Every time I hear a stock analyst say that the economy is about to rebound or that the worst is behind us. I ask myself if they live in the same universe I am in? It’s as though the market place has completely lost all sight of rational thinking. We’ve just spent almost four months tempering our desires to go out, sit at a local coffee shop, browse a few stores, and even shop a little. Our behaviours have been reprogrammed by the risks and fears of getting this virus or worse dying.
Our lives have been changed, similarly to those who lived through the Spanish Flu in 1918. However, we have a plethora of options that others didn’t have over 100 years ago; consumers had to leave home to go out and shop for groceries and other necessities. Most of us don’t. One hundred years ago, there were no TVs, smartphones, internet, online games, video streaming, e-commerce, or retailers that could sell their in-store goods online. It’s entirely possible; technology may have saved more lives in our era because we had options. Options that the public didn’t have 100 years ago.
These options have allowed for shifts in behaviour, especially if they can keep us safe from this dreaded disease. Work from home has shown that we can be equally, if not more productive working remotely. Who says you need an office. If you think that shoppers are apprehensive I am sure commuters will be even more! Ride the bus, subway, or commuter train? With a mask, crowded, and would that be with disposable gloves as well? What about the workplace will there be enough social distancing?
Decoupling the public from new behaviours, and the fear of the unknown by returning to work cannot be dismissed when trying to restart an economy, especially one that is more complex than the one hundred years ago.
There is a risk, and I am concerned it is becoming all too real. Our economy may be impaired, and it will lead to less demand. The same thing happened with the Spanish Flu, some refer to it as the unknown depression of 1920-21. Keep in mind that this happened as they were getting out of their pandemic and after numerous outbreaks. We’re still in the first wave and judging what’s happening globally, especially in the U.S. without precautions, it is a recipe for failure.
How could less demand happen? Let’s do some simple math hypothetically if 30% of those currently unemployed do not find work. Those with work decide to cut back spending because of fear of losing their jobs, and that pushes more businesses to close/fail that will put more people out of work. It all becomes a self-fulfilling prophecy. Couple that with a continuing virus, you have a genuine risk on your hands.
A recovery means back to normal. I like many don’t see that any time soon. We will need a lot more consumers to believe that it is safe to go back to normal. However, I am concerned that shutting down. At the same time, inevitably essential to save lives, that decision has created risks. As a result, it will take longer than a couple of quarters to rebound from this situation. I firmly believe that by the time a vaccine and treatments are available, consumers will have formed even more profound non-social behaviours. We can speculate what they might be, but no one can predict them with absolute certainty.
For businesses to recover and or stay in the game, they should have recognized and begun to develop their digital assets faster. Technology will represent at least 50% of internal strategic initiatives to serve those new needs. And if demand doesn’t rebound, all of these initiatives now are all the more important for business survival. Regardless the level of market demand, the time to act is now and take initiatives to change the direction of your business and futures.
At the end of the day I leave you with this thought, if you see things just from your own window, you will miss the world.
George Minakakis is the CEO of Inception Retail Group and Author of The Great Transition The Emergence of Unconventional Leadership.
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