From the economies point of view Corona Virus is likely to affect the way we do business far more than people realise.
How the Corona Virus might Change the Economy
From the economies point of view Corona Virus is likely to affect the way we do business far more than people realise.
History shows that people are conservative and like to stay with the way things are until something comes along and jolts them into frantic activity of change or at lease propels some towards change when they might have preferred to just continue like always and keep things simple.
Throughout time when some particular innovation arrives often it seems to take ages until it catches on and becomes mainstream in society. People might appreciate the new idea as being better than the current way of working but for whatever reason, be that risk aversion, lack of skills, or just a lack of real motivation, the idea sits on the shelf for ages.
Back in 1975 students doing Physics year 12 studied a unit on the topic of light. That unit taught the students how this tiny piece of material could emit light if an electrical current were to be passed across it. Wow, that is something out of science fiction a student might have thought at the time. Nowadays we all know of LED lights.-or as they were called back 45 years ago, light emitting diodes.
Maybe, just maybe, the disruption caused by the way we must deal with Corona Virus will be the impetus for change and have one of two effects.
One group of businesses and individuals will adapt quickly and using existing technology change their business models and make a leap in productivity that they would not have contemplated if they just kept on as before.
Another group might find that they are suddenly in the difficult position of running out of options, of having held on to a declining sector, now find themselves with no way out and they are at the end of the road.
A quick brain storming session and I have come up with a very small list to think about
Travel Industry-travel agents
Real Estate Industry-real estate agents
Shopfront Retail-selling anything local that can be delivered cheaply
The travel industry has had its retail outlets under threat from online delivery that allowed customers to book direct their airline tickets, hotel accommodation, and car hire. Still, they survived as many people found the internet tricky or just liked the ease of someone else suggesting options for them in a busy world that is a use that many find appealing.
Now, people are being forced to not travel and when the restrictions lift perhaps people will be slow to get out on holidays again due to some having lost income and the risk of getting sick away from home.
Shop front Travel agencies therefore might suffer a decline in revenue which might lead to retail outlets closing down. With this, more people will be forced to access the information they need online and so the cycle turns. Google might even start suggesting where people should go because Google probably knows us better than we do ourselves nowadays.
Real estate Agents have traditionally worked out of Shop front premises in high foot traffic areas in Towns. This worked well when potential customers had to see the advert in the window and get driven out to view the property.
For several years now realestate.com.au has been an easily accessible source for potential property purchasers yet they still went through the estate agent in the big shop.
To date, some Agencies operate online only but they are very rare. There are enormous economies for real estate agencies to stop paying shop rent and move online.
An effect of social distancing in the workspace for real estate agencies might work out as follows.
-half the workers work from home and half in the shop.
-rather than showing clients around a house in person, the agency can do 3D online tours. Google earth shows what the backyard looks like and the neighbours too!
A real estate agent informed me recently that they had made their first sale where the purchaser had not stepped foot on the property.
The possible change for this industry is that retail space will not be required, space can be reduced with most agents and support staff working from home and just a few manning the shop front.several
Linked to the real estate industry are the conveyance and property transaction industry such as land titles offices, State revenue Office and Conveyancers.
This industry has over the last 5 years transferred nearly all its operations online.
Just about everything is conducted online for the process of buying or selling a house for example.
Speaking with Shannon Oatley, the Director of Property Conveyancy Group Shannon had the following to say on the industry.
“The Conveyancing Industry has been extremely fortunate in that we moved to digital settlements a couple of years ago which was the biggest change for the industry in decades. This move to Pexa certainly streamlined our process and meant that we could complete settlements no matter where in the world we were. Settlement Agents no longer had to gather in large groups (often hundreds of people in a room) in order for settlements to take place. If Pexa wasn’t introduced and we hadn’t had made the move to digital, it would certainly be a very different story.
Our main change has been that face to face meetings with clients have been stopped, although the majority have been most understanding. All client documents can be completed at home by the client with little issue so this has not caused too much of a headache.
In terms of the industry in itself – certainly for the first week or so when all the lockdown measures came into place, not many Contracts were being signed. I personally act for many first home buyers and they were incredibly concerned – and scared – about what the market would do, whether their jobs were safe etc. It took a few weeks for people to get used to the “new normal” at which stage buyers came out again in force and it’s been quite busy since then.”
Shopfront Retail. The internet has made gains in online selling for quite a few years now but with Corona Shutdown people have turned to buying things online. They do not have to risk catching something in a shop and have plenty of choices and maybe even cheaper priced items.
Of course, there are some really big shop ventures that do well online as well and they should continue to progress. The shops without the online presence may be struggling going forward now. People just might have found online purchasing is easier, cheaper, and gives them time for doing something else in their day.,,
Industry sectors will face significant change and there will be winners and losers as a result of this change. That goes for employment opportunities as well as business opportunities.
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