Everyone is trying to imagine what the future state or a post-coronavirus world might be. Here are four statistics that might point to where the “new normal” business world is heading.
Open what?
The Wall Street Journal reported that two months after China re-opened the Wuhan economy, 75 percent of the city’s citizens will not leave their apartments for non-essential activities.
Why? People are still cautious and afraid. They’re wary of another outbreak.
I can understand that mindset. I’ve asked many of my friends if they’re ready to go to a live event or favorite restaurant if their local economy is “opened” and they have all said “no.”
So it makes me wonder … when we open the economy in a post-coronavirus world, will anybody care? There are 22 million people on unemployment. People have dashed through their savings and are running up credit card debt. Will anybody even have discretionary income for plays and pubs?
I’m not minimizing the economic problems in any way. I just think from a practical standpoint we’re going to be experiencing a little Wuhan consumer caution for a while.
Small business, big trouble
Small businesses are the economic engine of America. Businesses with fewer than 500 employees account for 48 percent of American jobs and 43.5 percent of GDP.
Harvard Business Review reports on research that shows 45 percent of small businesses are closed due to COVID-19. Total employment by these businesses declined by 40 percent since the end of January.
Roughly 60 percent of these businesses expect to be able to reopen by the end of 2020. However, nearly 30 percent view it only as somewhat likely that they will be able to reopen, and almost 10 percent find it unlikely or extremely unlikely that they will be back in business by year-end.
Now, combine this stat with the first one. For the 60 percent of businesses that think they will be able to re-open … will there be any customers left?
The world will come back. But it might take two years for many people to be in a position to take vacations or buy tickets for a sporting event.
Uncertainty incorporated
eConsultancy, a reliable source of marketing trends, tells us that as of March 31, 86 percent of UK-based marketers were delaying or reviewing their campaigns, up from 55 percent just two weeks earlier.
So the current state is, 14 percent of marketing plans are going ahead as scheduled … only three months into the budget cycle! Sort of mind-blowing.
I sensed there was a lot of disruption in our marketing field and this statistic seems to confirm it.
The research also shows that 85 percent of these organizations are delaying or reviewing new hires, and an even larger 90 percent are doing the same with their budgeting commitments, rising sharply from 41 percent and 61 percent respectively just two weeks earlier.
The sharp increase in organizations that have decided to change, adapt or pause their marketing and wider business strategies since mid-March paints a clear picture of the increasing toll the coronavirus has taken on the industry. With no end currently in sight, marketers will continue making difficult adaptational decisions, causing more disruption to pre-planned campaigns, hires, and budgeting.
What is success in a post-coronavirus world?
Zero.
That is the predicted rate of profit growth for American companies in 2020, according to Goldman Sachs.
The investment bank published its grim report less than one month before the World Health Organization declared the coronavirus a pandemic. A steep decline in Chinese economic activity, paired with US businesses that have since halted, could potentially lead to a recession, the company said.
Our businesses are finely-tuned to a quarterly profit schedule. That will be unattainable for many companies. Maybe our quarterly goal for the post-coronavirus world will be “staying in business.”
In any event, a year without profits has long-term implications for capital spending, hiring, and business travel to name a few of many impacts.
Implications for the post-coronavirus world
There is a ton of uncertainty in our world. But we need to look at trends to help us make the very best decisions. I think these trends point to a stark future … but certainly not a future without promise.
Every disruption creates opportunity. And boy do we have a lot of disruption!
These same small businesses that have their backs against the wall also represent a huge reservoir of creative energy that can solve problems. When American entrepreneurs see a problem, they immediately try to figure out a solution. While governments fumble and bicker, American business will get down to work and make positive change happen.
Sure, marketing plans have been disrupted. But companies still need to tell their stories and acquire customers. New marketing ideas will emerge, and I think this will happen with breath-taking speed.
Yes, many corporations won’t be profitable this year. But thousands of new ideas are emerging that meet the new needs of a world in crisis. Here is a prediction: We will see a surge in business start-ups in the next six months to serve the new opportunities.
I am not dismayed by the facts. I’m excited to see how the business world steps up and figures out solutions to create a brighter post-coronavirus world.
We need to look at trends like this to try to forecast our probable future. But the one thing the economists can’t account for is ingenuity.
Mark Schaefer is the chief blogger for this site, executive director of Schaefer Marketing Solutions, and the author of several best-selling digital marketing books. He is an acclaimed keynote speaker, college educator, and business consultant. The Marketing Companion podcast is among the top business podcasts in the world. Contact Mark to have him speak to your company event or conference soon.I
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