Re-emerging from Lockdown: Plus Ca Change or Evolution?

Posted on Friday, June 12th, 2020

It’s very difficult to get a clear perspective on something when you’re stuck in the middle of it.

From the inside looking out, the lockdown and its effects on the economy look set to become transformative in a way that will be profound, and may be long-lasting.

But then again, the recent queues outside the newly-reopened branch of Ikea in Warrington might suggest that human instinct is to try an reimpose a sense of normality at all costs.

In some sectors, customers’ habits may change permanently. In others, the legacy of working from home may have an effect on things like office accommodation, and even the nature of how city centres will develop in future.

Reboot or Reinvention?

Different sectors have experienced the effects of lockdown in different ways.

Hospitality, for example, continues to take a massive hit, and it’s not clear how many restaurants and bars will be able to survive if they have to maintain social distancing measures.

One solution is that restaurants schedule in specific sittings, aiming, ultimately to regain around 50% of covers over an opening period.

However, this also highlights the importance of behavioural change:

  • Customers have to want to return, and
  • They have to be prepared to do so under new rules and guidelines around staggered attendance and dining.

People will be looking for a road back to normal, but this will not be straightforward.

Everyone in the loop will have to adapt.

The economy is made up of interdependencies and a huge factor in businesses re-emerging successfully will be confidence on the part of customers, retailers and providers.

The Solvency Challenge

Government interventions and programmes have injected liquidity into the economy but these cannot guarantee ongoing solvency.

For many businesses, there is now a gap between revenues that are much lower than expected, or non-existent, and looming payables.

These payables will also include emergency loans which businesses will have to pay back eventually.

Currently, many firms are reeling from the inability to do business normally. Now they must somehow adapt to try and do business in ways that will be different to normal.

They cannot rely on an expectation of customers to return to how things were, if external circumstances still mitigate against this.

These circumstances include measures such as social distancing, restricted public transport and the potential threat of a second wave of infections followed by a return to some sort of lockdown.

How to Adapt to Re-emerge

For many businesses to survive the times, they must find ways of adapting to shifting circumstances and, where necessary, change their offering.

How will this work in practice?

It will be a combination of realistic risk assessment and having the agility and willingness to adapt.

In the office sector, the shift towards working from home is likely to have long-term implications, especially for office accommodation in city centres. It threatens to halt the co-working revolution in its tracks.

Meanwhile, for many businesses, the whole notion of what constitutes customer service will have to change.

Instead of breaking down barriers between the customer and retailer, customer service will be about erecting and maintaining them to emphasise safety and security.

Already, companies have had to adopt remote conferencing and meet-ups as substitutes for face-to-face interactions. Zoom and similar platforms are, in many situations, the new normal.

Are There Positives?

The fact that there is a growing momentum to re-start the economy is cause for optimism, but it is tempered with uncertainty, because no one knows how all this will play out.

Do queues outside drive-through McDonalds and Starbucks illustrate a certain resilience, or just a desire for something different after weeks of the same thing day in day out?

Only the coming months will be able to answer this.

The important thing for businesses and business owners to do is look for support from their peers as well as from Government and other bodies.

Sometimes, ideas can come from unexpected sources, and a fresh perspective from outside eyes can be helpful when you’re feeling stuck.

The future is not fixed, but this can be a good thing too.

Stay Connected

MEG is Manchester Enterprise Group, normally networking in the heart of Manchester. Like many others, we’re not meeting up face-to-face at the moment, but we are staying connected and exchanging information, insight and stories.

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