I have always been a positive guy. In my last 20-some years as a professional banker, I have seen many ups and downs. COVID-19 environment is something that also has precedence if we go back many years.
During the many epidemic that the human race has seen, this is one of them, most recent and probably the most dangerous – If we judge this situation by the number of humans that it has killed globally.
Right now we are in an anxious new territory. Having said that, post COVID-19 will be something very different and we will be living our lives that way for a long time to come. COVID-19 has made us realize what really is important to us. Be it food items, other purchases or even our family. This pandemic has forced us to spend more time with our family (Which is good and bad, both). While there is a high probability that this pandemic (lockdown) will result into a baby boom, there is also a very high chance that this lockdown can introduce an era of maximum divorce in the history of times, unfortunately.
Nothing has changed: There will always be a segment of people whose lifestyle will not change and situations like the one we are in now won’t matter. We are talking about the elite 6-8% of the population only.
This is the new way of living: For sometime to come, we will behave differently, make our priority list differently, make purchases differently. Do different things – do things differently! Our behavior pattern is evolving – fast. Daily life for people around the world has changed in ways that would have been unthinkable sometime back. But as organizations try to find their way through the COVID-19 pandemic, it’s important to keep in mind that the global consumer was already evolving at great speed. That process is now playing out faster than ever.
If we make a list of all our monthly spends for the last 12 months, categorize them and compare this list with the next 12 months (post COVID-19), this will be an eye-opener. We probably have our priorities right this time.
Many will lose their jobs. It’s a vicious circle. If offices are to be kept closed, people will lose jobs. Many offices will close down. Many daily bread earners will resort to wrong means of earning their bread.
Child education has already gone online and parents are already judging their young kid’s teachers on how they are teaching and how they behave with all our kids. Teachers are behaving differently as they can see that the young students are now sitting with their parents to attend the online learning sessions and there are parents who are judging the teachers not only on how they teach but also on their level of knowledge and expertise. In this process, the teachers are trying to impress the parents and the final result is that the kids are suffering in the foundation years of their lives.
Things have changed forever: there will always be a certain percent of population who would never go back to their normal lives again. They are paranoid and they are the ones who always react first. Their spending pattern has already changed and this will take a lifetime to change again – or get back to normal again. Will this affect the companies? Probably not! Too small a percentage of the population to matter.. Time will tell.
Start-ups will be hit the worst: With the already high monthly burn ratio, start-ups will be the worst hit sector globally. Getting funding at this point in time will be the most difficult unless you have a very strong revenue model accompanied with least consumer acquisition cost.
And at the same time, majority of the population will plan to start their own venture as jobs will be lost and new jobs availability will be at its least.
People forget: People forget sooner than we expect. In my opinion organization will look at normal consumer spending behavior very soon. Spending pattern will be back to normal and companies will start to make their profits again and consumers will start to buy more than what they need for their basic life.
Back to normal: Consumers will be back to their normal behavior (or should we say back to their normal irrational behavior) in the next 8 months timeframe. If corporates do not keep an open eye and are ready to change their strategy at the first sight of change in consumer behavior, they will perish. Consumers will always be consumers – most of them will get back to their normal spending behavior soon. The corporates better be ready to woo them with their new strategy and new advertising campaigns.
Keep an eye on them: The pandemic has forced us to behave in a manner we would normally not. This gives a very high boost to the following sectors. In my opinion, most capital will be invested in the following sectors (monetary and human capital):
- Workspace Industry:
- Education Industry
- Entertainment Industry
- Hospitality Industry
Post COVID-19, there will be a sudden boost in the food and self-care industry, but this is just a sudden spike and will be short lived. Many capitalists will take advantage of this sudden spike, which is only fair as the society needs capitalists who take the risk and invest to make a profit.
Mitez Sheth, Ph.D.