August 3, 2020 8 min read

Opinions expressed by Entrepreneur contributors are their own.

Many if not all of us have seen the dire predictions of scores of businesses that will shutter their doors forever because of Covid-19. As I scanned the list it read like a who’s who of really poorly operated businesses. From chain restaurants that I wouldn’t frequent on a bet to once-mighty retailers that are a shadow of their former glory. The presupposition of the article was that Covid-19 was killing these businesses. I disagree. While it’s true that the Covid-19 crisis might have dealt the coup de grâce and expedited these establishment’s demise, these businesses were coughing up blood for years, sometimes decades before the virus hastened their death rattles.

For example, being a lazy man who genuinely hates going to brick and mortar stores I was an early adopter of online shopping. I still remember the pitiful website of a monster catalog company. I eagerly went to their web page and began shopping, it was easy—see something you like you put it into your cart. Well, it was easy up to that point; when I went to check out I was told that they would contact me in 3–5 business days with a shipping cost. What? I was incredulous. Doesn’t it stand to reason that if your printed catalog has a price for shipping that your website would too? It turns out no, no they don’t.  

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I waited to find out how much shipping would cost and finally received an email (quite a bit beyond the 3–5 business day envelop) only to learn that my $100 shelving unit would cost me an additional $350 in shipping! I called the U.S. headquarters and was told by every level I could reach that this was just the way it was going to be. I canceled the purchase immediately.

That was 15 years ago and I am still shaking my head, so, as a service to you gentle readers, I went back to that website and nothing much has changed.  

This store currently has thriving brick and mortar stores all over the world but it is doomed to fail. Pick up at the curb services are only a stopgap. The point of online purchases is that I don’t HAVE to leave my house. Amazon has taught us that we can get just about anything we want in a manner of days. In fact, I ordered a better umbrella from Amazon, got free shipping, and it was cheaper.

That’s not to say that Amazon has performed perfectly during the Covid-19 crisis — I order a lot from Amazon and the delays and shortages have been frustrating, but can be forgiven since COVID caught most companies off guard and supply chains could not produce products fast enough AND more and more people were turning to Amazon for its famous delivery service to your door. This isn’t a commercial for Amazon, Walmart, and Costco—while not widely known for their delivery services before the Pandemic, have distinguished themselves as capable of getting its customers what they need quickly and efficiently.

But other companies aren’t doing quite as well.  I tried to get a delivery from an upscale grocery store only to be told that even though I was a scant 12 miles from the nearest store, they don’t deliver to my zip code. What’s more, when I called customer service to inquire as to why they said that they may in the future but have no immediate plans to do so. I was an eager consumer, willing to pay shipping and a delivery fee only to have an apathetic customer disservice agent shrug and hurry to get me off the phone. I hear one more person shrug (yes I can hear that over the phone) I won’t be responsible for my actions. 

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OK, at this point some of you may be thinking Covid-19 changed all the rules but I would counter that the rules changed a long time ago, but people’s buying habits hadn’t — until COVID—changed. Let’s take a look at Amazon, once a humble online bookseller. Books; that was pretty much it. They started their business when book sales were on the decline and their competition tried gimmicks like in-store coffee houses (that foreseeably, became a place where people could snag a book from the shelf and drink coffee all day. I know a former manager who told me that she would see the same people every day taking the same book and drinking coffee all day, and when they finished one book, they would simply start another. I don’t think I have to tell you what happened to most of the brick and mortar bookstores. 

But Amazon was more ambitious, they decided to do the unthinkable and take on the juggernauts of retail. For an online bookseller to even considering taking on Montgomery Wards, Sears and JCPenney (who practically invented the mail order catalog—relax I know they didn’t) was laughable in 1994.

In October of 2014, I wrote  Adapt or Die—Some Chilling Lessons From the Ice Industry for Entrepreneur a cautionary tale about companies that fail to adapt, mitigate their risks, and anticipate disruptive market forces. These retailers lost sight of their market differentiators—the very reasons customers shopped at their stores instead of somewhere else. Let me be clear: I am not saying that there weren’t other market factors that brought these stores to their knees, but I will point out that one can purchase a Craftsman (a brand almost synonymous with Sears) on Amazon and is eligible for free delivery with Prime membership.

But the bell even tolls for Amazon, on May 11, 2019, the world’s first trillionaire Amazon CEO Jeff Bezos stunned Amazon stockholders by announcing that his company will go bankrupt. “I predict one day, Amazon will fail,” he said. Bezos later explained that he believes “Amazon will be disrupted one day” and eventually “will go bankrupt.” Now there is no way of knowing whether Mr. Bezos read my October 2014 article mentioned above, but he’s a smart guy so I am confident he did (until such time that he adamantly denies reading it, at which point I will probably still believe he is following my advice).

Some reading this may be sympathetic to small businesses who don’t have the cash to weather this storm to which I would respond, “Why not?” Even a 10th grader in an introduction to business class knows that most small businesses fail, and most that fail, do so because of undercapitalization.  If you are a small business person without a war chest how is that Covid’s fault? Market disruptors are foreseeable and predictable, albeit the nature and timing of said disruption may not be known.

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It’s not just small business owners who are suffering. My wife ordered a pizza from a national pizza chain recently.  The store was only a mile from our house. An hour after she ordered it she called the restaurant and the manager told her that her pizza was “going in a car right now”. When my wife protested that she wasn’t happy with a wait of over an hour the manager cooly responded with, “You should consider yourself lucky, most people are waiting over two hours.” We ate the pizza that was raw in the middle (well as much as we could) and it made us both sick. She complained the next day to the corporate office and received a 10% off coupon.

And while we are on the subject of pizza, why is “contactless” delivery an incentive? What is the name of all that is holy were they doing to my pizza before? Your employees are now washing their hands? What’s next a commercial where they brag that now their food contains 20% fewer rat droppings? If this is the solution to a failing business we are all in trouble.

Covid-19 is indeed a health crisis and one that will adversely impact businesses large and small, but it is also an opportunity.  Businesses that rise to provide truly stellar customer service and produce food (or their business’s equivalent) that is fresh and delicious while under the constraints of the pandemic will emerge stronger with a true business advantage.

Not all businesses were performing poorly before this crisis, but for those who were, the handwriting is on the wall.