A new Normal?
“There are decades where nothing happens; and there are weeks where decades happen.”― Vladimir Ilyich Lenin
THE NEW NORMAL AFTER COVID 19
As a serial entrepreneur and the founder of a startup in Pune, the last few weeks have been a steep learning curve for me. I discussed my thoughts with friends and Industry experts on the evolution of businesses that the COVID has forced on us and what it means to existing businesses and the new models and innovations that will arise out of this chaos.
The changes to the way we are…..
For those of us who are not seeking predictions from astrologers, much of our time is spent trying to make a sense of how this changes our lives. The first collateral damage will be big marketing events. We will shun congregations and bid goodbye to consumer shows and distributer conferences in the near future. Social distancing will be a new norm, so we will aspire to be ignored when an acquaintance or friend walks past us. We will smile and admire those who just wave at us. Masks will become a fashion accessory. Don’t be surprised if you start seeing colored masks, customized to reflect your personality. India and Africa will lead the line happily, emulating the technology of big brands and adding character with our cultural love for colors. Indian form of greeting (Namaste) will be the trend.
What will change and which businesses will transform?
As we shun congregations, Social gatherings and functions will become nostalgia. A favorite visit to a bar next door with a colleague or a friend will morph into a drink over a call. Is that going to be as pleasurable? Our love to live will overcome the yearning for hugs and kisses. And a call with a drink is better than one without any!!
Even the saner amongst us will become hypochondriacs. Frequent visits to a doctor and intern to testing facilities will replace the visits to siblings and theatres. I think the COVID test is here to stay for a while and we will end up spending money and time researching the most fool proof tests and bragging about how our service provider has state of art facilities. Hopefully, this will translate into a healthy regimen as well. Many people have realized that postponing health over money and pleasure is pricey. One good thing about COVID is that it has no boundaries and practiced no discrimination. For example, despite being a wealthy region with top notch medical facilities, Lombardy paid a heavy price for people with co-morbidities.
We will start challenging linearity of life. Over the last century, other than man made world wars and a few financial downturns, we have seen financial upward mobility for most people in world. With China and India driving growth, maximum number of people have come out of poverty. That has definitely improved quality of life. At the same time, some of it has come at a cost of borrowing from the future. We have been creating debt driven lifestyles believing no end growth phase. Post COVID, we will think a bit more about uncertainties and then create debt. It will be interesting to see contribution of stock markets to overall GDP over the last seven decades, as stock markets largely discount future and every shock like this takes out imagined wealth. When the US, total business debt topped 16 trillion last year, thanks to the Fed’s bargain basement rate, Corporations used much of this debt to buy back their own shares of the stock to raise earnings of the remaining shares creating fat dividends to rich investors and top executives. The frittered away trillions could have been used during this emergency. At some point, the Government will not be able to bail out these ‘too big to fail’ entities. They will then start thinking about creating debts.
Continuing with the linearity, what will happen with discretionary spend? Will we continue to spend as if there is no tomorrow or fearing another demonitisation? I think that will change, we will still like brand driven differentiation (even in our face masks and hand sanitizers) but we will start consuming small tranches. For example, we will shift from a large purchase of branded apparel to a few needed ones and use them longer. At last, we will start recognising the devastation caused to Planer Earth by our unmindful consumption.
Coming to specific industries
FMCG — A trend will shift towards value purchase, India is accustomed to that but in some of the western markets, buyers will start challenging brand premiums. What we will see is bundled offers and discounts.
Real Estate — Your address is best advertisement for status, not sure that will change. What will change is the configuration of the purchase. People will be happy to live in smaller apartments with a lot more convenience. Our attitude to unused stuff in a stuff will be a lot critical going forward.
Consumer finance — Again an industry that will see challenges and opportunity. People with better credit history will be seeking money. As such with excess money shaved off the exchanges (I dont know that with so many governments opening money tap), people will need real money to manage lifestyles. There will be borrowing, businesses with a better way to track future delinquencies will be better off.
Health — It will change. I genuinely think people will be a lot healthy going forward. Won’t happen overnight, but the trend will be in that direction. We will see a lot less of current lifestyle diseases, money that has been going in diabetes, heart ailments will start to reduce. As people understand the issues these create in unforeseen illnesses, emphasis will shift in avoiding these. I think spends on home based physical work-outs, nutrition and alternative well being practices like Yoga will increase.
Tech products — Incremental innovations will tend to be less rewarding. We won’t pay up for just to be latest. Companies need to create real technologies to enhance purchase. Again, emphasis will shift to value.
Education: Zoom classrooms across the world has changed the way Schools and Universities are working. Online courses are not doing great because they failed in the area of social interaction. With google and zoom classes, that barrier is broken. The new model will be a bridge between AI learning and Classroom learning/teaching. The virtual classrooms will lead to virtual schools which will do away with spends on fixed assets (buildings, playgrounds etc) and bring down costs and fees. Play grounds, swimming pools, sports centres etc will be made possible through tie-ups with local facilities. The schools will have an extraordinary level of diversity in both students and teachers who can be recruited from across the world. (Bye-Bye to expensive work permits). The blended learning will lead to innovation in digital platforms and create new business opportunities. No longer do you need to stand long queues in India to get your child admitted in an International School.
What is the downside to all this?
There will be those left behind who do not have the aptitude to learn, to evolve or cognitively challenged. The ancient traditions of kinesthetic rituals will be fast forgotten. A new caste system will develop which is not economic or social but of cognitive potential. Until another crisis comes along…..
