Beyond the obvious: What does 2021 hold?
It would have been a brave individual who wrote predictions at the beginning of January 2020 of a global economy shut down, offices closed, employees working from home and a largely obedient population putting their lives on hold. This would previously have seemed unfathomable.
As January 2021 rolled around, however, it was a continued reality. If 2020 taught us anything, it is that making predictions is, at best, interesting and informative but is increasingly difficult in times of rapid change.
As the UK exited the EU with a trade deal, it also entered a third lockdown. Overseas, the US remained deeply divided and in a state of political unrest just days before the transition of power. Whilst in China, the economic forecast continued to look positive.
It seems the new year is not so much a fresh start but a continuation of the unpredictability, turmoil and difficulties we faced economically, politically and socially throughout 2020. What we ought to have learned over the past year, is that if we prepare for anything, it is for shocks and surprises on a global scale.
So, what can we expect in 2021?
Beyond the obvious and already over-stated predictions for a continued boom in online retail, video conferencing technology and growth for delivery and logistic companies, there will be other winners and losers. The rise in crypto-currencies, block-chain technology, medical technology, renewable energy and alternative therapies are just some growth areas. We don’t need a crystal ball to predict that the hospitality sector, travel and airline industries will continue to be adversely affected, certainly for the first quarter.
Ironically, the latest restrictions and a prolonged third lockdown may have the unexpected benefit of a faster economic recovery. At the start of the pandemic, consumer behaviour shifted significantly - not just in terms of habits and the move to online purchases but also in attitudes. It was an opportunity for us to re-evaluate what was important. To a large extent this has happened in a radical way. Workers are honest about not wanting to go back to the office, commuting and the daily grind of long hours at their desks. Most people have got a handle on a better work/life balance – enjoying more leisure time at home and with family.
Life may not resume as it was but, paradoxically the longer we are under restrictions, the less likely we are to stick to changes made during lockdowns. Memories of “good times” will begin to feel so long ago that we will collectively seek out a return to old behaviour and revert to old patterns.
The 1918 flu pandemic was followed by the “Roaring Twenties”, a time of exuberance and excess. It is likely that after a year of isolation we will forget about what we learned during periods of introspection and our resolutions to reform the way we live. Whilst difficulties force us to look internally and question what our true desires are, these are easily forgotten in the face of freedom.
What are the likely effects on consumer behaviour?
The pandemic has been divisive in so many ways. Whilst many have lost their jobs or been furloughed there have been immense new opportunities and lots of stock market volatility for those looking to invest in boom companies like Tesla. There is certainly no shortage of money to spend.
A large section of the working population are saving as their spending on holidays, entertainment and luxury goods has all but ceased. This will result in a large amount of disposable income being accrued which will likely be used to spend our way out of the gloom of a January lockdown. It is likely that the hospitality sector will be the main beneficiary of this ‘spending spree.’ We can, however, anticipate several years of restructuring and recalibrating economically and socially as we recover from the impact of the pandemic. It would therefore be prudent to invest and spend wisely. For luxury goods retailers their key to success will be in luring consumers with long-term, investment purchases.
It’s both necessary and good to make long term forecasts and plans but success will come to those that have their sights on the horizon but actions firmly fixed in the present. Adaptability will remain our key driver both at a business and personal level as we set new goals and create a new vision.
Social unrest is growing and we can anticipate that there will be much more both at a local and global level. When we start to reflect on 2021, hindsight will tell us that change came both quickly and unexpectedly.
Our aim for 2021 should be to expect the unexpected.