While several big-name chains closed their doors due to pandemic-triggered bankruptcies, a new segment of retail businesses flourished at the same time.
The ascent of the so-called “micro-sellers,” who use e-commerce platforms and don’t need brick and mortar spaces to sell everything from zodiac- and astrology-themed accessories, bags and jewelry to artwork to clothing, has been fueled by several factors, according to Bloomberg.
Most notably, the pandemic has triggered many people to re-imagine their sources of income, as unemployment and cut hours have been taking a toll on Americans.
A recent study by the Economic Innovation Group, says that the pandemic delivered a massive shock to American entrepreneurship that has seriously altered established trends in new business formation. However, it also adds that “counter to expectations, 2020 shaped up to be the best year for business applications on record.”
“In 2020, there was an explosion in new business applications, reaching nearly 4.5 million by year’s end–a 24.3% increase from 2019 and 51.0 percent higher than the 2010-19 average,” according to the study.
The survey also notes that last year’s surge in business applications is markedly different from what occurred during the financial crisis of 2007-09 for several factors.
This economic contraction was in response to a public health crisis and economic fundamentals remain strong for many industries and the stimulus’ funds have helped as well.
Additional explanations may lie outside financial markets, most notably with the ever-deepening integration of technology throughout our economy and society. Which “have lowered some barriers to starting a business or choosing self-employment.”
“COVID-19 was a social, cultural, and emotional shock the likes of which we have not experienced for generations. Becoming an entrepreneur is a deeply personal decision, and the pandemic may have delivered the push for many to embrace it,” the study notes.
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