The Covid-19 pandemic changed the lives of us all. And the consequences of the Russian invasion of Ukraine, and the Hamas attack on Israel also continue to rumble around the world. Many individuals and businesses are adversely affected through no fault of their own. But there is always more going on than first meets the eye. There are always a myriad of macro and micro forces that change customer behaviour, markets, and point to new opportunities as well as threats.
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What are forces for change?
Sales of high heeled shoes fell dramatically during the pandemic (1) notwithstanding the staying at home, health and fashion memes that took hold. Car usage also declined without a need or opportunity to travel. And today, the sales mix of cars continues to change due to concerns about climate change, pollution and healthy living. In the UK, most notably, also due to legislation, extension of low emission areas and the associated cost drivers and barriers.
Some shifts were magnified by the C-19 pandemic. And the biggest shift of all … to a digitally dominated world …. was also facilitated by smarter phones with increasing and lower access cost.
The shift is most obvious in retail (2). Whilst many retailers bemoaned the health crisis and gobbled up the Government grants, this merely diverted attention from their inability to anticipate and position themselves to compete in a digital world.
Identify or face the consequences of shifting markets
Consequences flow from the inflexibility of Marks and Spencer, to the ubiquity of Tesco, to the profit squeezing of fund-owned brands such as Boots and Debenhams. Also the fall from grace of wheeler dealers who grew fat on the glories of pre-existing brands. All were further compromised by greedy local government making it more difficult and costly to visit any high street.
To survive and thrive at all times, there is a need to remain vigilant to both macro and micro forces affecting your business. Then, and only when, you understand the forces, can you figure what these mean for your future. This is key to devising effective business and marketing strategies.
Every force has an opposite though not always equal reaction. For example, for many the balance of office and home working changed. This continues today suggesting it is a long-term behavioural shift. Underpinned by an individual’s ability to save travel costs. And also to boost business productivity. There is evidence of increased staff productivity, as well as well-being and health. Businesses participating in 4-day working week trials consur! (4) So on one hand, expect a further shift to 4-day from 5-day working weeks and all that that brings. And on the other, expect more incentives to entice staff into offices.
While 77% of UK CEOS have increased their investment in digital transformation (3), we suggest you work out the best balance and inter-relationship between on-line and offline. Certainly there are pitfalls in managing marketing in a digital world as we’ve warned for years. However, they are only coming to the fore as evidenced by recently announced layoffs by the likes of Meta. Though those of you with longer memories will remember the Internet boom and then bust of nineties. So tread carefully and measure and manage promotional effectiveness across all media.
A counter force, as confirmed by our recent Buckinghamshire High Street survey, is that High Street businesses must pay more attention to the customer experience to win custom back from online. Some places, of course, already do this, and the likes of John Lewis, and many garden centres, for example, have long realised the value of combined shopping and eating/ drinking experiences.
Governments and councils speed or impede change too. By enabling a fairer or laissez-faire playing field between the High Street and online pure plays. For example, by easing High Street access, parking, reforming property charges, and taxes, shifts demand and supply-side economics. All is fair-game for the lobbyist.
(1) Glossy.co (2020)
(2) A record 35% of sales were online (January 2021 – ONS)
(3) CEO survey (PricewaterhouseCoopers March 2021)
(4) 4-day working week trials (Feb 2023)
(5) Seven perks to entice staff into offices, BBC (March 2023)