I think we may be experiencing the most revolutionary changes in business at large and our own lives that has occurred since the Industrial Revolution of the mid-19th century.
That revolution was brought about largely by the introduction of industrial machinery that overnight made almost all of the hand crafted skills obsolete. Untold thousands found themselves faced with instant redundancy. They had to either learn a completely new skill, relocate, live on charity, or protest this great change.
We already have learned of the immediate decision by many companies and industries to allow workers to work from home where possible. Given that opportunity, many employees decided to take advantage of this and relocate to a state with lower taxes and lower cost of living (Gallup reports that 62% of American workers worked from home due to coronavirus concerns). The immediate impact on real estate was to see domestic vacancy rates in many of the more expensive cities increase as people moved out, accompanied by a concomitant reduction in rental rates and housing costs in those cities. On the commercial real estate side, we will see that companies will need less commercial space to conduct their businesses resulting in increased vacancies in office buildings throughout the country.
For individuals deciding to work from their homes, this could well mean that there might be no immediate need for office wear and the cleaning of the suits, shirts, blouses, that were required to wear to an office. Therefore, cleaners, tailors, and retail sellers of apparel may all suffer loss. Perhaps workers get in the habit of dining in instead of going out for lunches. An industry already crippled by restrictions will be further damaged. Of course, to meet the demand for in-home dining, restaurant delivery services, pre-packaged meals for in home preparation, and grocery stores delivering to the door step will flourish.
The above are obvious and I am confident you have already thought of them or even experienced them first hand. But have you thought of the fact that as business fold their doors, the accountants that prepare their financial documents now have need of fewer employees to meet the diminished need this retrenchment has brought about? What about the direct supply chain of materials to office and home? Remember the great toilet paper shortage? And other items missing from grocery store shelves?
Of course, our recreation choices have been effected. Motion picture theaters have largely been shuttered to comply with isolation requirements. What will this mean to the business of making motion pictures and how they will be marketed? Will movies now go directly to pay for view options and bypass theaters entirely as Warner Brothers has done with HBO? Perhaps we could see the revival of drive in movies where social distancing is automatic.
You may be thinking that given enough time post virus, we will return to many of the activities and businesses that are suffering now. You will be correct that restaurants, entertainment venues, and recreational sites will see a return. But what if as few as ten percent of us decide to permanently embrace a life style change that means we don’t go back to pre-virus habits. What if just a small percentage of those people who purchased an in home hair cutting kit decide that they can continue to cut their hair at home and save money and the trip to the barber shop? What if some of the folks that purchased streaming devices like Roku decide that this is more convenient than going to the local theater? A great deal of businesses operate on a margin of profit of less than 20 percent and for them, even a slight decrease in customers will mean closing their doors.
Each of us can think of any number of other enterprises, large and small, that we have used or been employed in that will be adversely and permanently impacted by this prolonged environment.
Conversely, just as in the Industrial Revolution, there are those business that have either emerged or enlarged in response to the new normal being forced upon us. For example: cleaning services that are disinfecting workplaces; delivery services of food and material that we used to pick up in person; games makers including jigsaw puzzles as well as computer games; fitness equipment now that we don’t go to the gym; distance learning and tutoring services: home improvement stores to give us the tools and supplies to finish those projects we’ve put off for so long; mask makers; etc.
Like the Industrial Revolution, there will be many casualties among those who either cannot adapt to the new business environment or those who will not (see the Luddite movement https://en.wikipedia.org/wiki/Luddite) and vainly rail against, sometimes violently, a change they refuse to recognize. However, there are limitless opportunities for each of us here. Our experience in adapting to changes brought about by retirement or health restrictions can easily be the source of vital resource to many. And, to the extent that we wish to participate directly, there are myriad online learning opportunities available for free or at reduced cost that will equip us to adapt to and thrive in the new reality.
I don’t think we have the ability to sit on the sidelines and watch this world-changing phenomenon take place without paying a terrible price. Get in, get new skills, adapt our own life experiences, but don’t just sit there – get involved.