Trendemic: Are You Prepared for a Changed World?
May 18, 2021 | James Sprow | Blue Vault
On May 11, 2021, Paul Barausky, Chief Distribution Officer at Sealy Investment Securities, presented a webinar that addressed all of the changes and accelerations that have been brought about by the Pandemic. The presentation included:
• The move to work-from-home
• Geographic relocations
• Media production and relocation
• Changes in travel
• Telemedicine and fitness
• Acceleration of E-Commerce
• Fashion and Finances
• Reimagined supply chain
• Wealth and personal finance
When we first made decisions to work from home, we had no idea how long that adjustment would last. We all found that we were able to accomplish more from home than we expected. Employers wondered what people would do with all of the time spent not commuting? The answer is they put in more hours; they actually improved their productivity. The downside was the lines between work at home and our personal lives got blurred.
Impacts on Cities
You may now be going back to work, but you may also be seeing a trend toward more working from home. Over half of employees would prefer a hybrid to work remotely at least three days per week. But there is a recognition that working in the office is important for developing a culture. What about the future of office buildings? The office can no longer be just a destination, it must also be a place of purpose. 87% of executives expect to make changes including consolidating office space in premier locations and opening more satellite offices. In addition, one in twenty U.S. adults said they personally moved out of where they were living either permanently or temporarily to COVID-19 according to Pew Research Center last year.
The extremely wealthy are going to the mountains. Much of the rest of the population is relocating in droves. The three leading destinations are Tennessee, Texas, and Florida. Nashville has gone crazy. We are seeing a geographic migration. Austin, Texas is becoming a real tech hub. For every one person that has moved out, 1.53 have moved in. Five out of the 10 most rapidly growing towns in the nation are in Florida.
Over the years, pandemics have had a huge impact on cities. Trends have emerged, placing the vulnerable in our societies at greater risk, increasing wealth inequities. Pandemics have always had an impact on trends, and especially on our cities.
We will need to improve transportation in our cities. We will need more affordable housing in a lot of our great cities. The trend toward more green space and walking space needs to continues. The final need is for improved public health.
Media Production & Consumption
While we were at home streaming things, we quit going to movie theaters. The Hollywood blockbuster may be over. Is this shift to streaming the new normal. There are also implications for news broadcasts. We have gone from a linear platform to a digital platform with sources from all over the place which is growing exponentially. Also, the loss of revenue in sports was over $12 billion. The NFL alone lost $5.5 billion.
The sports industry has changed forever. When the leagues recognized the loss of money from the loss of live fans, they will go to more advertising and partnerships, and more legal betting and online platform. The number of people betting online was up 63% from 2020.
The State of Travel
We’ve started traveling again. When the travel world shut down, there was a $314 billion drop in 2020 in airline passenger revenue. There have been trends in the amount of people walking and cycling. Uber, Lyft, ride-hailing, and taxis dropped. Personal vehicle purchases went through the roof. Rental car companies began selling off their inventory. Airbnb, VRBO, and home-sharing rentals went up at the cost of hotels. “The pandemic delivered a lingering, and possibly potential hit to business travel that is likely to weigh on employment and economic growth in some communities for years.” (WSJ)
The international association of travel agents believes we won’t get back to the previous levels of business travel until 2024. We’ve gotten more comfortable with Zoom and other virtual connections and this affects the entire ecosystem.
Many of those on the call have done away with the “first date trip” and rather than travel, they will use a virtual connection to see if the potential client or customer would be a good fit. The future of managed business travel will take a while for essential business travel to come back because we are redefining the word “essential.”
Telemedicine & Fitness
There has been a 154% increase in March 2020 visits alone. The patient benefits are accessibility, travel, convenience, safety, and honesty. Physicians can reach more patients without interruption in their practices.
The fitness business has changed from gyms to home workouts. Tonal, Peloton, and Mirror have prospered, but there have been 480,000 lost jobs in the gym industry with $15 billion in lost revenues. However, more people are exercising because it is convenient and easy to access. And that is a good thing.
Acceleration in E-Commerce
Sealy had one of their best years in the history of the company. They raised over $270 million. Suddenly industrial real estate has become the “belle of the ball.” E-commerce
penetration exploded during the pandemic. We are currently up to our 2025 number for e-commerce projections. When we go back to our stores we are seeing that they are more like showrooms. We have some buy online or pick it up. People are used to the convenience, and we are not going back. It has also affected the way we dress. How people dress on their days off from work is most intriguing. We know the work-from-home or hybrid trend is here to stay. This will affect the success or failure of different brands across the clothing sector.
Reimagining the Supply Chain
It started with the US/China trade war. We have seen economic shutdowns and vulnerabilities. We will see a China+one strategy. We will see more supplies from Vietnam and Ecuador, and increased reliance on Mexico, for example. We will be doing more onshoring and be moving away from “Just-In-Time” inventory and we will see the advantages of holding more inventory as safety stocks.
Wealth and Personal Finance
“Everyone’s a stock trader.”- Paul Barausky Even taxi drivers were trading stocks in the late ’90s from their Blackberries. That’s what it felt like when the pandemic hit. We saw a rise in trading and a surge in companies like Robinhood and Reddit.
A second trend is a need for emergency funds. Hopefully, the public is getting more financially literate. There has been an increase in estate planning. We’ve also seen a larger disparity in the wealth gap which could have large impacts on the vulnerability of the poor.
In Summary
• The office has to be more than a destination.
• The cities will be back, but differently.
• E-commerce is here to stay, with increased trade but with different countries.
