Conversations begin very differently nowadays. Previously, you would perhaps start with, ‘Hello’ or, ‘Please come in and take a seat’. Now, most meetings begin with ‘I can hear you. Can you hear me?’ or, ’You’re on mute. You need to unmute!’. Once we have established communications, the conversation quickly moves on to questions about staying safe, how our respective businesses have been affected by the pandemic and reassurances that our families are keeping safe and well. There is no doubt that the world has changed due to COVID-19, and it is very unlikely to return to how things were before. I won’t be travelling to London for meetings two or three times a week anymore, instead, I’ll meet more frequently through video conferencing – something I had practically never used before this pandemic. My staff and I are more likely to work from home from now on. And I wonder what will happen to the traditions of shaking hands and hugging when we meet familiar faces?
The future of the economy
The latest economic figures from the Office of National Statistics make for some grim reading. Gross Domestic Product fell by 20.4% in April and service output in that same month dropped by 19%. These are the largest drops since the Office for National Statistics started recording the figures in 1997. When trying to research and understand what the future of the economy could look like, you would be hard pushed to find any economists that agree. Some are predicting a speedy recovery, whilst others predict years of depression. I don’t believe the future can be predicted using traditional models, and that is why we have such varied predictions. The world has changed; the way we live our lives and the way we spend our income, and it isn’t going to go back to how it was before. So, how have I come to that conclusion? By looking at how the lifeblood of our economy is behaving – the job creators, business founders and entrepreneurs.
Evolution of consumerism
Over recent years, the way we live has been evolving. More and more of us were shopping online before the pandemic and eating in is gradually overtaking eating out. There’s a shift towards home-based consumerism. Inevitably, this led to a growth in online retailers and the decline of the high street. There is a trend among the younger generation to stream arts and entertainment online or through social media, in contrast to older generations, like mine, who prefer going out to restaurants or the theatre. The world was changing; but COVID-19 has condensed decades of evolution into a few months. Now the older, traditional, generation has been forced to adopt the new ways.
A seismic shift
There is no better way to understand this seismic shift in behaviour than to look at how entrepreneurs are responding to the demand. They are the opportunity seekers who are looking to satisfy the market. The market for eating in has slowly been growing over the past couple of years but, when we look at the past few weeks, we start to see a large rise in businesses starting up in that sector. The volume of new businesses in mobile and delivery food companies overtakes that of all previous years and continues to climb along a very steep trajectory. Is this unique or to be expected? We generally see a small growth in start-up businesses during the time of recovery from a recession, so we need to look at the country as a whole, across all industry sectors, to ascertain whether we have reached the point of recovery. If the often referred to V dip in business start-ups coincides with the economic recession, that economists are predicting for a quick recovery, that recovery has already begun. What I find interesting when looking at this data, is that neither the credit crunch a decade ago, nor the recession of the early 1990s, had the quick growth in business start-ups that we are seeing here.
Unprecedented and historic growth
This is all great, but what does this have to do with the change in human behaviour and how do we really know people’s shopping habits and the way they consume food, arts and entertainment have changed? We need to focus on businesses starting up in the online commerce and retail sectors, and this is where we see growth of a sector that has never been seen before in recorded history. A sector growth of this magnitude is not a blip or a fad. We are witnessing a seismic shift in consumer behaviour that is most certainly here to stay.
Business Data Group generates leads to service companies that target the small business sector. For more industry insights and to find out how Business Data Group can help your business grow, contact Richard.osborne@bdgroup.co.uk or telephone 01604 419609
