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I'm the head data scientist at Yelp and have studied areas hardest hit by the coronavirus. Here are my predictions for what business could look like in the future.

Justin Norman, VP Data Science Yelp
  • Justin Norman is the head of data science at Yelp. The company recently released the Yelp Economic Average report detailing areas and industries hardest hit by the coronavirus pandemic. 
  • Most businesses have flipped to online experiences, and that's here to stay beyond the release of stay-at-home orders.
  • The data fortells an end to experiences involving hand shakes, large crowds, and long-distance travel.
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Our latest local economic report, Yelp Economic Average (YEA), highlights when different areas across the country started to see the true impact of COVID-19 and, from there, exactly which industries are on the rise and which have unfortunately experienced drastic decline.
Consumer Activity Change Across States – Q1 YEA
As you might expect, most businesses that have remained open have pivoted to mostly or only online customer experiences. Here's how all of the industries impacted by the pandemic have altered their offerings to fit new needs, and what trends we predict will stay well beyond the crisis.

Restaurants are takeout and curbside pickup

In the restaurant industry, this adjustment has resulted in an acceleration of many businesses' migration to app-based delivery platforms such as Postmates, Grubhub, and Doordash as well as curbside pick up and takeout.
For small restaurants, however, the level of technical sophistication and/or investment required to make such a change is significant. For traditional brick and mortar restaurants, the food preparation skills and staffing levels required to support delivery or curbside pickup could be out of reach and so many are facing a difficult decision. Restaurant categories which offered pickup and delivery options pre-pandemic such as drive-in fast food, Chinese and Thai restaurants, showed an early increase in share of consumer traffic as the crisis unfolded. From a consumer preferences standpoint, we also observed a marked increase in delivery-ready foods like pizza, fried chicken, and wings.
Of course, food safety and sanitation practices are now paramount for both the customer and restaurant. As a result, many businesses are introducing contactless delivery options, which feature individually packaged goods whenever possible. In addition, there has been an uptick in curbside pickup — by a factor of 300 — and takeout because of the greater demand for safer options.
Another rapid shift from businesses was the move to selling alcohol as a way to add another revenue stream and entice future consumers. In many states, new policies and laws were put into place to allow restaurants to sell beer, wine, and cocktails directly to patrons as a way to see increased revenue.
Specifically, we saw a huge relative increase in searches for alcohol generally, alcohol delivery, and cocktails to go. For example "margaritas to go" saw a 100 times increase in search volume versus the same time last year. Alcohol is a high-margin sale for these establishments, and as such we've witnessed very quick adoption from business owners and consumers alike.

Professional services offer aid, entertainment, and shopping online

Some professional services, such as plumbers, home contractors, security companies, and septic services, have increased in consumer demand as most consumers are stuck at home and placing more stress on their kitchens, bathrooms, heating, and air conditioning units — and internet services.
And, as shelter-in-place restrictions continue, consumers are looking for businesses that provide services beyond food and essentials. For instance, consumers are still celebrating special occasions and showing care for one another as we've seen an interest in balloon services and especially flower delivery at near Valentine's Day level.
For those who are fortunate enough to have access to sparsely populated open spaces, interest in hiking, fishing, lakes, and sporting goods have all seen double digit percentage increases. And, in a surprise to no-one, head shops, cannabis dispensaries, and vape shops are all up significantly in consumer traffic. On the non-essential shopping front, more consumers are looking for information about businesses which sell fabric, hot tubs, and pools.
Business Categories – Q1 YEA

Businesses have innovated quickly, and the changes will withstand

Even within the Yelp community, we've seen several examples of businesses rapidly innovating to serve customers in the ever-changing coronavirus-era. From using Yelp Waitlist to more effectively manage delivery queues, to using Yelp Reservations to model parking-lot pickup lines, it's clear that businesses are adapting quickly.
Though no one knows exactly when the pandemic will ease, and when subsequently the global and local economies will start to recover (although a number of states are already drawing up their plans), we do know that things will be different.
And, while we can't be sure sure how the local economy will be impacted in the long term, here are four predictions based on what we've seen, heard, and learned over the past few weeks.

1. Handshakes will be a thing of the past

We anticipate businesses will need to follow new safety regulations such as wearing masks, gloves, etc. This will mean less inventory available for service businesses, longer wait times, and possibly higher prices – especially for high-end/low-volume experiences.

2. People will spend a lot more time at home, even when they are allowed outside

There will be a return to intensely local shopping, with people only willing to travel up to 2 miles from their homes where possible. The "comfort zone" will remain small for a while.
We wonder if this trend towards "hyperlocalization" will incline consumers to rely on delivery options for things that they didn't used to such as grocery stores, laundry, and other essentials. Maybe some people even realize that they prefer shopping this way!

3. Virtual events will persist

Burning Man, Coachella, Bottle Rock, and SXSW (to name a few) will all be presented as virtual experiences for at least a year. Because of this, consumers will adapt and virtual events (both large and small), will become normal. People will continue to gravitate to services that allow for group delivery of food and cocktails for gatherings, happy hours, and book clubs — giving everyone the same experience in their separate homes.
We are closely watching the data to see if people will not only access professional services virtually, but will use them from more "places" than they would have. Will the ability to connect with expertise anywhere also affect where people look for services? Someday soon, we might say: my tutor is in Kansas, my therapist is in Cleveland, and my fitness trainer lives in Honolulu!

4. Avoiding crowds leads to a more scheduled lifestyle

We expect to see people go to places like gyms and outdoor activities in shifts. With that in mind, we'll need tools that help us manage our schedules outside of the home.
Only time and data will tell us how and when conditions will start to improve. One thing that we know for sure is that even the recovery will be localized, as some states and local governments are now forming policies specific to their own populace, geography, and demographics — essentially looking at where they are on "the curve."
We believe that the world will be quite different post COVID-19. In many ways, it already is. What normal feels and looks like will continue to evolve as society adapts to these changing conditions.
However, the good news is that humans have always been great at adapting to change. We will continue to connect with one another and eventually even drive the economy forward. It'll be up to government leaders, health experts, local business owners, and the communities in which we live to show us what the future will be and to set the pace of recovery.
Justin Norman serves as head of data science at Yelp. He is a career data professional and data science leader with experience in multiple industries and companies. Previously, Justin was the director of research and data science at Cloudera Fast Forward Labs, head of applied machine learning at Fitbit, the head of Cisco's enterprise data science office, and a big data systems engineer with Booz Allen Hamilton.
SEE ALSO: Coronavirus is disproportionately hurting black Americans. 2 McKinsey partners explain the ways we can reverse this trend and prevent a catastrophic long-term outcome.
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