Trends to Watch

Various studies have suggested that shocks to the system—such as wars and epidemics—tend to accelerate trends that were already there rather than create whole new trends; I think that will primarily be the case with the current pandemic. Here are some key trends that fall into this category:

Working via electronic means. In many companies, over 80 percent of employees have been working from home during parts of March, April and May. I believe for the most part this will prove to companies that it is in large part a viable approach, although it is by no means desirable at this sort of level. However, I expect that the trend of working remotely from home, whether full time or part time, will accelerate. This will reduce companies’ need for office space as well as reduce miles driven by car. I believe this will tamp down to some extent the recovery in oil demand over the next 18 months.

Online purchasing and contactless delivery. Amazon has proven to have the ultimate pandemic business model. Millions of people who have not previously used online grocery shopping and delivery have been using it during the pandemic, myself included. I believe this trend will continue, although of course some people will return to shopping in physical stores when it is safe to do so. You may want to review the extent to which you offer products to consumers online and the ease with which they can order and have products delivered. You may want to think about “contactless” delivery of products and services and whether this trend can benefit your company in some way.

Focus on air quality. I have seen many articles focusing on how clear the air in China was during the shutdown period, with estimates that air pollution levels dropped by about 25 percent as coal-fired plants and industrial facilities ramped down. I think this will raise the already significant attention to air pollution in China and perhaps lead to accelerated environmental legislation and cleaner power generation and transportation options. This may extend to the U.S. as well, depending on the political environment after the 2020 presidential election.

Trust as a business differentiator. I wrote about trust as a key business attribute and differentiator in my May 2018 column in the wake of several highly visible public trust lapses by companies such as Wells Fargo and Facebook. More recently, we have witnessed issues at Boeing as well. Trust emerges again as a key factor in buying decisions during and after the pandemic: Do I trust that a certain company is keeping their workplace and products safe? Do I trust that a company is giving me honest information about product availability and delivery timetables? As an employee, do I trust the company’s information about my job situation and the company’s future? Consider how you can further demonstrate your company’s trustworthiness to customers, employees and the community during and after the pandemic.

Wealth disparity. The Democratic primary debates in 2019 shone a light on wealth disparity in the U.S., and the pandemic has amplified it even further. While the more affluent people have been able to stay home and work on their laptops with Zoom, others have been on the front lines at grocery stores, hospitals, food delivery services, food processing plants and the like. Others such as nannies and home cleaners have lost their jobs and have limited resources on which to rely during the shutdown period. Some CEOs (especially in hard-hit businesses such as airlines) have cut their own wages and committed to no or limited layoffs. 

I expect the next five years to bring sharper focus on wealth disparity, including elimination of loopholes for large companies paying low taxes and increases in minimum wages. Consider how you are treating all levels of employees in your company and whether some inequities should be addressed.

The big get bigger. The trend towards merger and acquisition activity leading to larger and larger companies has been going on for some time, and I believe the pandemic will accelerate this trend. In the oil and gas business it seems likely there will be further consolidation and that some companies may not survive the disastrous low oil price and low demand environment. Consider whether the current environment offers your company a means to become larger or better with respect to geographical or product portfolio assets.

Rethinking globalization. Globalization has gotten a bad reputation over the last few years in respect to creation of improved corporate profitability at the expense of local jobs. During 2019, this line of thinking extended to embrace the view that China had been taking advantage of the United States for some years and the trade imbalances and intellectual property issues needed to be addressed. The current pandemic, which is reported to have originated in China, further exacerbates this narrative. 

I believe we will see accelerated attention to more regionalization of manufacturing and desire for shorter, less risky supply chains. Consider how you want to position your company vis-a-vis this trend. You could choose to go with the trend and reduce reliance on imported raw materials. Or you could choose to take advantage of potentially lower-cost supplies from Asia or other regions that may be left with excess supply. In any case, I suggest you review the risks in your supply chain and renew focus on reducing such risks.

Keep an eye on these trends and how they may affect your business in the short- and medium-term. Stay well!

Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. Email her at saralefcourt@gmail.com or phone (908) 400-5210.