Through our Tuesday TouchPoints series, we are sharing a diverse set of content we hope will be helpful to those managing through volatility, working from home, or just connecting.
By HPA Founder & Managing Director Sumeet Goel
The movie came to mind on the heels of a NYT article I read recently, which noted that the record time for a U.S. coast-to-coast drive had been shattered during the COVID-19 crisis. While Google Maps estimates a time of 41 hours to complete it with normal traffic patterns, the team crushed it in 26 hours and 38 minutes – impressive, but of course “enabled” by the lack of traffic, quarantines and questionable behavior.
Albeit a controversial example, the idea of folks aggressively attacking the “opportunity” in the “market” is something that has struck me continuously these past few weeks. In conversations and observations on both a client and personal level, the same patterns and thought processes crop up over and over again.
The takeaway has been to Get Moving! It’s not about coming up with the best and most perfected business plan right now. The disruptions and dynamics that you may have thought would impact your industry in 5-10 years, or that you could dip a toe into the water with, or could keep an eye on and then decide on in a few years… well they’re here NOW. And they’re not going away.
Here’s a sampling from conversations our team has had in just the past 2 weeks:
- Consumer Goods: Chief Commercial Officer at a F500 CPG Company – retail channels have been consolidating for a while now, but overnight, are left with the decision to go much more heavily direct when they’re in no position to do so. BOPUS (Buy Online Pick Up at Store) may have started 15 years ago, but it has been slow to gain traction. Now? They have no choice, lest they be held captive to an outlet (Amazon or otherwise).
- Grocery: Head of Supply Chain for a F100 big box: The overnight surge in online, especially for grocery, is unprecedented. Per Fabric, the online share of grocery shopping was at 5% pre-COVID-19 and may reach 10% by end of year, 4 years ahead of previous estimates. The numbers are staggering, and there’s a belief that once you go there, you may never turn back. Retailer systems aren’t ready for this, and it’s not just about toilet paper.
- Banking: SVP of Marketing for a F100 bank: The industry has pushed digital banking for years, with mixed results. Immediately, with branches closed and worries about using ATMs, the digital banking shift is upon us and here to stay. Our banking executive says they love it long term because of the reduced costs of service, but the overnight shift is “almost too fast.”
- Online services: CEO of a leading online social networking company: You would think that an online services company would be ahead of things, but *everyone* was caught by surprise – this has spared no one. This company disintermediated paper & pencil almost two decades ago, but innovation since then has been minimal. In a span of two weeks, everything has moved virtual – Zoom, Google Meets, Jackbox/Social Party, you name it. And now they have to figure out how to pivot in real time.
- Education: Former Senior Official in the Department of Education: Distance learning is where we’re headed – that’s been the refrain for years, but not reality. Now, you will see two things: (1) Every higher education institution scrambling to be ready for the Fall with a solution, with the traditional online-only ones really showing their superiority, and (2) Those same first movers will have to move the bar even higher and even more quickly than they had planned for – everyone is going to be crowding their space – again, overnight. The impacts – on the traditional campus model, the economics, the expectations from students/families, and then the requirements at high school and lower levels – will be swift.
- Personal Care: Chief Commercial Officer of a well-known beauty brand shared the obvious- sales are radically down especially vis-à-vis other CPG – e.g., folks aren’t going out and using makeup, but still needing toothpaste. But the not-so-obvious: the accelerated disruption on what we’ve done for decades – the traditional in-store makeup trial / application process doesn’t work and folks will not want to go back to applying a public blush pad, etc. They have to immediately rethink the entire model – digital mirrors, digital applications, etc., as well as a TBD new physical model. She who moves first here will be strategically advantaged.
And then on a more personal level, I can’t help but wonder as I see these shifts happening around me:
- Healthcare: My 74-year-old mother is now enamored with the televisits from her doctor. I can’t overstate how huge this is. If *she* can change from having to go physically see her doctor (hands-on patients) and is comfortable with a video chat… wow. Telehealth just step-changed every primary care office in the country – again, overnight.
- Real estate: Another area where online/virtual services have been around for a while, looking to disintermediate the traditional 3% commissions each on the buy & sell side that have never budged. Last year CNN noted that while 50% of buyers found their home online, only 13% transacted online. HPA has several friends & family in the industry who have now been doing FaceTime walkthroughs, Zoom negotiations and DocuSign closings. That will pressure the 3%/3% and create a new way of doing things – it already has.
- Restaurants: HPA Advisor Meredith Sandland wrote more on this, and I’m sure you’re seeing this every day yourself. There is a big push to buy local to support your local establishments. And that’s great, but I wonder what happens after that – there will be a shift towards more eating in, and more importantly to online delivery that was already underway. I personally know of two local places that prided themselves on not working with delivery services and focusing on in-house patrons. They are closed, and unlikely to come back.
“Literally overnight” is the common phrase I heard in these conversations. Unprompted. And that tells you all you need to know.
Think about where you are/were, and the changes you expected would happen over the next 5-10 years…and then realize that these changes will be happening in the next 12-18 months, and you need to get ahead of them, even if you don’t think you can right now.
Getting ahead could mean investing selectively, or going aggressively after those smaller disruptors that you’ve been monitoring that could accelerate your change – the change that is now, without-a-doubt, no regrets necessary.
Whether it’s Rahm Emanuel pushing us to not let a crisis go to waste in 2008, or Dr. Ian Malcolm teaching us about life in 1993, the message is clear – no matter how scary it may be, Move Now (even as you #WFH), lest you get lapped or left behind.