Online retail explosion, pay-to-view conferences and a cleaning service boom: Twenty-one ways business will shift due to the COVID-19 pandemic

business shift COVID-19

People are seen queuing outside a Centrelink office in Bondi Junction on Tuesday, March 24, 2020. Source: AAP Image/Joel Carrett.

Last week, the deputy chief medical officer of Australia, Professor Paul Kelly, outlined the public health scenarios of COVID-19.

The best-case scenario sees a 20% infection rate, five million people infected, and 50,000 people dead.

The worst-case scenario sees a 60% infection rate, 15 million people infected, and 150,000 people dead.

This changes everything.

So, what can we expect? With an exponential rise in infections, things are expected to get worse before they get better. A recession is almost inevitable, and unemployment will rise with serious economic consequences for everyone.

This is a life-defining moment.

No one knows when or how we will recover. Will it be a L, V or U curve?

I suspect we will see a slow U-shaped recovery, and that it will take years to rebuild confidence and balance sheets.

What I do know is there will be serious long-term structural implications.

1. We are going to have get used to a public deficit for the long term as stimulus packages, bail-outs and lower tax receipts drive high debt levels. This will create political division on how to balance the budget over the next decade.

2. We will see big increases in grants to medical research on transmissible diseases to prevent the risk of future health pandemics.

3. Our government will strengthen our preparedness for future pandemics, stockpiling testing kits, masks, ventilators and other personal protective equipment, and build additional capacity into the health system.

4. Investments will move to more defensive asset classes, and we will move into a long-term low-inflationary environment. We will have lower expectations on return on investment.

5. Boardrooms will refocus on personal safety of employees and customers, risk management, business continuity, sustainable cashflow and strengthening balance sheets. Risk appetites will weaken, and capital investment will be slow to rebuild. Insolvent trading laws will be reformed for temporary global shocks.

6. Online retail will explode. We will move from discovering and searching online and then buying in stores, to buying more goods online.

7. We will see shifts in the way we pay for goods and services, driven by shifts online and the need for less handling. The decline of cash will accelerate, and we will pay with frictionless card or mobile-based debit and new forms of credit.

8. Chemists, supermarkets, streaming services, books and DYI categories will grow while discretionary categories such as apparel and furniture will struggle for growth.

9. Home-based businesses, promoted on online platforms, will increase out of necessity.

10. Delivery logistics will surge to support the shift to online purchases with longer delivery times expected.

11. Distributed workforces, working from home, will accelerate tele and video conferencing, accelerating our use of data and testing broadband networks. We will learn about flexibility and productivity. Working alone together will strain the creativity and iteration that comes from close collaboration.

12. Cyber security incidents will rise rapidly with shifts towards working from home as employees’ online behaviour is more exposed.

13. With more people working from home, relationship pressures will increase, resulting in higher levels of breakups and divorce.

14. There will be less business travel, and more conferences will become pay-to-view live. Aviation, corporate travel and event organisers will see a structural shift downward.

15. Expectations on personal hygiene will rise and hand-based greetings will diminish. Usage of hard and liquid soap and hand sanitisers will grow and our access to personal protection equipment will become ubiquitous.

16. Cleaning costs will rise. Cleaning products and services will have higher penetration, higher usage and higher margins.

17. Home pantries and freezer stock levels will increase with shelf-stable, long-life and frozen foods.

18. We will be cooking more from home and will seek new inspiration and simplicity for meal preparation. Meal kits and food delivery will also see strong growth.

19. Home schooling will become more popular as some parents look to become educators to isolate their children for health reasons.

20. Social distancing and isolation will generate higher levels of anxiety and depression. Our ability to cope with so much uncertainty and loss will require significantly more mental health support services. All businesses will provide greater levels of mental health support for their employees.

21. Charities will see higher demand to support families and the vulnerable. We will learn that our need to be social and our ability to collaborate is fundamental to our humanity and this is not to be taken for granted and is to be valued.

And also: science and love will beat fear. This will pass, and everything will be OK.

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