Because of Covid-19 we are, according to the Financial Times, facing the worst recession for 300 years, or since the ‘Deep Frost of 1709’. How utterly depressing is that? ‘Winter is coming’ and we better be ready!
More optimistically, the Bank of England suggests that we should see a V-shaped recovery, owing to the unusual nature of this recession and huge shock caused by locking down the country, calculating that there is pent-up demand which once unleashed will spike productivity back to healthier levels. But no one really knows whether it will be V-Shaped, U-shaped, or worse W-shaped, or disastrously L-shaped. As we all know recessions are always primarily triggered by physical factors, but driven by psychological factors, or the herd mentality, ‘madness of men’, over-reaching reality.
The mainstream press has a big responsibility to communicate in a balanced and accurate way how our nation of shopkeepers is fairing. With so many livelihoods at stake, the press has a moral responsibility to maintain integrity rather than profiteer from politicising or catastrophising an already incredibly challenging time.
My feeling is from a retailing perspective, it’s less a disaster and more a shift, and as a community, we have to shift too. The quicker we adapt, the more V-shaped our economic performance will be. Who bought a bread-maker, a comfy office chair or a peloton over the last three months, and would you have if it wasn’t for Covid-19?
During the ‘dot com bust’ in 2001, eCommerce, which in many ways is the definition of going ‘dot.com’ continued unaffected to rapidly grow. And in a very different recession of 2008 (the credit-crunch), Alibaba laid the path for TMall (GMV $340B) by switching from a B2B model to B2C. We’re seeing the same at Pentagon, our marketplaces are enormously benefitting from the shift to digital and home shopping. eCommerce and marketplaces aren’t recession-proof, but they are a fantastic example of using enterprise, creativity and entrepreneurialism to solve the world’s most complex challenges.
There is a gross injustice in this terrible virus and from an economic perspective, it’s going to be really tough for some sectors. But with every challenge comes opportunity and although we might not be in control of exactly when we will recover, how we recover is down to retailers readying themselves today.
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