Nobody can predict the future. But one thing is for certain: the pandemic of 2020+ will change a lot of things forever.
While some of these changes will be unexpected, many will just be a fast-forwarding of trends that were already taking place.
Based on a recent New York Times editorial about life in 2022 after the pandemic is hopefully in our rear view mirror, here are some broad-stroke predictions based on trends that were already in play, that will impact businesses and the economy going forward:
Places Where Many People Gather For Leisure Activities
These industries rely on people having fun and offering leisure activities among large groups of people. Vaccine or not, industries that will struggle to recover include:
- Cruise line industries
- Theme parks
- Minor league baseball teams
- Restaurants
- Night clubs
- Casinos
Local Newspapers
Already struggling, the pandemic has accelerated layoffs and closings. This will deprive many local communities from a source of information about local politics, business and education. According to David Leonhardt, author of the NY Times editorial, “When local newspapers close, corruption and political polarization tend to rise, while voter turnout tends to fall, academic research has found. “
Traditional Department Stores
Already being hammered by online sales before the pandemic, this trend has accelerated by a factor of 100. Sears, Macy’s and JC Penney are all on the wane, punctuated by the recent bankruptcy filing of Neiman Marcus. And when these anchor stores fail, malls fail, food courts fail — it’s a downward spiral.
Higher Education
Many institutions are subsidized by the government and enrollment in colleges peaked in 2010. Between 2010 and 2018, Undergrad enrollment had fallen 8 percent, some, attributed to falling birthrates. Add online courses vs campus life into the mix and expensive college educations start to be more questionable.
Yuval Levin, a conservative policy expert and the founding editor of National Affairs, put it this way: “The top 20 schools are probably not going to change. But what is actually higher education — more than 4,000 universities — I think will change a lot.”
White Collar Jobs
For many, not all, working remotely via Zoom, Facetime or Google Meet/Chat, etc has been a huge success. Productivity is up and companies like Twitter have told employees that they can work at home forever. This will have a huge impact on all parts of everyday life starting with commuting, mass transit, tolls, parking garages, commercial real estate and even the local sandwich shop, food truck or coffee place that relies on the daily influx of commuters.
In-Person Meetings, Conferences and Business Travel
While there will probably always be the need for tradeshows, conferences and sales meetings, the impulse to hop on a plane to see a far-flung client may give people pause. Is it really necessary? Mark Zandi, the chief economist at Moody’s Analytics, has 200 economists around the world who report to him, and he has noticed that they are more efficient than before the pandemic struck. “We’ve gotten used to it very quickly and like it,” Mr. Zandi said. “I just don’t see us going back.” Because other businesses are having the same experience, he predicted, “Business travel is going to fundamentally change.”
As more people get used to online meetings, etc. expect businesses that service these industries to be negatively impacted as demand decreases and behaviors change:
- Trade show planners
- Trade show venues
- Catering
- Hospitality
- Hotels
- Cabs, transportation, car rentals
Weak Companies Will Die
“It’s only when the tide goes out,” Warren Buffett likes to say, “that you learn who’s been swimming naked.”
As quoted in the NY Times article, his point is that companies with flawed business models can look healthy in good times. Out of habit, many customers continue to buy from them. But when the economy weakens, people have to make decisions about where to pull back. They often start with products and services that they find the least valuable or that they can replace with a cheaper alternative.
In Conclusion
Again, so many questions and so much uncertainty. What small and medium-sized businesses should do is reexamine their offerings. Assuming your business is still viable and you are operational, stay in touch with clients and LISTEN to what they need which they may not even be able to articulate themselves at this point. Also, trim your own overhead for what might seem like nice services to have but don’t really help you grow or MAINTAIN your clients. It’s also critical NOT to pullback so far as to make yourself invisible. Now more than ever, businesses need to double down on their own marketing efforts to maintain market share at the very least and perhaps even expand their market share at the expense of weaker competitors.
Survival of the fittest (and most visible) should be your rallying cry!