Due to the pandemic, trends that normally may have taken years to unfold, like remote work or the shift from physical to virtual commerce, happened in months
Joel Mokyr We may not be digital creatures now. But someday maybe we will be. https://www.wsj.com/... Miles Kimball / @mileskimball : “Through Shopify, a business can quickly set up a web site with many of the same functions as Amazon without having to sell through Amazon. Its merchant count has nearly doubled in less than two years” https://www.wsj.com/... Jesse Felder / @jessefelder : ‘The Covid-19 pandemic forced Americans to collectively swap the physical for the digital world in a matter of months. Much of what started out as a temporary expedient is likely to become permanent.’ https://www.wsj.com/... Christopher Mims / @mims : The pandemic radically accelerated perhaps the biggest underlying trend in our economy: its dematerialization. 🎞 media went completely digital 🚚 stores became fulfillment centers 👔 the end of the office great stuff from @greg_ip https://www.wsj.com/... https://twitter.com/... Alec Stapp / @alecstapp : “retail stores are designed around customers who may browse ... fulfillment centers are designed around employees handling items nonstop. They thus use labor and space more efficiently. Amazon's sales per employee are 50% higher than Walmart's.” @greg_ip https://www.wsj.com/... Chandan Sapkota / @csapkota : Covid-19 Propelled Businesses Into the Future. Ready or Not. As retailers learn to operate without stores, business travelers without airplanes, and workers without offices, much of what started out as a temporary expedient is likely to become permanent. https://www.wsj.com/... Joe Hall / @joehall : 2021 is going to be a very good year for information technology businesses. Especially if you are providing online B2B services. Feeling like I picked the perfect year to launch @cloud22com https://www.wsj.com/... Rich Webster / @justrichwebster : As multiple industries recognize that much commerce can be virtual, I'd like to know how we could funnel those jobs towards military spouses, who tend to live in business-unfriendly locations and would really appreciate portable careers https://twitter.com/... Ruth Ben-Ghiat / @ruthbenghiat : Politically, too, @karaswisher @profgalloway, it was clear that Covid-19 would act as an accelerant and stress test. My @ForeignAffairs essay from May: https://www.foreignaffairs.com/ ... https://twitter.com/... Nat Bullard / @natbullard : Chart from @greg_ip's latest; US air freight and mail revenue miles versus passenger revenue miles, year-on-year https://www.wsj.com/... https://twitter.com/... Greg Ip / @greg_ip : In my article on digital transformation today https://www.wsj.com/... I reprise a theme that then Fed chairman Alan Greenspan was exploring back in 1999, described then by @davidmwessel: https://www.wsj.com/... Cardiff Garcia / @cardiffgarcia : Fantastic piece by @greg_ip on the pandemic as a time machine that has accelerated the dematerialization of the economy — https://www.wsj.com/... https://twitter.com/... Shawn DuBravac, PhD / @shawndubravac : I've been talking about this slightly different. The pandemic showed us how dependent deployed capital in the economy relied on human congestion to be productive (stadiums, transportation systems, offices, etc). And moving forward, we'll rethink where and why we deploy capital. https://twitter.com/... Kara Swisher / @karaswisher : Hey @profgalloway what we said months and months ago: How a Covid-19 ‘time machine’ forced businesses to make a decade's worth of changes in a matter of months. https://www.wsj.com/...
Context & Ripple Effects
By late 2020 the compression thesis had moved from observation to consensus: coverage through the spring documented how the pandemic pushed tech-enabled behaviors once considered fringe into the mainstream, while Facebook's Mark Zuckerberg pledged to make his company the most forward-leaning on remote work, with up to half of staff permanent within 5-10 years (Zuckerberg's remote-work pledge). This piece is the year-end synthesis of that arc.
What makes it analytically interesting is the tension inside its own evidence: Jesse Felder argues the physical-to-digital swap is 'likely to become permanent,' yet later data shows e-commerce's share of US retail has almost returned to pre-pandemic levels as in-store sales recover (e-commerce share retreats to pre-pandemic levels) — acceleration proved easier to sustain in work habits than in shopping share.
First-order effects
- Shopify's merchant count nearly doubled in less than two years, giving small businesses an Amazon-functional web storefront without selling through Amazon — the direct beneficiary of the forced digital migration.
- Retail stores already losing foot traffic were converted into online fulfillment centers, changing their economic function from point-of-sale to logistics node.
Second-order effects
- Amazon's structural advantage over Walmart sharpened: its sales per employee run about 50% higher, so a faster shift to virtual commerce compounds the productivity gap between pure e-commerce players and store-based incumbents.
- Tech companies that promised permanent work-from-home nonetheless spent billions expanding US office space, forcing a reconciliation between stated remote policy and real-estate commitments.
Third-order effects
- If the pattern holds, the economy continues dematerializing — media and commerce shifting toward digital formats — but the 2022 retail data suggests the durable legacy is hybrid adoption, not wholesale replacement of physical channels.
- Platform infrastructure like Shopify becomes the default entry point for commerce, shifting competitive pressure from individual retailers toward whoever controls the merchant tooling layer.
The trend: The pandemic compressed a decade of digital-adoption curves into months, and the open question is how much of that acceleration is permanent versus a level shift that partially mean-reverts.