This bizarre period is going to be over sooner than later, and when it does end, we are going to see some significant changes. Here are six predictions:
- Expect a mini-baby boom
There are at least two things that occur when people are confined together: Divorce or babies. So, the current lockdowns across America could benefit the toy industry as the birth rate hopefully rises nine months from now due to an increase in amorous play as a way to pass the time.
- The recovery will be uneven
a. The recovery is going to come sooner and later, depending upon the nature of a retailer’s consumer base. There is going to be a great deal of pent up demand for goods and services, but hourly workers are going to come out of this with empty bank accounts and increased debt. As a result, they may have the demand but not the means to satisfy it. Those who retail to low-income consumers will see a slower recovery.
b.Those who have money will also experience pent up demand but will have the capital to meet their needs and desires. Therefore, those retailers who cater to more affluent shoppers will see their business respond more quickly than those at the bottom.
c.Products that are currently in demand, anything from Tylenol to toilet paper to puzzles and games are going to face sharply declining sales when life gets back to normal. Why, because people are going to be sitting on an abundance of Tylenol, toilet paper, puzzles, and games. Those products which have been overlooked these last few weeks are going to see a surge in demand.
- Retail bankruptcies will increase
No matter how strong the recovery, retailers who have been on the brink are going to slide into bankruptcy. As an example, venerable retailer Neiman-Marcus announced on March 24 that they are considering filing for bankruptcy.
- Delayed product introductions and problems with licensed products
Chris Byrne, my co-host on The Playground Podcast, is predicting that we will see some of the new product introductions, particularly those that are more sophisticated in their technology, postponed until 2021.
Chris also predicts challenges with uneven inventory due to delays in movie releases that, because of the changed release dates, will not match up with product introductions.
- Personal space will remain expanded
You may or may not be familiar with Proxemics. It is the study of personal space and the impact that one’s environment has on how much space a person needs. I can recall reading Edward T. Hall’s book, “The Hidden Dimension,” which, to use the book’s description, “…demonstrates how man’s use of space can affect personal and business relations, cross-cultural interactions, architecture, city planning, and urban renewal.”
Mr. Hall’s book described the various distances most people require between themselves and other people. Above is the graph he developed.I predict that the current need to maintain a minimum of six feet of space between individuals will not quickly go away.
- Cold and flu transmission will be down in 2021 and 2022
We are learning lots of good habits about how not to pass on diseases. For example, what was a tedious measure (20 second-hand washing or remembering not to touch your face) are going to become instinctive, and the health of all will benefit.