Coronavirus (COVID-19)

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Exploring the Long-Term Effects of Coronavirus on Businesses

Read our thoughts on how the coronavirus could change the way businesses operate, and how consumers spend, in the long-term.
Exploring the Long-Term Effects of Coronavirus on Businesses

We've all had to adapt to a new way of living and, for many of us, working during lockdown - and the way in which we communicate with our friends and family - has changed.

‘Getting back to normal’ was a hot topic of conversation over the first few weeks of the coronavirus outbreak, but more recently it’s become unclear whether getting back to exactly how things were before the outbreak, is actually at the top of everyone’s agenda. As we, as a society, begin to look at the potential benefits of lockdown lifestyles, we’d like to reflect on what the long-term effects of the coronavirus could be- and explore how they might affect businesses and business owners going forward.

Has coronavirus changed the way we value public services? Do we want to buy the same products as we did before? While we can’t say for sure what the fallout of the coronavirus will be, stick with us while we talk through some possible theories on how business practices in the UK could be permanently changed by the virus.

1. Consumers may want different products

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Being locked down may have forced people in the UK to reconsider their spending habits. With many people losing out on household income due to becoming either furloughed or unemployed, it’s possible people could be hesitant to make non-essential purchases in general.

So, what are people’s main concerns?

Statista research coronavirus impact Statista research shows how coronavirus has impacted lifestyles in the UK

Statista’s research indicates that personal finance is a big concern for people in the UK. If the public feel now that money is tight, and that the economy is unstable- there’s a good chance that this sentiment could remain even when the lockdown has ended.

By piecing together people’s worries and changed lifestyles, we can gain an understanding of how their buying behaviours are being impacted short-term, and speculate on how this may develop in the future. So, with people spending more time at home and wanting to save money- we can see that they may be spending more time cooking.

Home cooking google searches March 2020 Google Trends search data shows how searches for ‘home cooking’ have increased in March 2020

Using Google Trends, we can see that ‘home cooking’ is growing in popularity, which could suggest that people are adapting their lockdown lifestyles by learning new cooking skills and recipes.

In terms of the long-term impact of this behaviour, we imagine that as people learn more about cooking and become more experienced, they could look to use these skills more going forward. As such, new opportunities may arise for recipe books, home cooking guides and culinary equipment.

It’s worth considering whether you could apply this methodology of looking at current affairs, trends and some data for the industry you work in to determine whether it could be similarly affected by lockdown lifestyles.

2. Working from home and flexi-time could be the new norm.

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People have gotten used to working from home in recent weeks. For many, it’s actually been a surprisingly easy transition- although we recognise that this isn’t true for everyone.

People may be becoming more aware of the potential benefits of working from home, which may include the following:

  • Reduced commuting time
  • A more flexible schedule
  • Working in comfortable clothing

From becoming accustomed to this way of working now, and seeing that they can still operate effectively, business owners in the future may be more comfortable with implementing a working-from-home policy in their business. Or, they may feel more inclined to offer flexible working options to their employees, as both of these options could make their employees feel more comfortable and supported.

3. People are changing how they shop

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E-commerce is growing. With a number of businesses in the UK being prevented from operating at normal capacity due to lockdown rules, the reality for many businesses has been that they’ve been forced to adapt or change their business models to sell their products or services online.

This shift is not only true for businesses, but for consumers, too. For those who aren’t particularly tech-savvy, there’s a good chance new skills have had to be learned to enable people to shop online. This could include building a basic level of a level of familiarity with e-commerce platforms- which could even mean just knowing how to navigate around the most basic of online shops.

With the UK’s lockdown potentially lasting for a while, we suspect that the online purchasing habits people develop while they’re at home may last in to the future- even when restrictions are lifted. They could cause a higher percentage of UK sales next year to be made online. This could, therefore, pose a challenge for businesses who don’t currently sell online- who may benefit from pivoting to make online sales a part of their business model.

4. Passion for the environment

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There’s a huge amount of content circulating online that shows some of the environmental impacts of the coronavirus lockdown. From the skies above Beijing in China clearing up substantially, to the rivers in Italy becoming transparent and filled with animal life- there is no doubt that lockdown lifestyles have had a positive effect on the environment.

Clearly, this positive effect has been noticed. A renewed passion for the environment amongst the general public may cause businesses to think twice about their environmental impact going forward.

For business owners, it may be worth considering how strongly your customers feel about environmental causes, and putting in place the right policies to ensure that you’re being as eco-friendly as possible. If you’re interested in this idea, check out our research on consumers and the environment.

5. People may initially be hesitant to spend money

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The coronavirus lockdown hit many of us fairly hard, and quickly. Many businesses may not have had time to prepare for a lockdown, and could have suffered as a consequence of this. So, it’s likely that many business owners are still feeling a little uneasy and it may take a while for small businesses to fully recover from this shock.

Savanta’s daily tracker receives responses from over 1,000 UK respondents per day, and their data reveals that 17% of people are the most worried they have ever been, with a further 31% saying they are greatly worried. That said, it looks like these levels are slowly decreasing, which is a positive sign.

So, people are worried. But the general worry of the public is a little different to the concerns business owners may have. While we can’t know for sure what these concerns are on a large scale, from their research, McKinsey have identified some key steps companies may need to take to overcome the effects of the pandemic.

McKinsey’s five horizons coronavirus McKinsey’s Coronavirus research reveals the five horizons companies need to think and act across

We hope that businesses will quickly build back the confidence they need to get back on track once the coronavirus has lockdown ended. If you’re feeling a little concerned yourself, we’ve compiled our own list of tips that could help offer some support.

Will my business feel a long-term impact from coronavirus?

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No one knows this for certain. Although, there are a number of factors that could influence which businesses are likely to be impacted and how exactly this could happen.

As a starting point, it may be worth considering whether your business or industry could be affected by any of the points we’ve speculated on in this article, and it may also be worth updating your business continuity plan to prepare your business for any potential market changes or unexpected turns you could face in the future.

Our best wishes are with all UK businesses who are trying their best to succeed despite these difficult conditions. Stay safe, and look after yourselves.

Please note, the nature of this article is speculative. We cannot guarantee that the scenarios, opinions and experiences described within will be true for everyone.

How could Esme Loans help?

These are difficult times for many businesses, so it’s important now more than ever, to take good care of yourself and your team. If you’re concerned about your business being impacted financially due to coronavirus and want to understand the support available to you, please visit our advice page for information.