The World after Coronavirus
The World is unlikely to ever be the same again. So what will change as a result of the Coronavirus epidemic?
The economic damage
Some reports have suggested that 800,000 to 1,000,000 businesses could be lost to the epidemic. That would be one fifth of UK businesses. Accountancy firm RSM have described this prediction as “alarmist at best”. They believe that the true number will be 70,000 to 100,000, less than the number lost after the 2008 banking crash..
That’s still a great deal of misery for owners and employees and, we believe, small town shopping centres could be the worst hit. It’s fair to say that the economy will take a hit, the effects of which could be with us for years.
Indications are that the number of people shopping online has more than doubled since the crisis began, including many who rarely or never shopped online before. Retail experts believe that many will continue to do so after the epidemic, and that online shopping could potentially constitute a majority of the market for the first time.
Consumers are buying online from companies that they haven’t heard of until now, and forming new loyalties.
Obviously, shops with a strong online presence and a healthy balance sheet will be at an advantage when normal service is resumed. Experts are also saying that customers will not easily forget how companies are behaving during this time of crisis. A sense of social responsibility and, to be blunt, putting people before profits is likely to be rewarded.
Customers are buying what they need, a habit which is likely to continue. They are likely to look at the quality and durability of products more than before the epidemic. The benefits of the purchase are likely to be uppermost in the minds of consumers for some time to come.
The use of cash has halved since the lockdown began. This is reported by the figures and colloquially by the supermarket checkout operator who has been working flat out, but has less cash in the till at the end of the day. We may not have reached the cashless society yet, but the increased use of card payments, especially contactless, is likely to be maintained.
There are large numbers of people working from home now, and in many cases both employees and employers have adjusted and many more people are likely to work from home than before the crisis. In the past people have mainly shopped close to their work, or on their route home, Some are now shopping close to home and, in many cases, rediscovering their local corner shop. It’s a challenge that some local shops are rising to.
Appreciating the workers
It’s been heartening to see the levels of appreciation for health workers during the lockdown. Also the growing respect for workers who were, until now, among the least respected, such as supermarket workers and refuse collectors. Postal workers are also gaining in respect. We have grown used to evaluating the Royal Mail in terms of its financial performance. Perhaps now we will recognise the importance of Royal Mail which certainly was, and possibly still is, the best postal system in the World, in the rebuilding of our economy.
We’ve seen a level of Government interference in our lives beyond anything that most of us can remember, and on the whole we’ve accepted that. That interference has extended to the economy although we are yet to learn the full extent of financial bailouts to companies that were privatised during the last 30 years.The relationship between people and the state will have changed permanently.
I also feel that there is likely that the stronger sense of national identity and of community are here to stay.
If people are likely to judge companies by the way they reacted to the crisis, they will certainly judge politicians by the way that they behaved.
We’ve also seen national borders closed and foreign travel restricted. As the virus has crossed national boundaries, even neighbouring countries are seen as a threat, and countries are trying to become more self-sufficient. This is certain to affect international trade as the World recovers from the crisis.