Today we’re living in what might optimistically be called a state of flux. We’re not exactly fluid, but we’re learning that fluidity -the ability to move around obstacles (think water) rather than overcoming them (think bulldozer) will determine which businesses will survive, thrive or fail.
There’s a new “normal” today, and no guarantee tomorrow won’t bring more change.
Doesn’t matter whether we are ready to embrace the change, reject the idea, or choose to ignore the whole thing.
The only constant we can count on going forward is constant change.
Business has been forced to change due to the global lockdown. COVID-19 didn’t just change consumer habits. It exposed weaknesses and vulnerabilities in everything from the global supply chain to internal corporate operations.
Long-established business assumptions changed with the pandemic. It’s likely they’ll ever return.
Companies learned they really didn’t need employees in costly office space to be productive. As workers went remote, however, managers struggled with not being able to monitor their activity. Companies that could learned a lot of what they once called “productivity” wasn’t.
They had mistakenly equated “busy” with “productive”.
The question going forward is whether companies with large remote workforces will either raise expectations for remote workers’ production or lower compensation.
After all, some will argue, since the worker is spending less, in time and money, working remotely, shouldn’t compensation be trimmed or expectations for results raised?
Will remote workers counter that they’ve actually lowered operating costs for the company by allowing the company into their homes?
That’s only one example of the uncertainty an developing hybrid business model raises.
Manufacturing, farming, and other businesses are staring down the gun barrel of an administration that has made a $15 minimum wage one of its stated goals.
Despite predictions that as many as 1.5 million minimum wage workers would lose jobs due to the increase, the administration continues to stick assert that it would raise almost the same number of people out of poverty.
That position, however, ignores the fact that workers earning $15/hour or more today will undoubtedly demand commensurate wage hikes.
No matter how well-intended the reasoning, most businesses simply can’t absorb that level of increased labor costs. Ultimately, the people who are supposed to benefit most from the increase, those working for minimum wage, will wind up paying the cost. Either in a loss of jobs or increased costs for goods and services.
The pandemic disruption also exposed vulnerabilities in the global supply chain.
Today, companies are still suffering supply issues due to their inability to move raw and/or finished goods, either to manufacturing locations or the marketplace.
The massive influx of online holiday shoppers has demonstrated the logistical problem.
During the final run up to Christmas, both FedEx and UPS were forced to modify their overnight and rush policies due to massive volumes of packages.
Other shippers found themselves challenged by the pandemic’s variety of travel and quarantine restrictions.
The retail issues are equally fluid.
According to a new McKinsey global study, the pandemic accelerated the Business to Consumer (B2C) marketplace. Online business (direct selling) pre-pandemic, was showing steady two percent growth.
In 2020, it increased sixteen percent over six months. A massive shift for retailers.
Athleisure manufacturers like Lululemon, adidas, Columbia, and Sketchers say more than 50 percent of their total sales the past six months were via digital.
Research says 43 percent of consumers who had never shopped did during the pandemic. According to the McKinsey study, 28 percent of them say they will “reduce their use of physical channels going forward.”
Of course, the trend toward digital is strongest with the youngest. It’s also where the outdoor industry must recruit new participants. Like migrant hunters, the industry must go where there are customers.
Eighty-four percent of younger shoppers who had not purchased goods online prior to the pandemic shopped online. Even the aging Baby Boomer demographic saw nineteen percent of shoppers moved online for at least a portion of their purchasing.
The net migration away from physical channels is projected to be 25 percent for 2021. That’s a huge shift in buying habits. Unfortunately, it means many brick-and-mortar retailers simply won’t survive. That will also have an impact on unemployment and the retail realty markets. As those areas get more pressure, workers will continue the trend away from big cities and what will be an inevitable increase in their already heady cost of living.
The migration of business and consumer presents a whole new challenge for marketing departments.
Where are marketing dollars best spent?
The Archery Trade Association, for example, suggests budgeting for “diverse methods of reaching customers.” That diversity includes budget allocations for content creation (for customer engagement on websites, blogs, etc), email marketing, social media, radio, print, direct mail, loyalty rewards programs, and “additionals” including billboards, partnerships, donations, and press releases to media outlets” as a few potential places and ways to advertise your goods and services.
If there’s an upside for the outdoors, it’s that for the most part our activities aren’t dependent on events. While boating, cycling, camping and other outdoor activities can be social activities, they can also be enjoyed individually or in small, isolated groups. That’s one of the primary drivers for the increase in outdoor participation. It’s not only affordable recreation, it’s responsible.
And at the same time, the online that address the outdoors is also booming.
In the most recent edition of our Archery Wire, editor Michelle Scheuermann shared a conversation with Brad Lutrell, co-founder and CEO of the app GoWild.
In that conversation, Lutrell revealed that GoWild grew by seventy-five percent over a single week in January. The growth of “alternative” sites and apps for the outdoors and shooting sports following the “socially responsible” actions of Twitter and FaceBook that censored many activities further demonstrates the new world in which we find ourselves. In the face of unjustified censorship, we’re finding new ways to connect. Tapping into those connections is one of many challenges ahead for the outdoor industry.
Hopefully, one old business axiom will survive: with challenge comes opportunity.
We’re evolving how we distribute our services in as we prepare for what seem to be inevitable challenges to the free-flow of information.
All part of our promise: We’ll keep you posted.
— Jim Shepherd