Businesses strive to stay relevant
As some parts of the country reopen from the pandemic lockdown, there appear to be three phases that the economy and businesses will move through. I’m calling it T3, which stands for triage, transition and transformation.
During the preliminary phase of triage, companies learned how to operate in new ways, as workers were sheltering in residence. Zoom, Skype, Slack and other technological solutions became commonplace. There was no playbook for anything like this before, so it was trial by fire, with plenty of missteps.
The next phase will be transition, where corporations will take a conservative approach that will put worker safety before anything else. Companies are preparing for a slow transition, during which only critical workers will physically be in offices. For every firm, “critical” will mean something different, but for most larger service companies, the majority of staff members have been told to prepare to work from home at least through the summer and, in some places, including New York, that could extend through the end of the year.
The final phase of the post-pandemic economy will be transformation. Businesses are devoting much thought to how they will transform themselves.
Companies are trying to answer hard questions: Can some employee functions be performed remotely on a permanent basis? Do we need as much office space? How can we reconfigure physical workspaces to ensure the health of our staff? Do we need to curtail business travel? Can we conduct effective meetings and conferences using telecommunications? Should we employ clusters of employees in geographically diverse locations? Can we use robots and technology to do repetitive functions, which often put human workers at risk?
As they ask these questions, businesses are waiting for Americans to weigh in. Given that U.S. consumer spending accounts for about two-thirds of the economy, consumers will be important drivers of the transition and transformation stages. Some states already are relaxing their stay-at-home instructions, but that does not necessarily mean that large numbers of consumers will be ready to resume their previous patterns.
In other words, if you open, will they come? Even with strict safety measures in place at your favorite restaurant, you may not feel at ease going back.
NYU Professor Scott Galloway told me that the pandemic is likely to act as an accelerant of trends that were emerging. For example, he predicts that online sales at places like Amazon, Wal-Mart and Target will continue to grow dramatically.
He says that only those brands that can provide a unique customer experience will survive. Other trends that retailers are watching are more pronounced moves toward thrift shopping, which was already growing in popularity with millennials, along with handmade products.
Other sectors like fitness could be transformed, as people turn to at-home solutions instead of going to physical gyms. Places like Airbnb and VRBO may take a long time to recover, and there is likely to be a greater emphasis on technology’s ability to augment health care, which could mean a big boost in telemedicine.