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PRIVATE CLIENT REPORT
The Pathology of Recessions
Economists will tell you a recession or a depression occurs when there is a contraction of GDP (Gross Domestic Product). This basically means that there is a reduction of what we produce as a nation as a whole. This happens in response to a front running contraction in demand (demand drying up in layman’s terms) and therefore resulting in deflation.
As a marketer, It’s important that I point out a big fallacy in business that most people get wrong or just don’t understand, and that is that ‘Demand dries up’! This is completely untrue. Like energy that transforms itself from potential to kinetic and vice versa and is never actually lost, demand also is not lost – it just moves around and transforms itself into different forms. This will be the central theme of this paper, to help you understand this and how to adjust your business and focus for success.
So what does this mean for you?
The first thing is to understand this ‘demand transformation’ manifestation with respect to your business and how it is now affected. I hope the ‘14 Marketing Megatrends’ I have selected and will outline here for you today will go some way towards helping you succeed remarkably well in an ever-changing world.
There are many more Megatrends and subtrends we have identified and are working with our clients to commercialise, however, these fourteen are some of the key trends we would like to share with you so you can get a head start over your competition and lead the way.
A Prelude to a New World
We woke up one day in early 2020, and the world had suddenly changed.
BIG TIME.
Suddenly hundreds of millions of otherwise productive people around the world found themselves in a quarantine lockdown, unable, yet willing to work, with no jobs to go to, and facing an uncertain future with some bewilderment and anxiety.
Few people alive, if any, have seen anything like this, or could even have imagined it just a few short months ago.
Governments have enforced a pandemic lockdown and consequently thrown all semblance of financial responsibility out the window. This massive spending is designed to not only bail out banks (as was the case in the 2008 GFC), but the entire economy, effectively employing millions of people to stay home in a forced state of quarantine.
When you listen to the many commentators, most are saying we are facing the biggest health and consequently, the biggest economic crisis since WWII globally.
Doctors and scientists are scrambling to make sense of this and to find a way out. At best, they are hoping a vaccine will provide some relief, assuming that it is both safe and efficacious. However, a potential vaccine is 12-18 months away. At worse, this vaccine fails or possibly is rushed through, potentially creating problems that are much worse.
It appears people (the average person in lockdown) are deeply divided in their views and opinions and are starting to get restless, wanting their ‘old lives back’.
There is a lot of debate about the extent of this health crisis and whether the actions taken are justified, the right exit plan and what the future near and long term looks like as a result of it.
It’s been just a few weeks in, and people are starting to realise there may not be a return to ‘normal’ and instead there will be a shift, resulting in an impact on our way of life and our previous freedoms.
This Has Not Been a Slow Societal Shift
Our current way of life has been forced upon us by our respective governments through their self-appointed, elevated omnipotent decisions, many by the way are unlawful and unconstitutional.
Today they increasingly see their role as dictatorial over our lives, introducing laws to ‘save us from ourselves’, seeing it as their responsibility as being the sole saviour of our health and safety. Increasingly they have removed self-reliance and self-responsibility and forget about treating us as adults, with punitive measures if we fail to comply under the guise of ‘keeping us safe’.
Some feel comfort in that approach, others feel disdain and growing anger, especially due to the obvious hypocrisy of these ‘new safety rules’ decreed by the few, with enormous power to enact such rules.
This is further manifested by our self-inflicted, self-imposed restrictions we have now unconsciously placed upon ourselves by limiting our own thinking through the fear and anxiety stealthily imposed upon us by the media playing along with the chosen narrative.
We as a society have become dysfunctional in our thinking, carrying this irrationality along with us like a form of PTSD, that has spread across the world as quickly as the COVID 19 virus itself.
Agree or Not, it Does Not Matter…….
Whether you totally agree with the position above or which side of the debate you are on for the purposes of this paper, it is irrelevant. This paper is not a political statement, nor offering better solutions or an exit plan to the world’s current predicament.
What this paper is about is laying the framework and tone for the current environment in which we are operating today and into the near or foreseeable future. It’s about understanding the context with which consumers are and will behave and how they will make new decisions from here on out.
We can’t judge this behaviour through the lens we use to see the world. We must use a new objective lens through which we view this new society. We now need to act and behave as social scientists if we want to fully understand the new Megatrends developing in a post-Covid 19 world.
Put Down Your Gun
I expect you will meet quite some resistance from many people, who still believe this global lockdown will end soon and things will return to normal in some sort of V-shaped recovery.
This is highly unlikely.
This COVID 19 phenomenon has already caused and will see many changes occurring in peoples’ behaviours. Many of these changes and new behaviours will be with us for quite some time and some will remain with us permanently.
As critical thinkers, entrepreneurs, marketers and people wishing to operate successfully in a new world, we must put our personal views or even hopes aside if we are to make sense of not only the future but the opportunities that lie ahead and for those who can and will want to take advantage of them.
An unstoppable domino effect has commenced, and like all dominoes falling the consequences of the first domino being toppled will continue on and be seen for many years to come.
Some outcomes of this crisis will be entirely and widely predictable, yet others will come about as a result of what is known as ‘unintended consequences’. Many economic, behavioural and social occurrences that will happen, both good and bad, we can not predict or foresee but will seem obvious in hindsight.
Over time things always change in life. Sometimes slowly, sometimes fast. However, when changes occurs, there are always consequences, some obvious and clear, others less so and very much a surprise to many.
But not everyone.
And hopefully not you.
Fortune Favours the Brave…
Fortune favours the brave for those who can, will and are prepared to see what’s coming. It may not always be with 100% certainty yet with some analysis and risk, you will have a far better chance of not only surviving this crisis but being able to take great advantage of it. You gain this advantage through awareness and therefore being ahead of the pack and quickly adjusting your thinking and planning to this new reality.
I mention risk. This process is not without risk. The future is new, always uncertain, and carries some risk of being wrong. However, that is the nature of entrepreneurs and those willing to take that risk and either fail or come out way ahead.
Many times this involves being ridiculed and thought of as being crazy by others who don’t see what you see, but this is not a reason to stop. When one has awareness and insight, through vision or self-education, that others who have not invested in themselves do not, this is a normal reaction. Much like the dire warnings once that the world is flat were wrong, people’s beliefs hold true until undeniably proven otherwise..
This paper does not and is not intended to see around every corner at every opportunity. There will be many corners and related opportunities ahead. Some very specific to the business or industry you are in. Others are more difficult but easier for you to see, only from your unique perspective. A good vantage point will give you an even greater advantage.
What I hope to achieve is to use this paper as a thought-starter for you and your teams, to let you know the dominos are already falling. This process has begun and is unstoppable. Change is here in many, many ways. The way we lived just a few short weeks or months ago has changed forever. Many things will never be the same, but it’s time for marketers not to wait this out but to get to work, so it is time to embrace the change.
How to Predict the Future?
“Most people don’t know why they’re doing what they’re doing. They imitate others, go with the flow, and follow paths without making their own.”― Derek Sivers
The 16th President of the United States, President Abraham Lincoln, is often credited with saying,
“The best way to predict the future is to create it.”
However, in order to create your own future and at the same time lower the probability of failure in a very volatile world, it is best to always be on a positive upward trend and preferably a MEGATREND.
I as a Professional Qualified Marketer and Social Scientist will identify 14 New Marketing Megatrends. These are not a rehash of societal changes as a result of technological advances over the last 10-15 years such as VR, Robotics and AI, although technology will play an important role as a driver that will help implement and speed many of these trends along.
This is also not a complete list of the trends we identify and work with our clients to get ahead of but is confined to just the fourteen that I believe are worth noting and watching to identify opportunities within and around each one.
As time passes these Megatrends will seem like and become the new normal, much like we all treat our smartphones today as something we have always used and cannot imagine or remember a life without them.
Soon we will be looking ahead at the road, with the new hindsight, at even newer emerging trends and further consequential Megashifts in consumer behaviour stemming from COVID 19 and the domino effect.
No shift mentioned here can be looked at in isolation and will usually complement other shifts as well as be the catalyst for new ones yet to come. Much like a pebble in the pond, the ripple and effects from what is going on right now will be profound now and in many years to come.
Winners and Losers
These shifts will be dramatic and absolutely devastating to some businesses once thought of as being ubiquitous, and it will shock people how fast once-mighty companies can and will fall.
Recent history has many examples of that – Kodak, Sanity Music, BlockBuster to name a few. However, out of the ashes again will come new models, new versions with new solutions to problems now or soon to be apparent, large and small. These solutions will be conceived and provided by millions of new generation entrepreneurs, many becoming household names you would never have heard of before, willing, able and with the courage to jump in and find these solutions to the multitude of new, never before experienced problems, the world is now facing. Some solutions will be slow and painful to work through, but others fast and ingenious.
It Should be a Good Game
I am fascinated by this time we are in, and what changes have already occurred and the many that are about to occur. I also am looking forward to observing how we as a species adapt to these on a global scale and lift ourselves to the enormous challenges we face.
These challenges are wide and varied, they are presented by both natural and unnatural forces, from well-meaning fools as well enemies, as well as from the predatory behavior from sovereign states, even our own government.
I look forward to observing how this plays out like gladiator rivals seeking to not only survive in unfamiliar territory take advantage of others in a Darwinian way. All of this amazing human behavior will now come to the fore for all to see and comment on, through our many social media channels we now have, no doubt.
The 14 Post-Covid Marketing Megatrends
Megatrend 1 – Contact Hypervigilance
Megatrend 1 – Contact Hypervigilance
One thing COVID 19 has done is made people not only aware but paranoid about touching things. Everything now poses a danger: supermarket trollies, escalator railings, elevator buttons, door handles. These are now seen as breeding grounds for germs. These things were never given a second thought by most people. Now they are ‘the enemy’. It won’t stop there. Everything people touch or come into contact with will now be questioned. Airplane seats, fruit and vegetables exposed in stores, hotel rooms beds, remote controls, shared office equipment and desks, rental cars, seats at cinemas and entertainment venues. It’s all a danger now.
Extra cleaning will be expensive, but a cost companies will have to bear and consumers will now have to pay for as added costs.
For marketers, it will become an advantage to sell cleanliness. For entrepreneurs it will be an opportunity to help these companies find ways to super clean these items or make them contactless through technology or high tech equipment that can be cost-justified.
For airlines, an example of this might be that there is some talk about reconfiguring the cabin seating or leaving the middle seat free to allow social distancing between passengers. For airlines, space is money. This will immediately lower their yield by 50% per passenger. It would mean an immediate price rise by 50% to justify this cost. This cuts airline accessibility price affordability and therefore overall demand.
Higher fares, fewer routes, pre-flight health checks and less free food: The coronavirus pandemic is ushering in a new era of air travel.A seismic shift is underway as the world’s airlines reassess their operations and how they will look emerging from the crisis. At eerily empty airports, mask-wearing and social distancing already show a behavioural change among the few staff and travellers left. A long shakeup lies ahead that is set to touch almost every aspect of flying after limits on movement unwind.“We should be prepared for a choppy, sluggish recovery even after the virus is contained,” Delta Air Lines Inc. Chief Executive Officer Ed Bastian said in a letter to employees this week. “I estimate the recovery period could take two to three years.”
A TRADE-OFF. New measures and the lack of consumer demand as a result of it, directly attributable to this new trend of Contact Hypervigilance will make flying in the future a lot more expensive than we have seen in the past. The social distancing space requires this will be the case alone never mind the added cleaning and safety checking measures prior to boarding.
So as marketers there might be a whole new category of ‘ budget travel ‘ or ways to market the old ways. For example, would passengers be prepared to pay less for their flight with the inconvenience of donning a low-cost hazmat onesie before boarding, with a mask, gloves, no food service and no onboard bathrooms ( go before you fly) offer? For long haul flights perhaps bathrooms come with a bathroom attendant that you pay extra for (like extra baggage charges) to clean after every use or every 60 mins.
Could you be the one with this plan, and/or the supply of these low cost disposable/ sterile recyclable suits? How many ideas like this can you create for hundreds of new cleaning/sterilisation problems companies like this now face?
It’s not just airlines, it is every business, every company that never had to contemplate a problem like this before. Cruise ships will have the biggest challenges of all but with entrepreneurial solutions with this Megatrend in mind, they will be solved.
Megatrend 2 – Eat-In Will be the New Eat Out
Megatrend 2 – Eat-In Will be the New Eat Out
In recessions, people tend to become more frugal with their money. It changes their choices in many cases but not their habits. So if a family had a habit or lifestyle where they would eat out say one night a week, they would want to return to some sort of normalcy, but at a lower overall cost.
One way to do this is to choose a cheaper restaurant within the Inferior Choices Megatrend. However, with Contact Hypervigilance now a big factor – even with an increase in social distancing requirements, consumer concerns will linger for quite some time, things such as:
- How clean/sterile are the tables, the salt and pepper shakers, the sugar spoon or sauce container?
- How often are these wiped and cleaned?
- Who has touched them before you?
So consumers, when faced with a new dissonance, will seek solutions that might satisfy their primary need (to eat out), balancing this with a competing secondary need (worry about the new level of cleanliness), to come up with a third option (get their favourite restaurant foods but eat it at home) – a new variation – which most businesses can’t see waiting for customers to return to normal and therefore might miss as their new opportunity.
So we will see the rise of affordable, quality, friendly takeaway food outlets demonstrating Contact Hypervigilance in their systems and processes being a winner here. Families can still forgo the cooking, pick up a restaurant-prepared meal, save money and eat in the safety of their homes.
This trend has already begun through forced lockdown takeaway offers only, from food outlets, but it is set to continue and grow in a big way. Food businesses will be well advised to almost forget entirely the retail aspect of their business, lower their sqm rental costs, and with it, their labour service costs and cater to this trend exclusively.
Megatrend 3 – Prep-in Foods
Megatrend 3 – Prep-in Foods
This Megatrend is significant but different to Eat-In Will be the New Eat Out. It has similar consumer behavioural motivations though. What they both have in common is the motivation of saving money, convenience and time-saving assistance to complete fast and interesting meals at home.
Despite the popularity of prime time cooking shows, most people have a limited repertoire when it comes to cooking at home and obtaining the skills of a master chef, while entertaining TV in real life, is much more sobering. This fact does not remove the desire and social pressure of producing ever more varieties of tasty food at home.
So enter the fast-growing trend of Prep-in Foods.
The best way to describe this is it is the likes of where companies such as Marley Spoon and Hello Fresh, marry Guzman Gomez, and other niche fast food chains for example.
So, feel like Mexican food tonight but don’t want to go out or are worried about the chain’s cleanliness?
Then order a fully stocked Mexican meal home preparation kit, with a free app containing videos that show you how to do the final assembly the enclosed ingredients already all measured out. The result – a fast, hassle-free, lower cost (then eating out) authentic Mexican in-home meal, as good as you might get at GnG itself or better, for those companies who are playing a long game.
There are countless niche markets and niche brand-building opportunities here. How many different kits could you create and could offer this on a weekly or bi-weekly subscription basis with rotating customised options? This week Mexican, next week Japanese, third-week Thai food, please.
Food is a massive market. However, restaurants and cafes are hard work, with low-profit margins, big set up costs, and big overheads. Prep in business models are just starting out and plenty of room for new entrants.
Megatrend 4 – King Cash Flow
Megatrend 4 – King Cash Flow
It’s a very real fact in recessions people lose their jobs, get pay cuts, have less income into their businesses, have lower reserves and lower superannuation investment returns.
They see lower dividends on their share portfolios, interest on their bank accounts and Cash deposits. Simply put – generally less cash flow and many cases critically so.
What they are seeking now more than ever, is new Cashflow opportunities. (reference *that is all a job is for many people – an unsophisticated cashflow system).
These traditionally abundant cashflow systems are disappearing fast and when they do some people make do and cut costs, but many others have no choice but to seek out new ways (ways they would otherwise never have considered before) to find additional or supplementary sources of cash flow. This will require new skills and training in most cases but also new vehicles to provide them with these opportunities other than jobs.
So as marketers how do you help these people?
Look for ways to help (both find and train them) to create additional cash flow opportunities they won’t find themselves or have never considered before. These could be franchises, mini businesses or business opportunities and active ways to make investments providing high or higher returns. We have clients right now that have already started this process and are getting spectacular demand for their services.
This is why businesses such as franchising or MLM distributors’ sales seem to do much better in recessions. They are easily proven and relatively low cost to join and provide people with immediate access to products and warehouse systems. In essence, people go out and buy themselves a job. Starting your own online business selling through Amazon or eBay would be another such example of a trend that has been growing fast before COVID 19 and is now set to explode.
There are literally hundreds of ways of helping people find these opportunities for entrepreneurs and for marketers to tap into this new and fast-expanding market place.
This could also include new opportunities in the real estate sector which will otherwise be in a decline. For example building small spaced low-cost housing, granny flats, dual lock conversions, any way possible to increase the yields on existing property, and use Real Estate Flipping and MySpace Megatrends thinking to find new opportunities in this market place.
This is one of my personal favourite Megatrends because of the enormous opportunities available to operate in this space.
Megatrend 5 – Real Estate Flipping
Megatrend 5 – Real Estate Flipping
When it comes to Real Estate, what do you think is going to happen to all those retail stores that close and never reopen again? To these companies with office space that can’t pay the rent and close or downsize? What will become of the millions of square metres of retail and office space with no tenants to fill them? Who will rent all these residential investment properties, if people don’t have jobs? What about all the hotel rooms sitting empty? What does this do to the value of the real estate yield and therefore their capital value?
It’s not hard to work this out – it plunges.
This Megatrend is about repurposing real estate assets.
Building owners/managers and investors will have a massive fall in revenues and like any other business owner, will have consequential problems servicing the costs of running this real estate: maintenance, mortgages, taxes, etc.
As I pointed out at the start of this paper, that one big fallacy in business that most people get wrong or just don’t understand is that ‘demand dries up’.
This is completely untrue. Like energy that transforms itself from potential to kinetic and vice versa and is never actually lost, demand also is not lost it just moves around and transforms itself too into different forms.
So what does this mean for you?
The first thing is to understand this ‘demand transformation’ manifestation with respect to your business and how it is now affected, but specifically in this case with respect to real estate.
Take another look at all this empty and soon to be empty space and ask yourself how can this be transformed into some others use that still has or will have rising demand?
Much of this real estate’s original use and demand will never return again. Some will of course so it might be worth sitting and waiting in that case! So, determine the difference between the two and find ways to jump onto this trend of Real Estate Flipping.
The theory behind this is that if a piece of real estate (commercial, retail, residential, industrial ) is not earning or able to earn income because the market has shifted, then it has little value to the owner. So even an inferior use attracting inferior income is better than zero use with zero income.
Examples of this are already starting to appear, and there will be many. Here is just one example of this new Megatrend. I am sure you will be aware that Hotels are largely empty. Rydges hotels is one of them and so they are Real Estate Flipping offering the following …
“Can’t go into your shared office? Working from home just not working for you? Why work from home when you can Work From Hotel. Our rooms are now available for day use between 7am – 7pm, so you can utilise our cosy spaces as your individual and private workspace, and enjoy in-room dining* delivered to your door. Your Rydges & Atura ‘office’ comes fully equipped with high-speed Wi-Fi, desks, chairs, fully stocked mini-bar* and complimentary tea and coffee. Plus, there’s a Dream Bed for you to relax on and enjoy a midday power nap (in your lunch break, of course). “
If you look below $65 a day is not their regular or preferred rate. Their normal rate is $169 per night.
So this is an inferior offer for use of the hotel room, and at a much lower rate, in fact, a 62% lower rate. But still better than $0.
Now, this may or may not work for them, only time will tell, but it is an attempt at looking for new demand and new markets.
This same thinking will apply to just about any real estate you can think of. As marketers, our job is to find the demand and then repackage the product. This is what we do and the demand for repurposing to attract yield and therefore maintain value in such a critical market is huge or will be soon.
There is demand out there for real estate, it may just mean Real Flipping the use and therefore the market you are targeting and moving to where the demand is?
Megatrend 6 – Holiday Patriotism
Megatrend 6 – Holiday Patriotism
Noun – the quality of being patriotic; devotion to and vigorous support for one’s country.
When you look up the meaning of the term ‘patriotism’, the part ‘ vigorous support of one’s country “ is the trend to watch for.
People will be almost manically turning to taking their vacations domestically and even locally, rather than internationally. While it might be labeled as patriotism, the driving motivation of this Megatrend has more to do with the climbing cost, lower availability of international flights, and mostly due to the massive inconvenience and physical intrusion and risk of international or even domestic plane travel.
Especially if you compare this to just hopping in your car and driving to the many beautiful destinations we have in Australia, that most people have never been to but now might just reconsider in a big way. This bodes well for the many remote and rural towns, holiday flats, Airbnb businesses, motels and hotels, especially if you are in a 2-4 hour drive radius of the big cities and near a nice beach. So get ready for this summer and school holiday onslaught, and keep those prices fair or you might just find yours is empty in a time of abundance, because people are now hypersensitive to price gouging.
International travel, even for business purposes, will be an unlikely option before the end of 2020, and when it does return, it will be a shadow of its former self.
There will be Contact Hypervigilance to overcome. There also will be less choice of flight routes and travel times. The airline costs will be higher due to added/needed health checks and security procedures.
Instead of being at the airport 2 hours before your flight, it might now be 3-4 instead. This is to undergo all the extra required health checks, blood tests, on top of the normal already frustrating and intrusive security checks we have become accustomed to up to this point.
It is likely that addition to needing passports, being x-rayed and ‘manhandled’ or let’s call it what its – flight groped, air*orts’ quarantine and border control will also quite likely require (to satisfy their insurance liabilities and consumers’ Contact Hypervigilance), us to carry new health passports, proof of vaccinations, undergo finger-prick blood tests and temperature checks, and an interview by some newly hired official to enquire about (in some stern voice) your previous whereabouts.
All this will be necessary of course unless we are forced to participate as a condition of the luxury of airline travel, to have all this ‘information’ captured through a mandatory tracking app that warns the airline or border patrol that you are on a new ‘health danger no-fly list”.
It is highly likely consumers won’t find this 3-4 intrusive process and inquisition very attractive as a good start to their nice holiday experience. All this is before they have even set foot through an aircraft door. In addition, this will compound even further when they account for the much higher price to pay for a ticket for this ‘privilege’. Compare this to the alternative, which is to load up the car and be halfway (or already) at their new domestic destination, enjoying the beach and unexplored corners of the country.
One other consequence of this lockdown is that business owners and managers have discovered a thing called Zoom, and realised that meetings far and wide can be done quickly and effectively without the need for such travel, they too will come to a similar conclusion and abandon or severely cut back on many such previous travels. With business travelers being the most lucrative segment of the airline’s product range, prices across the board will have to rise even more and airline schedules cut back, making airline travel yet again less enticing for all.
So the marketing opportunity is to seek the many opportunities for your business or company to redirect it’s focus to offer Holiday Patriotism products and services with Contact Hypervigilance in mind as part of your offer, ensuring you have Inferior Choices packages. These 3 Megatrends coincide all at this nexus and are about to boom.
Megatrend 7 – Smaller Closer
Megatrend 7 – Smaller Closer
Trends in SOHO – small home offices – had already begun quite some time ago. This is not new. However, what is new is that traditional home offices have primarily been used by startups, small or micro business owners. COVID 19 lockdown has forced all non-essential workers to work from home, if possible.
This applied to everybody and for the first time it included corporate and government workers who traditionally never had the ‘luxury’ or option of working from home.
The lockdown saw an immediate boom in the purchase of home office equipment and connectivity apps that enabled people to function remotely with the use of online conferencing facilities such as Zoom, Skype, etc.
I mentioned ‘unintended consequences’ earlier in the piece. This forced lockdown experiment will create some of those ‘unintended consequences’ and we will see a new trend – called Smaller Closer. This the growth of ‘remote working’ through the dawning on Management and their sudden realisation of two things:
1. That it’s entirely possible and efficient for people to productively work remotely, and,
2. The massive time and cost-saving possible, with no or minimal loss or perhaps even improvements in productivity, through its proper achievement.
If it hasn’t already, it will quickly occur to C-suite managers that working from home or a remote smaller office space, reduces travel/commuting and coincidently time wasted in unnecessary team meetings.
It is much harder to call or have meetings when people are not there to quickly summon into a conference room. With the savings in commute times with our ever-increasing traffic gridlock getting longer and longer, and extra 45 mins to 2.5 hours commuting each day is also a big employee benefit because it is time recouped on the part of a worker. This represents value as a fringe benefit time with their family versus it being dead time on a bus useful to no one.
Besides, working from home plays into another Megatrend with the workers’ concern highlighted in Contact Hypervigilance and management’s concern about the fiduciary responsibility and liability if they fail to provide and maintain a safe work environment.
And of course, there is always the major motivation driving all business decisions in this trend too and that is massive saving costs (especially in the current environment).
Sooner or later CEOs and their boards will realise that all the office space they thought they needed – costing thousands of dollars per sqm, can become a cost-saving space, perhaps in the many millions of dollars per year in some cases.
With less staff due to downsizing, and less staff occupying in their expensive offices, they will easily be able to renegotiate and renew lease space at a fraction of the size and cost they currently occupy. The market has changed, and as the market demand falls even further, they will as a matter of course, seek rent reductions and require less space, resulting in significant rent savings across the board (For landlords this is not good news so they will need to look to Real Estate Flipping as the new Megatrend opportunity themselves).
These same new time-and-cost-saving-focused CEOs and boards might even look to find economies in creating numerous smaller suburban situated office hubs – Smaller Closer. Where access and commute time are less, the vistas and external environments are greener, access is easier to walk, push-bike or self-drive to by their employees. They can conduct business semi-remotely but when working from home won’t do, they still have the option of a prestigious corporate office to meet clients and conduct business.
Within this trend, we see a move away from big enclosed office space, large high rise buildings, with crowded elevators, (even climbing stairwells will become crowded in the short term return to work).
We also see a reluctance to return to commuting to work on crowded public transport due to the close contact with thousands of other commuters. Another reason for people to work from home or close satellite offices. But for those who have no choice, this will spawn an increased demand for other alternative, cheap and convenient modes of transport. Mopeds, scooters, bikes that need little upkeep, are easy to store and park, yet give people their personal space to avoid contact as much as possible.
Companies will be under pressure for all the reasons outlined to decentralise, allow workers to work from home or smaller open-air windows containing low rise buildings, with access to parks and garden space for worker breaks.
The opportunity is to seek to ride this new wave and support it with products and services that facilitate all aspects of this trend.
Megatrend 8 – Inferior Choices
Megatrend 8 – Inferior Choices
On both a corporate and individual level there will be less money to go around through generally lower levels of economic activity. This is the nature of recessions. They are self-fulfilling.
The more people seek to save money, the less the next person or business down the line has and the less they will spend also seeking to save money. This will be across the board.
Any goods or services that offer people and individuals to save money on their current expenses will flourish in this time.
These might be ‘equivalent’ goods and services at a lower cost, or in some ways an ‘inferior’ good or service at a lower cost. Not everyone needs or will come to realise in seeking savings they need to have that premium product or service when an inferior one that offers the same or similarly acceptable result will suffice. Especially when the inferior choice offers significant or at least meaningful savings.
Timing is everything in selling inferior products. Recessions are the time to sell to people and companies who were once too busy or did not care about saving money, because the time to consider savings wasn’t available or wasn’t meaningful.
Recessions always present a significant opportunity for you if you can find or demonstrate ways for people and companies to save money in whatever form that may be. You might argue that generally, it is always the case that people are looking to save money. True in some cases, but Inferior Choices this is now a Megatrend in recessionary times because in many cases it’s down to financial survival and therefore becomes everyone’s job (or those who still have one) to shift focus into ways of doing this and will be in high demand.
So seek inferior products or services to offer to existing users, even if they are lower quality but still good enough to perform at an acceptable level.
Megatrend 9 – MySpace
Megatrend 9 – MySpace
If you were a hip, young internet user in the early 2000’s you probably had a Myspace page that was ‘your space’ in which to live in the online world. Myspace was sold by its original owners to media giant News Corporation in 2005 for a very hefty sum of $580 million, and while it continued to see success, it did not last much longer. The decline of Myspace began in 2008 when Facebook started becoming more popular. There were many factors but let’s just say that Facebook killed Myspace and leave it at that.
The MySpace Megatrend is not in reference to online space in this context. It’s 100% physical and is motivated by our post-COVID 19 need to have our own physical space in the world in which to work, live, play (and commute).
This Megatrend is largely driven by three confounding factors:
1. The already discussed Megatrend Contact Hypervigilance and.
2. The breakdown of the traditional family unit – empty nester separations/divorces.
3. The high cost of owning our own homes and rents (although this cost is set to fall as real estate prices fall, so will incomes and tightening of lending standards keep this cost relatively high).
Today the cost of living and desire to live with others be they family members or simply flatmates is emotionally high, but people have endured this through a lack of economic alternatives. So cohabitation has been the answer when living in a 3 bedroom sharing with 2 (or more) others cost less than living in a 2 bedroom with 1 (or more) others which cost less than living in a one-bedroom by yourself (or more).
The point being is cohabitation has been the norm simply because of the economics to landlords of building 2 and 3 bedroom apartments and the prevailing ROI for these versus 1 bedroom or studio apartments.
This trend is about to change. While cohabitation will not disappear, the demand will fall and out of it will arise the need for small internal space but fully independent, affordable living. People will start looking for ‘their own space’ albeit small. It’s still theirs. Everything just as they like it. No dirty bathroom, kitchens and living spaces by flatmates, or family returning home who financially need support or a place to live.
Think of spaces like Granny flats, dual lock apartments, extra room self-contained home extensions. Think of a normal home with 3/4 bedrooms but each has its own bathroom and kitchenette, TV, and entertainment system. A common area might just comprise of a lounge room, outdoor spaces, swimming pool and BBQ area.
Could this be an opportunity for Real Estate Flipping to provide a new supply for this Megatrend?
Megatrend 10 – Make It Here
Megatrend 10 – Make It Here
The lockdowns, especially early on, has caused people for the first time in their lives to see empty shelves in the supermarkets. Many of the items sold out were indeed made in Australia, but the shortage of things like hand sanitisers, hospital ventilators and other personal protection products (masks gloves, etc), primarily made in China, opened the eyes of many people taking note to how geopolitically we are exposed our reliance on so many manufactured or finished products being imported. In critical times some items don’t matter and a shortage is just an inconvenience but in other times a case is being made that these are in our national interest to be able to guarantee supply/access.
The only way to guarantee supply in a hostile global situation or where demand massively outstrips supply is to ensure that these are manufactured locally with adequate local raw materials to ensure this supply.
Australia, like other countries and corporations seeking maximum profit for themselves, followed the idea of globalism and the notion of a competitive advantage which formed the structuring of our economy as we see it today.
Of course, it makes no sense to make something in Australia when it can be made and imported far cheaper from elsewhere and that elsewhere in most cases meant in China and perhaps India. No one can argue with this economic logic. Except when the supply becomes one of national importance and the protection of the Australian people. This is the reason put forward for the manufacture of our submarines in Australia rather than internationally, even if they cost more, which they do. Here is an excerpt from news.com.au:
The coronavirus pandemic is now bringing attention to how much Australia and the rest of the world depends on medical products that may actually be coming from China.
Australia has been “absolutely dumb” to become so reliant on goods from countries like China that it may impact on the country’s sovereignty, an expert says.
Recent inquiries in the United States, which is the biggest single supplier of pharmaceuticals to Australia, have suggested America imports most of its active pharmaceutical ingredients (APIs) from China or India, but India also sources a large number of inputs from China.
“If China were to cut off its supply of drugs or APIs to the United States, it could lead to a public health crisis.”
The other main argument that will arise for the return of manufacturing to Australia is the quality of the jobs we create. It has been widely said that we have become a nation of cafe and coffee shop owners. Effectively a service economy with little manufacturing base and simply an exporter of raw commodities, tourism and education. Plus of course, selling out of our real estate and other natural resources such as water.
We see a mega shift occurring around manufacturing with our understanding of how important it is that we reverse this trend and start to make things in Australia again.
Not all things, but everything we can and that is seen as critical to our national security and national interest. Given our historically higher labour costs and energy costs, it makes no sense to try to manufacture for example motor vehicles and other big industrial equipment. We tried that and it failed despite the massive subsidies poured into it.
There is however a plethora of critical items and other niche markets available for entrepreneurs and marketers to target and present a case for the reestablishment of these manufacturing businesses, and with the advancements of AI and Robotics, this will allow us to set up and compete with higher productivity and therefore lower our unit costs, while still adding quality jobs to our economy.
Here is a recent example of what we believe will be a long term shift and trend to a resurgence of Australian manufacturing. However this $215 million will increase to the billions (or should anyway) .
The Morrison government has tipped $1 million into the revival of the once-popular chocolate bar through its $215 million Modernising Manufacturing Fund (MMF), enabling Robern Menz to bring forward its promise to return Polly Waffle to Australian supermarket shelves.
Megatrend 11 – Only Real Friends
Megatrend 11 – Only Real Friends
Recessions take a big bite out of discretionary spending markets. This 2020 recession will be deep and long but it has been compounded by the media pounding into us the need for social distancing due to the imminent life-threatening danger of large crowds.
These two psychological traumatising factors will not dissipate quickly or easily. This is bad news for the traditional conference, sporting, entertainment and wedding industries.
Human dynamics depend on social interaction and these formats above are ways of expressing this in our society. This is part of what makes us human. But so is dealing with fear. Whether it’s real or perceived, our brains can’t distinguish the difference.
The result of this is that we will see a new trend emerging out of this COVID 19 lockdown, and that is the recommencement of social gatherings. However, the budget and the PTSD of the threat of COVID 19, the suspicion of other people and now with Contact Hypervigilance in place the resumption of social or group gatherings and activity will be slow and much smaller by and large.
We are not suggesting large gatherings won’t happen but it will be much harder for marketers to sell, and more costly, to convince people to attend and we would be well advised to seek to market smaller, lower budget events for some time. These will need to be more intimate where people will invite and feel more comfortable amongst real friends.
Weddings will resume but will be confined to only family and close friends. When wedding invitations go out, invitees will want to know how many people and who will be there before the RSVP is returned.
When pubs and venues open it is likely they will do so with ‘cluster distancing’ promoted as a safety feature of a night out. This might involve pubs with designated areas that only a set number of people can cluster together. Entertainment venues will open with live performances to small audiences.
Larger venues like sports stadiums will, it appears, need to lower the costs of this entertainment to get any volume attendance back (as will airlines and holiday destinations), and enforce social distancing in the seating arrangements by blocking 2 out of every 3 seats. They will not only have bag searches, but temperature checking marshals screening you before you enter to dramatise and limit their legal liability for opening these venues.
The announcement of a miracle vaccine might steepen the curve in terms of cluster numbers, but this won’t change the dire financial and economic situation many people will be in that simply will not be able to afford as much discretionary spending on entertainment as they did before.
It will be quite sometime before anything we saw before COVID 19 returns to ‘normal” and so new formats will emerge which will take on this form of gathering with fewer people who are more familiar with each other.
The opportunity for marketers is to find these new formats to resume social, sporting and other events and insurance companies to offer insurance to cover the liability aspect for promoters.
It’s one of the more surprising trends of living in lockdown – but a recent poll shows the public could be reluctant to get back to life as we once knew it.
As Australia prepares to ease restrictions and thoughts turn to how to negotiate a social life changed by COVID-19, new polling in the UK shows fear of the virus means many are not so keen to get back to their old ways.
An Ipsos MORI poll found two thirds of people (67 per cent) would feel uncomfortable going to large events like sports games or concerts in the post-virus world.
Three in five people would feel uncomfortable on public transport or going to bars and restaurants. And while one third of (mostly younger) people said they would be happy to eat out or go for a drink, just 20 percent of them would be keen to take public transport to get there.
As for the eventual return to work, half of the people said they are comfortable going back while one third would be nervous to do so. Most people are also uncertain about sending their children back to school.
Ipsos MORI’s research director Keiran Pedley said the results show there is a “clear unease” about the thought of ending lockdown.
“In particular, clear majorities of Britons are nervous about using public transport again or going to bars, restaurants or live music and sporting events. These numbers suggest that it will take some time for parts of the British economy to return to any semblance of normality, even after lockdown has ended.”
Megatrend 12 – Newskilling
Megatrend 12 – Newskilling
The world has changed in so many ways.
Our education programs and their focus are institutionalised – this by pure definition means inbuilt resistance to change. Most people are slow to see this as the first reaction. To not accept a new reality, particularly when it happens fast. Any first-year psychologist will tell you the first stage in the 5 stages of grief is denial. This is what happens in any fast change or life trauma.
When this occurs people are not prepared. How could they be when they were not expecting it? Therefore they don’t have the skills or knowledge on how to deal with a crisis and the unintended consequences that will emerge from it.
They will follow along waiting to see what happens or for leaders to emerge to tell them what they need to do, what steps to take and how to deal with issues. The role of leaders is to help people come out of denial and adapt to change by learning new skills and craft.
This will be needed now more than ever. Newskilling is not upskilling or just training. It’s much more than that. It can be compared to the vast difference between going to train at the gym or going to survival training camp – learning jungle survival skills, things we never needed before metaphorically how to find food and shelter, and defend against the dangers of other predators doing the same.
It’s identifying what are the core skills that are needed in this new reality that people are oblivious to or simply lack.
This could mean training in things like ‘resilience’, ‘mental toughness’, and ‘leveraging what you have’. It could mean getting people ready for the new jobs that will emerge and replacing those jobs never returning, for example, those emanating from advances in technology that will replace many of the old high cost, unproductive jobs left behind in the carnage. It could mean teaching people how to deal with higher levels of anxiety, avoiding depression, dealing with the inevitable uptick in domestic violence coming from lockdown as well as financial duress. It could mean teaching people how to become self-sustaining, self-sufficient and self-reliant in so many ways other than only seeking a job in a skill or industry that may never return.
This is not the role of government. A recession was imminent at some point. The fact that we dodged one for almost 30 years has led people to never see around this corner. It is here now and it is the responsibility of the individual or business owner to now take the lead in Newskilling their people or themselves.
It’s a shift of key skills that need to be taught to the Australian population, starting in schools and to people who are in the workforce or now even self-employed, who have never seen or faced much hardship in their lives. (This would include most people in Australia under the age of 45) .
This opportunity is for companies and marketers to take this leadership position and identify these skills in this new economy, and create education products/programs to help these people in the time of massive unemployment, to reskill and become valuable again to themselves and acquire skills needed for this new reality.
Megatrend 13 – ShowCasing
Megatrend 13 – ShowCasing
There have been predictions of retail shopping being taken over by online sales for many years. The lockdown collapse of retail sales and the natural switch to online as we observe right now might strengthen this case even more for many people. A little more than 10 years ago,
eCommerce was at 5.1% of total retail purchases (USA). Ecommerce now accounts for 16%. Here’s a chart of eCommerce sales vs. total retail sales from 2007-2019:
It appears that this trajectory will continue up and accelerate, so everyone should push even harder into online-only distribution channels. This might be a correct assumption except the human dynamic tells us that people still have the need for physical interaction as a way for the establishment of trust.
If this was not the case, Facebook and other social media would replace human interaction completely rather than supplement it.
Trust is another massive hurdle for online shopping. While people now trust big online brands like Amazon, this is not the case for smaller brands who can get lost in all the online noise.
There are many reasons, too many to cover here, that retail will not disappear and be replaced by online, but its form will change into a new format, one we call ShowCasing, which we see as becoming the norm, taking market share from both retailing and online sales. Why? Because it is both!.
ShowCasing as we see it is a new hybrid channel of retail and online shopping combined. Separately both have their advantages and disadvantages but this new era will see marketers push the boundaries to try to keep all the advantages and remove the disadvantages.
For those of you running ahead of this, this is not ‘click and collect’.
That is just a first step.
So first let’s explore the major disadvantages of online shopping from the consumers’ perspective. Well, there are a few major items – trust, credibility, quality and service that is almost impossible to judge when first encountering a store or brand online.
Next, let’s list the disadvantages of retail again from the consumers’ perspective – price, price, price and increasingly limited range, and service. Why is this the case? The retail business model contains massive inefficiencies that take a product that costs $10 to make to be sold for $50-$100 by the time you get it.
ShowCasing brings the two closer together where we think ShowCasing will bridge this gap for smart retailers (or those who hope to survive) and ever more scarce shoppers.
So how does this work? The cost of running a retail operation is high. Mainly due to the cost of:
- Rents related to square meterage needed to hold and display stock items and ranges.
- Staff needing to be present to offer advice and service. Much of the time is unproductive and inefficient due to unpredictable levels of customer traffic being random through staff shifts.
Not to mention the cost of having to make a huge capital investment in their stockholdings to ensure stores are optimally stocked so when customers visit they don’t leave because they could not find what they were looking for. Or even worse they did not receive the service levels required to ensure a sale was made.
Add in the cost of shrinkage (retail word for theft) and wastage as a result of predicting the wrong levels of demand and having unwanted stock remaining (hence the 70% discount sales now a feature of retail business).
ShowCasing in its true form eliminates most of these issues for a retailer, but still allows them to have an important retail footprint. Except this new footprint is much much smaller because it requires the retailer to hold no stock, just have display product samples and can ShowCase their products through a bank of big touch screen displays that customers can be tour guided through by the service attendants, discovering their needs while helping them navigate the various product options and find a solution to their problems.
This is bringing online into a retail format where retailers can dramatically lower their costs on just about everything yet can have a retail presence and maintain high levels of credibility and service instead and ‘facilitate’ online sales.
Let’s use a case study and example of this to demonstrate how this is entirely possible and will be something to watch.
How to Buy a Suit!
Say you are a male shopper and you want to buy a new suit. Your options are to:
- Visit men’s clothing stores and try to figure out the various styles, brands, sizes, colours, etc. with little help or service available in 99% of the cases. You can only select from whatever product is there on that day. You might not find what you like so you leave without a suit and the retailer is left with no sale.
- You can go online and try to buy a suit but do the pictures represent the true product that you will get and what if it doesn’t fit your liking? It means the wait and inconvenience of repackaging the suit and return shipping at your cost hoping you actually get a refund?.
ShowCasing eliminates all this. Your experience would be something like this:
You go into the store. The attendant takes a picture or a mirror with inbuilt cameras scans you for your exact measurements that go straight into their database. They run you through the various style suits they can make on-screen and with a simple screen touch shows you in the mirror or through VR glasses how you will look wearing that exact suit. To be sure you are happy, they have one of every size jacket and pants right there, in each cut or style for you to try (perhaps not in the colour or material you may want) but just to ensure you are happy with the feel (this is the component most important that online shopping cannot reproduce – High Tech but Also High Touch which will be the Showcase competitive advantage).
They then run you through swabs of the 223 different materials they can offer you at the various quality and prices for each one in the cut and style you have already tried on all while viewing yourself right there on their big-screen TV.
You tap your credit card and the order goes not to a warehouse but to a factory with robotics that is programmed to pull the fabric you have chosen, laser-cut your suit, stitch and fold into a box to be shipped to you.
All this in a matter of minutes. In a day or maybe two, you have your tailor-cut suit as you wanted it, but at half the price that a traditional retailer would have to charge you to account for all the retail channel inefficiencies.
Who does this already to a large degree? One of the most valuable companies in the world. Take another look at the Apple stores. This is Showcasing! Their version of it, however, does not keep you waiting to get your order. They have a storeroom close by, but imagine the savings they too could make if they could simply take your order and ship you the product. How much more efficient they could be? How much more you could save?
Megatrend 14 – Micro Solopreneur
Megatrend 14 – Micro Solopreneur
Necessity is the mother of invention. A need or problem encourages creative efforts to meet the need or solve the problem. This saying appears in the dialogue ‘Republic’ by the ancient Greek philosopher Plato.
When millions upon millions of people no longer have jobs, they have one of 2 choices:
- Become dependent on the goodwill of others (governments, parents, charities, others) or,
- Become creative.
In Australia and other western economies, jobs have been abundant. It’s been a job-seekers market with full employment reach in many areas for the past 30 years. This meant if you left your job or didn’t like what you were asked to do, no problem and off you go to another waiting close by.
For the foreseeable future, this is gone. Predictions of unemployment rates of 15% to as high as 30% are forecast and this is not good news for people whose only skill is applied to working for someone else.
As covered under Newskilling, new skills will need to be learned for those who don’t like option 1 above on how to become self-employed and not seek a job as this will be hard to find but rather seek out what economists call demand. This is what this entire paper has been about, predicting these major shifts in demand.
And so these millions of people, many of them will through necessity need to become quite inventive and find ways to make money from whatever base or leverage they have. (Of course, the more assets and knowledge you have the higher your base and better your chance of finding these opportunities).
Regardless, this Megatrend sees the rise of millions of people finding new cashflow opportunities for themselves. Some will resort to crime, others to low paying manual freelance work – washing cars/ washing windows, for example, others will offer to take on products as free agents and sell for commissions and so on.
This in and of itself is a whole new market or fast expanding one that will see demand increase for any products, services, knowledge and ways of helping these people take their first steps to their new status of Microsoloprenuer.
MegaTrend Summary
In this paper, we have outlined just 14 Post Covid Marketing Megatrends for you.
Each has deep roots and will sprout up many opportunities. However, like the Rorschach inkblot test which is a type of projective psychological test created in 1921 by a Swiss psychologist Hermann Rorschach, these trends are there for you in the same way, to see what you see, and to interpret what you interpret from this, and translate them into opportunities for yourself, your business or your company.
I wish you good luck on your road ahead and seeing you along the way at some water stop where we can compare notes!
If you would like to consult with Brian Sher or get help from The Fortune Institute, he can be reached at brian@thefortuneinstitute.com.
Brian Sher
(Marketing) University of New South Wales.
Brian Sher, over 25 years, has established himself as a respected pioneer and business growth specialist. He has helped countless businesses grow over a 20 year period including startups as well as businesses doing tens of millions of dollars per annum. He has an outstanding reputation in the business world and is a successful best selling author on the topic of business and marketing. He has been involved in helping many businesses grow and expand through his various companies and is The Fortune Institute’s CEO.