings. Since many were hesitant to hire contractors, citing health and safety concerns, the DIY movement really took off – especially since millions of Americans were out of work and had extra time to spare.
Grocery and Alcohol Sales
We mentioned earlier that grocery delivery increased in prevalence, but overall grocery spending did, too. In the early days of the COVID-19 pandemic, Americans were hoarding everyday items like toilet paper, which resulted in record-high demand in local grocery stores. Tackling the weekly shopping list felt like a major sporting event. Simply making it out in one piece felt like a victory, in many cases. But the grocers were often the real winners, with unprecedented sales resulting from a perceived (and sometimes actual) scarcity.
While many experts predicted that demand for groceries would fall in 2021, thanks in part to rising prices, more than one-third of Americans reported they were still buying more groceries than before the pandemic. Many are cooking more frequently than before, despite economic reopenings, while others have made the switch to premium products or are sticking with familiar items in spite of increased costs.
Liquor stores were deemed essential at the start of the pandemic – and Americans certainly upped their booze intake. Alcohol retail sales increased drastically during the start of the pandemic, with nearly one in five Americans reporting they drank heavily even into 2021. Isolation, disrupted schedules, job loss, and health-related anxiety likely all played a part in the increased demand for alcohol, but the connection between alcohol and good times also made many people turn to their local liquor stores or online delivery services to forget their worries and have a little fun (even while staying home).
The real estate market was one area that showed no real signs of slowing down after the initial shock of COVID-19’s arrival in March 2020. Despite the fact that millions of Americans found themselves in more precarious financial situations during the pandemic, the demand for homeownership reached new highs.
With record-low inventory available, bidding wars, waived contingencies, and over-asking offers became commonplace. Many buyers have spent months making offers. Some have been priced out of the market entirely. And experts say that 2022 won’t be much better.
Many Americans were chomping at the bit to buy, but some former owners faced huge financial challenges during this period. Foreclosures unfortunately spiked by 67% in 2021 as compared to the same period in 2020, thanks to the ending of forbearance programs created during the early part of the pandemic to help borrowers find financial relief. That does mean there could be more units available – and more work for real estate agents and investors – as well as an increased demand for already-scarce rental housing.
Wellness and At-Home Fitness
While beauty brands and hairstylists may have struggled during the early part of the pandemic, that doesn’t mean self-care went out the window. With so much emphasis on staying healthy, it’s no surprise that the wellness market is expected to increase even more in value post-pandemic. Certain sectors of the wellness market waned during 2020 and 2021, but McKinsey data suggests that wellness spending is likely to increase in 2022 and beyond. Everything from spa items to home cleaning products continue to be in high demand, as more people are looking to keep both their environments and their bodies at their best.
At-home fitness is one area where Americans were really willing to spend during the COVID-19 pandemic. As many gyms remained closed, fitness enthusiasts had to find ways to stay active without leaving the house. Brands like Peloton made huge strides, while exercise live-streams allowed personal trainers to make a living without physical contact with their clients. The Washington Post reports that health and fitness equipment revenues more than doubled from March to October 2020. It became difficult to find any treadmills or stationary bikes available for sale. And although gyms have reopened, many people are sticking with their at-home versions. Instead of paying a monthly fee to be surrounded by other people, they can workout in the privacy of their own homes with equipment and services they’ve already paid for.
The pandemic triggered some undesirable effects, particularly in terms of our reliance on technology. While tech made it possible for us to learn and work from home, it also provided criminals with an opportunity to scam vulnerable victims. From Zoom bombing and remote work scams to coronavirus-related phishing schemes and healthcare hacking attempts, new threats emerged on a daily basis.
Data breaches soared to new heights, representing billions of dollars in losses for businesses. And as many companies have now embraced a fully remote or hybrid work environment, the need for at-home cybersecurity measures has never been greater. Data suggested that the cybersecurity market was expected to expand at a compound annual growth rate of 12% from 2019 to 2021, representing total values of $230 billion this year.
Big Pharma ended up improving its reputation somewhat (as well as its earnings) during the pandemic. A 2020 Harris Poll found that consumers' positive perception of pharmaceutical companies increased during the early part of the pandemic, with 40% reporting they had a more positive view of the industry in April 2020 compared to before the pandemic began. Although there are many who express a distrust of the industry as a whole, the billions of dollars that have been invested into this sector will pave the way for future vaccine development and other health-related outcomes.
The Negative Impact of COVID 19 on Businesses, By Industry
We’ve gone over some of the positives that have come out of the pandemic. But which industries have been most affected by COVID 19 in negative ways?
Travel and Tourism
Unsurprisingly, the travel industry took a huge hit at the start of the pandemic – and not every sector has recovered. While regional travel is on the upswing again, airlines and hotels are still reporting lower-than-average numbers. Cruise ships, of course, remained docked for many months. And while short-term rentals (including Airbnbs) and camping sites did alright for themselves during the past two years, businesses related to international travel, tourism, and hospitality generally lost out. The outlook is more positive for 2022, but there are a lot of unknowns at play.
Restaurants and Bars
Another hard-hit sector during the pandemic was food and drink. While Americans were happy to grab groceries and opt for delivery services, in-person dining and getting drinks at the bar weren’t always possible. Even when these establishments were allowed to reopen, many stayed away due to uneasiness. Although eateries got creative and many managed to survive, the restaurant industry COVID 19 impacts are likely to be long-lasting. In fact, the National Restaurant Association predicts that the industry will probably never return to its pre-pandemic state. Thanks to worker shortages and increasing food costs, it’s going to be tough going for restaurant owners for the foreseeable future.
Sports and Entertainment
In 2022, we’re seeing major sporting events and entertainment venues make a triumphant return. But over the last couple of years, places like sports arenas, music venues, movie theaters, theme parks, and casinos had a hard time. The events that took place in these locales were deemed to be potential super-spreaders, making it impossible for them to operate as usual. On the plus side, rapid testing has now become routine for the cast and crew of Broadway shows, on sports teams, and for musical artists. But as mask and vaccine mandates are lifted for attendees, we’ll have to wait and see whether the sports and entertainment sector will experience more volatility in the coming months.
Shipping and Transportation
Demand for certain consumer goods soared during the early part of the pandemic, but inconsistency and international complications have disrupted the shipping and transportation industry. U.S. freight has failed to keep pace with the larger economy, according to McKinsey data, while the globalization of our supply chain made for huge hurdles in regard to freight volume. Shipping delays are still impacting our ability to obtain all kinds of goods, from lumber to clothing. The shift to e-commerce has also changed the way freight is shipped. Overall recovery in this sector will involve a complicated process.
In other transit news, the automotive industry didn’t necessarily fare very well during the pandemic. At a time when we were being encouraged to stay put, it’s no wonder that car sales fell dramatically. Early on, researchers expected U.S. car sales to decline by as much as 20% from 2019 to 2020. And since automobile inventory – in the new, used, and rental categories – hit major lows on a global scale during this health crisis, many wondered how long it would take for the industry to recover. In 2021, we saw rapid production to make up the shortfall. Now, buyers are interested in both traditional and online car sales (especially because auto prices are more affordable than they’ve been in years).
While e-commerce boomed during this crisis, traditional retailers struggled to survive. Even prior to COVID-19, brick-and-mortar retailers often had trouble competing with their online counterparts. But when these storefronts were named as non-essential, those that didn’t have a strong online presence faced an uphill battle. Though many hustled to adjust to our “new normal,” even major retailers filed for bankruptcy during the pandemic. And while some shoppers are happy to return to malls and plazas to support local businesses, others may never return – opting to find everything they need online instead.
Production and Manufacturing
The manufacturing industry has been a bit of a mixed bag during COVID. While the demand for paper products soared, especially early on, industrial production declined. To make matters more complicated, millions of Americans decided to retire from the workforce completely during the pandemic. Since the manufacturing industry featured a lot of older workers pre-COVID, labor shortages and lack of knowledge are two problems that will likely plague the production workforce once demand ramps back up. While emerging technologies could make up for this, supply chain disruptions are a third obstacle faced by the manufacturing industry as a whole.
Home renovations rose during the pandemic, but new construction is a whole different story. Larger corporations that took a hit during 2020 are likely to scale back on construction investments as a result, which could lead to construction layoffs or lack of work. And even if there’s a renewed interest in developing construction starts, material and labor shortages could lead to additional complications. This isn’t to say that new construction isn’t happening – but it’s certainly been less common, particularly as remote work becomes more normalized. New construction could certainly help many would-be home buyers. In our region and elsewhere, buyers are combatting low inventory with new builds (despite rising costs and material shortages).
Target the Fastest Growing Industries Post COVID 19
So… how can you use your knowledge of the industries most affected by COVID 19 in USA markets to grow your business?
There’s no hard and fast rule here – especially because conditions have changed so rapidly over the past two years. Industries that struggled at the start of the pandemic are starting to thrive again. And as variants evolve, your strategy may have to do the same.
The idea is that you can use this list of best industries during COVID 19 to acquire more quality leads for your agency.
Does that mean you should automatically turn down a restaurant owner or a car dealership as a client?
Rather, you might want to use what you now know about the impact of the pandemic on businesses to target a different niche or pursue a client you might not have considered before.
We still don’t know which industries will ultimately win out post-pandemic. Like it or not, we’re still in the middle of this health crisis. But the upside to that is: there’s still plenty of time to emerge as a leader after it’s all over.
You don’t need to completely pivot if your clients were among the top businesses affected by COVID 19. In fact, if they fall under that category and survived, that’s a great sign. Not all of your clients need to be on the list of fastest growing industries post COVID 19. But this post can help you diversify your business and illuminate what you might be missing.
At a time when digital marketing has proven essential, you’ll want to do everything possible to compete. By taking a closer look at your lead generation and sales process to include some of these best industries during COVID 19, you may find you’re in an even better position post-pandemic.