Looking at what’s changed in 2020 because of Covid – and what changes might be permanent – let’s start with the biggest driver of economic activity: consumers. A majority of the more than 2,000 people surveyed by Jones Lang LaSalle said they want to continue working away from the office at least two days a week; only 26% want to do it full-time after the pandemic passes. Weekday consumer buying behavior will be altered for the long term. Further, the pandemic has forced online purchasing into everyday life.
Again, consumer buying behavior will be altered long term. On the retail side, where should you put a physical location, and how should you configure it when you don’t know how consumer patterns will play out yet? Will they return to pre-crisis behaviors? Perhaps partially, but it’s very unlikely the post-crisis economy will look the same.
By extension, what this tells me is that competition won’t look the same a year from now. When we see disruption as we did in the Great Recession, new brands entered the market with different offerings. They went after your customers, more often seeking new consumer demand. New models emerged, such as the co-working style business model in hair care, where franchisees rent chairs to independent contractor stylists; and a flood of new fitness brands that more narrowly targeted consumers than the big box gyms.
Our own research for clients clearly shows this crisis will have even more dramatic changes to what you consider competition today. New entrants will come to market with offerings adjusted for a post-pandemic economy, often with a much bigger technology integration. Some franchise brands that were your previous competition will be internally focused for the next few years as they stabilize their systems and modify their offerings. All of this will take a few years to fully understand. It’s not your typical recovery where returning to pre-crisis mode was expected.
All of this leads me to a single conclusion. This time around in the economic boom/bust cycle, going a bit more thoughtfully, doing more research on consumer behavior changes, more diligence on how a brand’s offering is being adjusted and supported, and a more thorough assessment of how stable the franchise management team is will guide consumer marketing and growth plans to a better outcome.