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4 Ways COVID-19 Will Continue to Impact Businesses in 2021 and Beyond

StrategyDriven Editorial Perspective Article | 4 Ways COVID-19 Will Continue to Impact Businesses in 2021 and BeyondNobody likely knew what to expect when news of the newest coronavirus began popping up in December 2019. For many people, the reality probably didn’t sink in. After all, Europe and the United States remained mostly unaffected by most recent pandemic concerns. By January 20, 2020, though, the U.S. Centers for Disease Control and Prevention were singing a different tune. Nearly one year later, the pandemic shows no signs of ending, and business owners and consumers alike are wondering what to expect in 2021 and beyond.

1. Financial Technology Will Be in Higher Demand

As more businesses move to virtual formats, the need for financial technology will continue to increase in 2021. The problem is that despite popular belief, many financial institutions have barely experimented in fintech and aren’t ready to take on digital financial formats on a larger and more permanent basis. However, according to an article by Donald Gayhardt, this is likely to change quickly.

Gayhardt states that Hong Kong is already increasing its use of advanced fraud detection, biometric facial recognition, and other innovative AI technologies due to the pandemic. Financial technology won’t just take hold in banks and credit unions, either. It’s becoming increasingly important for grocery stores, restaurants, and even cosmetics retailers who now offer no-contact pick-up and delivery services. When retailers do not see customers face-to-face, it becomes more important than ever to offer a variety of safe and secure virtual payment methods.

2. Survival Entrepreneurship Will Become More Prominent

Businesses that are already centered on technology have remained mostly stable during 2020, but small family businesses haven’t been so lucky. Although unemployment in the United States decreased one percentage point to 6.9% in October 2020, the rate is still nearly double what it was before COVID-19 entering the U.S. Unemployment is even higher among minorities, as well as among Millennials and Gen Z, meaning an increasing number of people are turning to starting their own businesses.

People who once worked in pet stores and veterinarians’ offices are walking dogs and feeding cats while people are out of town. Preschool teachers and teachers’ assistants have turned to online tutoring. People are turning the jobs they used to do for someone else into businesses they work for themselves. History has proven that people who venture into the business world during tougher economic times often have more willpower to stick to it and decide they’d rather not re-enter the traditional workforce. This means you can expect to see more people creating startups in 2021 and beyond.

3. Logistics Will Continue To Move Slower Than Before

All types of industries are experiencing delays in manufacturing, distribution, and shipping due to the need for social distancing. Fewer people building products, packaging them, transporting them, or selling them means fewer products on the shelf. In the entertainment industry, for example, TV production has slowed, movie release dates are being pushed back, and major video game launches have been delayed as well.

It isn’t just entertainment, either. Clothing retailers, restaurants and grocery stores, and even some pharmaceutical products have all seen delays in 2020 as well. Some people must rely on companies that move products nationally and internationally. However, restaurants and some other small businesses have found they’d rather start relying on local supply chains than on global ones. More people are contracting with nearby farmers, fiber artists, and more, creating a better local economy and strong community along the way, something that will decidedly keep occurring in 2021.

4. Social Distancing Will Continue

Whether your company works with other businesses or caters to the public, expect to continue to follow social distancing regulations as the clocks move forward to 2021. If your company relies on business meetings and brainstorming sessions, expect to continue to host them via Zoom or another online video platform. Those who own restaurants will need to continue to follow social distancing guidelines both inside and outdoors and may need to follow curfews or earlier “last call” laws if they serve alcohol. Retailers will still need to limit how many people are in a store at a time, maintain social distancing in checkout lines, and enforce mask regulations as well. Vaccination trials are happening rapidly. When one becomes available to the public, social distancing will likely start to relax. Until then, though, expect to remain six feet apart.

Just a few months ago, nobody was sure when scientists would find a vaccine. Now, experts believe one will be widely available by mid-2021. The pandemic may be raging on, but it won’t do so forever. Until then, consider what you can do to help your community fight off COVID-19. If you can afford to, cut your business hours, switch to pick-up and delivery only, or close your doors altogether. If you run an essential business or must keep operating as normal for some reason, practice good social distancing skills. Train your employees well, check in with them often, and remember, everybody is fighting this battle. The kinder you are now, the better you will feel, and the better your company will be remembered when the pandemic does end.

3 Consumer Trends on the Rise in 2020

StrategyDrivenConsumers can be picky, but there are some trends from years past that are still on the rise in 2020. While there are plenty to choose from, the three on this list are seeing big profits that don’t look like they’ll be on the decline anytime soon. So check out these three products that are likely to be everywhere this year.

CBD Products

The cannabis market has become a big industry. Now that CBD has been reclassified as a Schedule 5 drug, it’s legal to sell it to consumers and can most commonly be found in a health food or e-cigarette store. This development came after CBD as revealed to have properties that stopped seizures associated with Epilepsy. Now, it’s used to treat many different things, from muscle aches to anxiety. Due to its versatility, CBD is estimated to bring in $20 billion in profits by 2024.

Plant-Based Meat Alternatives 

Meatless protein options are gaining in popularity, and not just with people who identify as vegetarian. In fact, only 7% of people who consume meat alternatives say they’re vegetarians. The biggest shift in the alternative protein market was the switch from a need-based market to a want-based market. More people want protein options so they can cut back on eating meat, even just a few days per week. This shift may have come as a result of a more eco-minded consumer trend that’s predicted to increase in the coming decade.

Wireless Speakers

Portable speakers have been popular since they came on the scene in the 1980s, so it’s no surprise that Bluetooth and other wireless speaker types are on the rise. This industry is estimated to generate close to $32 billion by 2023. The success of Bluetooth speakers can also be attributed to their affordability. These powerful little devices start around $10 each, making them a great purchase for holiday gift exchanges at the office or tokens of appreciation. On the other hand, audiophiles can purchase high-quality portable speakers, too, offering a broad market for the product.

Predicting Consumer Trends

There is no such thing as a sure thing, but if you watch the trends, you can try to foresee how consumers will behave in the coming year. Doing so helps companies and individuals decide where to place their investments. Of course, there are a lot of consumer trends out there, so do your research on a product before making a purchase.

How 25 Years of the Internet Has Changed the World of Business

StrategyDriven Editorial Perspective Article | How 25 Years of the Internet Has Changed the World of BusinessMany things have changed in the world of business over the past 25 years; in fact, some would say that almost everything to do with business and the associated transactions has changed or been altered in a significant way with the advent of the internet, online purchasing, smartphones, and Wi-Fi. While it may be true that how business is conducted has been altered significantly, it is also true that who consumers are doing business with is sometimes a complete mystery, even to the consumer. Yes, the world of business has changed a great deal in the past 25 years and here are just some of the many ways you may have noticed it altering the way you do business.

Online Information

It may be difficult to comprehend, but there are 55 to 60 billion pages of web information that has been created by people using the internet, and that figure grows exponentially each year. In addition to that number of web search engine indexed pages of data, there are an estimated hundreds of billions of pages of information that are not indexed – including almost 700 million tweet posts each day. Add to that all the emails, government records, and constantly changing pages of products for sale, and you can see how massive the world of online information has become. As little as 25 years ago, that much information available to anyone that wanted to spend time locating it was unthinkable.

Internet Searches

Once upon a time, it was thought the internet held databases, and everything was a product of those databases. While that may have been true during the early years of the internet, it is not true today. Everything is a result of a search task in the modern world. What clothes to buy, what books to read, what restaurant to visit are all the result of a search. Additionally, you no longer need to wonder about something for longer than a few seconds because you can initiate a search and the answer is instantly at your fingertips. The consumer is such a curious group that they ask the internet to answer over three trillion questions for them every year on the search engines. There is no estimation of how many additional queries are made on travel sites for where to go on vacation, shopping databases to compare different items or other areas such as the United CPA Association for information on help in a business matter, but it must be upward of six to nine trillion or more. That means the average person makes around 1,500 search queries a year, or an average of 42 a day.

Social Networks

Social media site owners report that one account alone has more than 25 percent of the world population (1.1 billion people) checking into that single site alone each day. That means that billions of people talk about different products, shops, books, and businesses every day on their favorite social media sites, and some spend hours pasting on walls, sending tweets, and posting stories about their lives. During all that interaction with their keyboards, those consumers also spend time sharing information and pictures about products they love and products that have failed them. For some businesses, the word of mouth meant instant success, but for others, it meant the death of a dream.

Product Placement

Twenty years ago, if you had a new product for sale, you could request a product placement on a shelf or endcap that would entice the consumer to purchase your items. It was the biggest and best way to get the consumer to purchase your product once they were in store. In the past five years, however, it is estimated that millions of consumers no longer step into stores to purchase products, rather they look online for goods, place an order, and have it delivered to their car outside the store or delivered right to their home. This type of consumer purchasing power has done away with product placement, and for many retailers, it has come as quite a quandary as to how to counter the power the consumer has taken away from the advertising agency and distributor.

Commercial Overload

Long ago, there was a time that four or five commercials played in certain time slots between sections of television shows. When consumers complained and used the four or five minutes as a time to get food or take the dog outside, the time slot became known as commercial overload. Today, the consumer is constantly being bombarded by advertisements to sell him or her something using the cookies his or her computer stores; and just like before, consumers are ignoring the ads in record numbers. Not only has it become more difficult to catch the consumer’s attention, but researchers have noticed that ignoring the ad placement begins at a very early age now as children begin using the internet and learn to focus on what they choose, rather than having their attention reverted away by something colorful and flashy. That means the world of advertising is going to have to learn to capture the consumer’s attention in new ways, and it will be interesting to see what advertisers come up with.

The world of business has been forever changed by the internet over the past 25 years. Some say it has been good for the business world, and others claim it has been massively destructive. Only time will tell what the real story is.

Want to Start Making an Attitude Change? Take Attitude Actions.

I define attitude as, “The way you dedicate yourself to the way you think.” Think negative or think positive is a choice and a process. Negative is (unfortunately) an instinctive process. Positive is a learned self-discipline that must be studied and practiced every day.

To achieve a POSITIVE attitude, or as I have named it, a “YES! Attitude,” you must take physical, verbal, and mental ACTIONS. Here are a few short chunks of attitude “awareness and actions” that will help put you (or keep you) on the positive path.

1. Admit that attitude is no one’s fault but yours. The more you blame others, the less chance you have to think positive thoughts, see a positive solution, or take positive action towards solution. The opposite of blame is responsibility. Your first responsibility is to control your inner thoughts and thought directions.

2. Understand you always have (had) a choice. Attitude is a choice, and most people select from the negative column. Reason? Negative is more pervasive in society and media. It’s more natural to blame and defend than it is to admit and take responsibility. Ask any politician.

3. If you think it’s ok, it is…if you think it’s not ok, it’s not. Your thoughts direct your attitude to a path. If you think “this is crappy, why does this always happen to me?” You have chosen a negative path. If you think “WOW, this may not be the greatest, but look what I’m learning. And learning what NOT to do again.” You have chosen a positive path.

4. Invest time, don’t spend it. Ignore the media you cannot control – find a project, or make a plan to sell something, or meet with someone who buys (or teaches) instead. You will become a world-class expert in five years – the only question is: at what? Spend (invest) an hour a day working at or studying anything, and in five years you will be a world-class expert. Most people will become world-class experts at some kind of local TV news program and some kind of TV rerun. Me? I read and write while you watch TV. Business news is IMPORTANT. Who got killed or what burned down, unimportant.

5. Study the thoughts and writings of positive people. Read Napoleon Hill classic Think and Grow Rich, TWICE. Read The Power of Positive Thinking. They are priceless, timeless gems of wisdom that you can convert to your own success thoughts. The secret is to read a little each morning.

6. Attend seminars and take courses. The hardest part of taking an attitude course is FINDING one. Look at any school or university in the world and try to find ONE course in ANY of them. I’ll save you the time. The answer is (and has always been) ZERO. Find a Gitomer Certified Advisor in your city (call my friendly office for recommendations – (704) 333-1112) and take YOUR attitude course TODAY.

7. Check your language. It’s just words, but they are a reflection of how your mind sees things, and an indication of how you process thoughts.

8. Avoid confrontational and negative words. The worst ones are ‘why,’ ‘can’t,’ and ‘won’t.’

9. Say why you LIKE things and people, not why you don’t. I like my job because… I love my family because… Say things from the positive side enough and it becomes a habit you will revel in for life.

10. Help others without expectation or measuring. If you think someone ‘owes you one,’ you are counting or measuring. If you give it away freely, you don’t ever have to worry about the measurement. The world will reward you ten times over.

11. Think about your winning and losing words. Be aware of ‘loser’ phrases and expressions. Lose with: “They don’t pay me enough to…” or “That’s not my job.” If you say, “I’m not ’cause he’s not,” who loses? If you say, “Why should I…” who loses? Think ‘learn,’ ‘lessons,’ ‘experience,’ ‘help,’ and ‘solutions’ before you make a statement.

12. Think about your mood, and your mood swings. How long do you stay in a bad mood? If it’s more than 5 minutes, something’s wrong. And your attitude (and your relationships, and your results, and your success) will suffer.

13. Are you the head of the complaint department, AND the chief complainer? Many people slip into cynicism day-by-day. They become bitter because of their jealousy or envy of other people or their own misfortune. BIG MISTAKE. List the lessons you can learn from those you have bitterness for and the results will turn your thinking towards your own success and away from theirs.

14. Celebrate victory AND defeat. In my early days of selling I would go to a department store and buy myself something every time I made a sale. It made me feel GREAT! When someone told me to celebrate victory AND defeat, I started to buy myself something after I lost a sale, too. It felt GREAT. After a while I was feeling GREAT all the time. Winning and losing are part of life and apart from attitude.

15. Visit a children’s hospital. Get comfortable with the plight of others, and feel good about the minuteness of your problems compared to theirs.

15.5 Count your blessings every day. Make the list as long as you can. Start with health if you are fortunate enough to have it. Add the love of children and family. From there it’s easy to build the list.

Oh, and then there are the ‘Attitude Aha’s.’ Many (many) years ago I was riding down the road listening to a tape by Earl Nightingale (one of the founding fathers of personal development). On tape four of his legendary, but unavailable, series “Direct Line,” the topic was enthusiasm. “Enthusiasm” Earl said, “Comes from the Greek “entheos” meaning the God within.” AHA! All of a sudden all the other quotes and advice made sense. The strength of self-belief is within your own spirit, if you hunger for the feeling.

And these words are food for yours. In the words of the Jefferson Airplane rock anthem White Rabbit, “Feed your head.”

Want an instant lesson? Go out and buy a copy of “The Little Engine That Could.” Or go to your kid’s room and get the copy full of crayon marks. Read it regularly. It’s not a book for kids, it’s a philosophy for a lifetime.

Positive attitude is a self-imposed blessing. And it is my greatest hope that you discover that truth and bless yourself forever.


About the Author

Jeffrey GitomerJeffrey Gitomer is the author of The Sales Bible, Customer Satisfaction is Worthless Customer Loyalty is Priceless, The Little Red Book of Selling, The Little Red Book of Sales Answers, The Little Black Book of Connections, The Little Gold Book of YES! Attitude, The Little Green Book of Getting Your Way, The Little Platinum Book of Cha-Ching, The Little Teal Book of Trust, The Little Book of Leadership, and Social BOOM! His website, www.gitomer.com, will lead you to more information about training and seminars, or email him personally at [email protected].

StrategyDriven Editorial Perspective – Good Intentions, Bad Results: Learning from the Panic of 1826

Good Intentions, Bad Results: Learning from the Panic of 1826They say the road to hell is paved with good intentions. In 1825, to deal with the “Indian Problem,” the US Congress formed a region known as “Indian Country,” lands West of the Mississippi (today Oklahoma). Their intentions were good.

“The removal of the tribes from the territory which they now inhabit would not only shield them from impending ruin, but promote their welfare and happiness,” President James Monroe told Congress on January 27. He went so far as to say that without a defined Indian country “their degradation and extermination will be inevitable.”

It’s heartening to know that at least some of the President’s contemporaries could see through his good intentions. New York County District Attorney Hugh Maxwell and twelve other prominent New Yorkers wrote in a pamphlet published in1825 that “the American Indians, now living upon lands derived from their ancestors and never alienated or surrendered, have a perfect right to the continued and undisturbed possession of these lands,” and the “removal of any nation of Indians from their country by force would be an instance of gross and cruel oppression.”

History was not on Mr. Maxwell’s side, nor with his attempts to reform the financial industry a few years later. His prosecution of the Life & Fire Insurance Company, whose owners Jacob Barker, et al perpetuated a fraud that led to the Panic of 1826, resulted in a hung jury. (Eventually, Mr. Maxwell’s efforts did lead to comprehensive reform, including: financial reporting requirements, accounting standards, and defined roles & responsibilities for directors, according to Professor Eric Hilt in a paper about the Panic of 1826.)

Mr. Maxwell’s rationality was no match for his era’s good intentions. For what lead Life & Fire’s directors to commit fraud in the first place was in part driven by a desire (so they claimed) to extend credit to high-risk borrowers being ignored by traditional banks. When those borrowers started to default en masse, fraud appeared to be the only way to repay their investors, but unfortunately, even that didn’t work.

Why was an insurance company doing a bank’s work? In the 19th century, banking was the most profitably industry in America, and incumbent banks fought hard to protect their profits. To open a new one involved special-act charters and bitter legislative battles. Would-be owners required both political and financial capital, which few had in equal measure.

Enterprising merchants like Mr. Barker started circumventing these laws by forming insurance companies whose charter empowered them to lend their capital. In so doing, they created a new financial product called a post note. A typical post note transaction went as follows: a borrower approached an insurance company and requested a six-month IOU of $1000, minus a discount of say 3%. The borrower would then sell the discounted $970 post note on the money market, also paying a discount to the post note purchaser of say $30, receiving $940 in cash.

After six months, the borrower would repay the insurance company’s IOU of $1000. The insurance company would repay the money market investor’s post note of $970, yielding a $30 profit for both the insurance company and the investor.

While rates and terms varied, it was not unusual for post notes to trade at yields of 2 percent per month or more, compared to banks that were lending at yields of five percent per year, Professor Hilt’s research found. Needless to say, these products were very profitable as long as default rates were low.

But higher yield meant higher risk, since borrowers who sought out post notes did so because they did not qualify for the less expensive credit from traditional banks. Despite their dubious quality, the corporate guaranty by the insurance company created a sense that the investments were safe. This combination of high yield and seemingly low risk sparked a credit boom.

“The judge the lawyer the doctor the clergy the widow the trustee of orphans all fell into the common vortex of investing in these bonds,” Life and Fire Insurance Company director Jacob Barker wrote in a letter in 1827.

Like post notes, what made sub-prime mortgage-backed securities (MBS) so attractive to investors during the boom years was their high yield and perceived low risk. Unlike 1826, where the secondary market was created by the private sector, our government in many ways created the secondary market that gave sub-prime loans both the cash and perceived safety they needed to expand.

This was all done with good intentions. Looking to increase the homeownership rate and “foster affordable housing,” the Housing and Urban Development (HUD) department issued regulations that required 55% of all government sponsored entities (GSEs) to purchase “affordable” loans from banks, either directly or through packaged MBS.

Most of these “affordable” loans were in fact sub-prime, “for persons with blemished or limited credit histories,” and “carry a higher rate of interest than prime loans to compensate for increased credit risk,” according to HUD.gov. In 2009, forty percent of mortgages were sub-prime according to Forbes.com.

By 2007, Fannie Mae and Freddie Max held $227 billion (one in six loans) in nonprime (aka subprime) pools, and approximately $1.6 trillion in low-quality loans altogether, according to Forbes.com and the Congressional Budget Office (CBO).

“That was a huge, huge mistake,” said Patricia McCoy, who teaches securities law at the University of Connecticut. “That just pumped more capital into a very unregulated market that has turned out to be a disaster.”

Nonetheless, when the crisis hit in the Fall 2008, the financial world seemed to be blind-sided. “It’s a new financial world on the verge of a complete reorganization,” said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

But was it a new financial world? In many ways, looking back to the Panic of 1826, we see ourselves looking back at us. Both were defined by financial innovations that seemed to defy the natural law of risk and reward, by promising a high yield and low risk. Both crises fooled investors into believing that transferring risk is the same thing as removing it. Both crises were made worse by the good intention that lending money to people who can’t pay it back is good for society. Both crises proved it’s not.

In our time, the implosion of the subprime lending market “has left a scar on the finances of black Americans,” the Washington Post reported in 2012, “that not only wiped out a generation of economic progress but could leave them at a financial disadvantage for decades.” (HUD.gov studies reveal that African-Americans are one-and-a-half times more likely to have a subprime loan than persons in white neighborhoods.)

Like the comprehensive financial reforms made after the 1826 panic, we can be reasonably sure that the numerous reforms issued after our own will fail to avert another crisis. This is because financial regulation cannot address the cause of financial crises that lives in our mirror. As long as there are borrowers who can’t see through good intentions, and take on more debt then they can repay, there will be financial crises.

Real financial reform means living within our means, and abiding by the natural law of risk and reward. With the rising default rate on student loans, the increasing popularity of sub-prime auto loans, I fear that we have not yet learned our lesson. I’m confident we will eventually, but like our predecessors, it may have to be the hard way.


About the Author

Cara WickCara Wick writes about American financial and political history at www.bankersnotes.com. She holds a BA from Williams College and an MBA from the University of Iowa. Cara can be reached at [email protected].