Location Leaders Step Up to the Plate
During these challenging times to collectively curb the spread of Covid-19, it’s an ongoing tradeoff between public health and short-term economic impact. Social distancing cuts off virality, but it also cuts off consumer spending. That is clearly hitting local economies hard as non-essential businesses shut their doors.
But we’re seeing tech companies step up to the plate in a mixture of altruistic and opportunistic moves. That’s everything from Comcast removing data caps to Amazon removing its paywall for streaming kids shows. But what about local specifically? Again, that’s where businesses are getting hit most.
We’ve seen moves in the local space over the past week from Facebook, Yelp, and Foursquare. Though there are several others, we’ll drill down on this representative sample. We’ll also give a shoutout to Google for its work to free up human and compute resources for local listings updates, covered Monday by Damian Rollison.
Facebook has pledged $100 million to help local businesses weather the storm of lost business due to consumer self-quarantining and municipal orders for non-essential businesses to shut down. This will come in the form of cash grants and ad credits, parceled through an application process.
The grants are available to 30,000 eligible SMBs in 30 countries. Doing the math, that means an average of $3,333 per business, which could offer meaningful help in offsetting top-line losses. This is especially significant given SMBs’ common cash-flow challenges, which are likely to be exacerbated in times like these.
Overall, Facebook has 140 million business pages, 8 million of which are paid, and most of those are small businesses that operate at the local level. This makes the SMB segment a priority for Facebook, so relief grants are a logical move to show solidarity for its SMB constituents during a challenging time.
Facebook COO Sheryl Sandberg separately published on her Facebook page last week that the company is planning to offer educational content “to support businesses operating in this new and unsettling environment.” She specified that more details will be provided in the next few weeks.
Meanwhile, Yelp is devoting $25 million in relief to its core constituency of local merchants. This comes in the form of pausing any charges for its paid advertising services. So rather than a cash grant, it’s more like forgiveness for payments, giving local merchants some much-needed relief in cost structure.
Eligibility is limited to businesses with fewer than five locations in order to prioritize relief to independent businesses, which likely need it most. Though this amount is less than Facebook’s grants, it doesn’t require that the merchants do anything to apply. It kicks in automatically.
In addition to the above measures, Yelp is doing the following (as covered Monday by Damian Rollison):
- Highlighting of “contact-free” delivery options in the Yelp app, via partnership with GrubHub, rolling out next week.
- A new feature, coming soon, allowing restaurants to specify they are open but only for pick-up and delivery.
- A new banner alert that can be placed at the top of Yelp profiles to announce any special circumstances.
- Ability to showcase virtual service offerings like consultations, classes, tours, shows, and performances.
- A new set of special review content guidelines, including “zero tolerance for any claims in reviews of contracting COVID-19 from a business or its employees or negative reviews about a business being closed during what would be their regular open hours in normal circumstances.”
Lastly, Foursquare has put its location intelligence platform to work to report on foot traffic patterns in these uncertain times. The data validates logical and expected changes in consumer behavior, but there are also usable insights that can inform public policy. Foursquare says it will be offering fluid analysis as the crisis continues.
The data includes large-scale inflections in activities such as travel cancellations, working at home, stocking up on provisions (warehouse and grocery); and avoiding bars, restaurants and movie theaters. Though those activities are down, activity at quick-serve restaurants and gas stations is up.
The question with all the changes above is how much? Below is the deep dive on the data, which show trends through March 13, many of which have no doubt grown dramatically as the number of Covid-19 cases has skyrocketed in the US and public life has been shut down for a third of Americans.
- Cancelling Travel Plans
Airport visits have declined across cities and states with the most confirmed cases of COVID-19. After upticks in airport visits over the holiday weekends of Martin Luther King Day and Presidents’ Day, location data shows a gradual decline in airport visits since the outbreak of Covid-19. Foot traffic to airports has declined most in Seattle and the Bay Area, down 24-27% from the week ending February 19 to the week ending March 13. Visits to New York airports declined 22%, while Los Angeles airports declined 15%.
- Working from Home
Visits to offices are declining in major cities with confirmed cases of COVID-19, as employees opt to or are ordered to work remotely. Declines began in earnest in Washington, California, and New York around March 2, as US news coverage of the outbreak began to pick up. While the largest initial decline took place in Seattle, San Francisco offices have since surpassed Seattle offices with the largest relative decline, with foot traffic down 46% from the week ending February 24 to the week ending March 13. Meanwhile, visits to offices in New York are down 13% and visits to offices in Los Angeles are down 15%.
- Stocking Up On Supplies
Visits to grocery stores and warehouse stores are on the rise in Seattle, San Francisco, Los Angeles, and New York City since the outbreak of Covid-19, as people shop for food, drinks, and supplies. People seem to be buying in bulk, with visits to warehouse stores like Sam’s Club and Costco up nearly 39% nationally from the week ending February 19 to the week ending March 13. The largest relative increase was in the New York City area, where foot traffic to warehouse stores is up more than 51%. People are also flocking to grocery stores. After gradual increases since February 24, grocery stores saw a sharp spike in visits around March 11-13, with visits up 19% nationally from the week ending February 19 to the week ending March 13. The largest relative uptick has been in Los Angeles, where foot traffic to grocery stores is up 27%.
- Avoiding Sit-Down Restaurants
Visits to casual dining restaurant chains are down as people distance themselves socially, dining at home rather than going out to eat. Nationally, casual dining chains’ foot traffic is down 11% from the week ending February 19 to the week ending March 13. In the four cities on which the Foursquare data focused (New York, Seattle, Los Angeles, San Francisco), there was a decline (8-12%) in visits around February 24 in all four cities, and then foot traffic remained fairly stable in San Francisco, Los Angeles, and New York City from February 24 to March 8. Visits began declining again around March 11, perhaps indicating cities will continue to see further declines as the pandemic grows.
- Still Eating Fast Food
Since the outbreak of COVID-19, foot traffic to QSRs actually increased, up 11% nationally from the week ending February 19 to the week ending March 13. Amongst the cities with major outbreaks, we’ve seen a noticeable uptick in QSR visits in New York in particular, where foot traffic is up 9%. It is unclear as of now whether this trend will persist as more stringent government orders request that people stay home except for essential travel.
- Avoiding the Bar
Visits to nightlife spots are only down 4% nationally from the week ending February 19 to the week ending March 13, despite the guidance to distance socially. San Francisco bars have seen the greatest decline in foot traffic, down 15%. Meanwhile, visits to bars in New York City had only declined 7% as of March 13. The numbers are certainly lower now that New York bars have been shuttered.
- Avoiding Movie Theaters
Visits to movie theaters are declining in Seattle, San Francisco, New York City and Los Angeles since the outbreak of COVID-19, as people are opting to stream movies and television shows at home, rather than going to crowded public spaces for entertainment. Visits to movie theaters are down 24% nationally from the week ending February 19 to the week ending March 13. Amongst the four cities with major outbreaks, Seattle and New York City cinemas have seen the greatest declines, down approximately 33%. Meanwhile, visits to movie theaters in San Francisco declined 30% and visits to movie theaters in Los Angeles declined 27%. Cinemas have since been closed down in a spate of states.
- Filling Up On Gas
Visits to gas stations are up 11% nationally from the week ending February 19 to the week ending March 13, perhaps as consumers prepare for unforeseen circumstances. Amongst cities with the biggest Covid-19 outbreaks, gas stations are actually seeing the largest relative uptick in foot traffic in the New York area, perhaps as people avoid crowded public transportation. Visits to gas stations in New York are up 12%. Meanwhile, visits to gas stations have remained fairly stable in Los Angeles and San Francisco.
We’ll see lots more relief from tech giants with flags planted in local commerce. These are just a few for now, indicative of the efforts to pull together and support local businesses, given their influence on the U.S. economy. We’ll report back periodically with more such support efforts as they develop.