The shut-in economy and its impact on distribution

SDA Bocconi Insight - Zoom On - by K. Zaghi

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When reflecting on the impact of the Covid-19 pandemic on the world of distribution, many questions come to mind, and even more possible answers. These are churned out by the forecasting models that are flooding traditional media outlets and social networks. What all of them seem to agree on is that the ripple effects on consumer sentiment and buying habits will be felt for far longer than the epidemic itself. Of these effects, one that definitely warrants close attention is the growing dissemination of what’s known as the ‘shut-in economy’ or the ‘lockdown economy,’ a phenomenon linked to on-demand - what we can order on the internet and consume at home.

 

The shut-in economy was already gaining popularity before the Covid-19 emergency hit, and it seems destined to become an integral part of our daily lives. The most thought-provoking aspect of this is that while home delivery used to be the prerogative of big companies, now this new channel is providing growth opportunities for more fragmented supply chains too. These distributors use online platforms to organize home delivery of fresh products (and they also offer personalized at-home beauty care) so customers can avoid endless lines in physical stores (especially at big box retailers).

 

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