by Abe Sherman – CEO, BIG – Buyers Intelligence Group
July 15, 2020
Business has been good. In fact, as more stores open, many have seen record-breaking sales in the months of May & June. Optimism and enthusiasm have definitely been on the rise as customer’s buying behavior has proven to be resilient despite an expanding once-in-a-century global pandemic, social unrest and a higher unemployment rate since the Great Depression.
Trillions of dollars in stimulus loans and direct deposits into businesses and consumers have staved off a total economic collapse while the dramatic shuttering of businesses, schools, and sports, as well as a near shut-down of all air travel, have yet to dampen the spirits of a world hard hit by a blow they didn’t see coming. The result? Christmas has come early for many in our industry and what seemed hopeless in March, is now, in July, looking possible; a return to business as usual.
So, what’s my concern? Like many of you, I have been focused on the COVID of now, but as businesses begin to reopen and other parts of the country quickly follow in the footsteps of the states hardest hit, my focus has changed. What began roughly five months ago in the NY/NJ areas is just getting ramped up across the country, but now it’s July and COVID numbers are soaring with >50,000 cases reported daily.
From March to June, the economies of many of our major U.S cities have been dramatically impacted in all ways; whether economic, social, travel, or health related. None more so than the Northeast region and specifically New York and New Jersey. For the areas of the country that are just now experiencing a ramping up of COVID cases, we have to think about the impact this is going to have four months from now – which will bring us to November and election day.
Although more people are getting back to work each month there are many millions of people still not working; some have simply chosen to not go back to work while others are unable to due to diminished opportunities. Whether by choice or from being laid-off, I suspect there is going to be a significant rise in unemployment numbers next year.
To this point, I took a brief road trip a couple of weeks ago. The woman checking me into the hotel introduced herself as the General Manager. When I said, “Oh, you’re the GM and you’re also working the desk”, she said – “I’m working the desk, taking out the trash and cleaning rooms.” When asked how COVID has impacted her hotel, she said that they had 41 employees in March and are now operating with 8. This is an 80% reduction in staff, in just one hotel, which of course is being repeated across all country and across all industries. That this is occurring around the country, I don’t believe things will snap back, as many have hoped, by next year let alone Q4, 2020.
However, regardless of what happens over the coming months, we need to take this time to not only appreciate the recent increase in sales but to think through every aspect of our businesses. From staffing, to hours of operation, to marketing – in a rapidly-evolving COVID world. We also need to address inventory levels, cash reserves, health protocols, in-house events and virtual meetings. I can’t say how much inventory you should have, or how much cash reserves you should have or whether you should hire or fire – because every single one of you are in different circumstances. However, I’m pretty sure that doing more with less is going to be a theme for the foreseeable future. COVID19 is not going away anytime soon but for the sake of our businesses, our livelihoods, that of our team members and communities, our focus needs to be more long-term than 2020. What we do now when the going is good, will determine where we stand in COVID21.