Impact of COVID Pandemic on strategies for Retail Industry, Food and Drink - board strategy review. Futurist keynote speaker

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Retail strategies for a post-coronavirus world. As a physician by first training and a Futurist advisor / keynote speaker on industry trends and strategy to over 400 of the world's largest 2000 companies, with a proven track record of longer term forecasting over the last 25+ years, here are some guiding principles for the retail sector beyond Coronavirus / COVID.  

Here below are notes I made on 25th March 2020:  judge for yourself how right they were.  Retail sector trends unfolded during April 2020 to May 2021 much as I described below, except that spread of COVID-19 in emerging markets happened more slowly and steadily than I predicted in March 2020.

The retail sector will recover more rapidly in emerging markets with younger populations, less access to health care, and faster spread of coronavirus.

The Global Crisis will accelerate pre-existing retail trends. Most megatrends described in my books, including The Future of Almost Everything, will continue to shape the world fo retail, food and drink sales as before, but the Coronavirus pandemic will bring forward the timings of many key events in many industries.

As a physician by first training and Futurist advisor / keynote speaker on retail trends and strategy to over 400 of the world's largest 2000 companies, across every industry and region, with a proven track record of longer term forecasting over the last 25+ years, here are some guiding principles to retail trends and consumer behaviour beyond Coronavirus / COVID-19.

Longer term forecasts regarding Coronavirus / COVID-19 impact on business strategy: shopping malls, e-commerce, food and drink sales, mobile payments and so on.

I predicted many times future global threats from new pandemics

I have warned retailers and food companies for over two decades about significant threats from new mutant viruses which appear roughly once a year, usually emerging in Southern China (for reasons unclear), just one of many potential Wild Cards that could strike down successful global retail business.  For example, when the SARS outbreak began to threaten our world in 2003, my media warnings about the threats from new mutant viruses reached an audience of over 300 million.

One reason I am so sensitive to the threat from new mutant viruses like Coronavirus is that 32 years ago, my own medical practice, looking after people dying of cancer at home in London, was hit by a new mutant virus called HIV - 85 million deaths since then. And 31 years ago, I started in our family home an international foundation called ACET preventing HIV spread and providing practical support in many of the world's poorest nations such as Uganda, Nigera, DR Congo, India, Thailand and so on as well as in nations like the UK and Ireland. So yet another new illness, like COVID-19, is no surprise.  It was only a matter of when.

Need for Agile Leadership and Dynamic Retail Strategy

I have also warned many hundreds of times at global corporate events for retail and related sectors over the last 20 years that:

"The world can change faster than you can hold a board meeting. The days of having only one retail business strategy are over.  You need plan B, C, D and E as well - because there is no time to plan when crisis hits, and in our hyper-connected world, the impacts on any retail business are even greater and faster. That's why we need Agile Leadership and Dynamic Retail Strategy."  I was not just talking about viruses - but a host of Wild Cards which can have gigantic impacts at the speed of light across nations and industries.

Book your own board strategy review and coronavirus update - contact Futurist and Physician Dr Patrick Dixon 

Coronavirus pandemic will sweep uncontrolled across most emerging markets, rapidly

Whatever happens in the EU, North America, Japan, Australia and so on, 85% of humanity lives in emerging markets, many of whom have very limited health care facilities, and which are likely to see very rapid, uncontrolled spread, at a time when developed nations are still employing all kinds of radical strategies to flatten their own peaks of cases.  

The result will be that so-called herd immunity (when 70-80% of a population has immunity from previous infection) develops much faster in poorer nations, albeit with huge death rates amongst older and more vulnerable people.  Having said that, many emerging nations have high birth rates, young populations and not many elderly with multiple health problems (lack of health care access means many don't survive as long as in developed nations).

What this all means is that retail, food and drink, and grocery business will be returning to normal much sooner in the poorest nations (within 3-5 months from their first major cluster of cases), who will be impacted by many deaths, but whose "community resistance" will climb rapidly to Coronavirus.

However there are many unknowns - for example how long immunity lasts after infection before someone can be hit again by the same virus or a slight variant.

Retail sales in developed nations will be impacted for longer than in many emerging nations

Developed nations with the most powerful anti-infection strategies will have populations which are largely without any antibodies, for many months, maybe over a year.  Maybe longer.  Depends on many factors.  That will create an ongoing vulnerability to further rapidly growing clusters of infection, some of which may also become national threats, and will disrupt retail sales repeatedly.  The only answer to this will be very large scale vaccination, when the technology arrives.

Google N1N1 and look at Wikipedia entry to understand this more - repeated clusters some time after pandemic.

For these reasons, paradoxically, retail disruption is likely to be much longer, and repeated, in many of the most developed nations, compared to the poorest nations.

Global Crisis will accelerate many pre-existing retail sector trends

Many things in retail will however change less fundamentally than you might imagine - in March 2020.  Others will change faster and further than many expect.  The key is knowing the difference.

Most mega trends described in my books, including The Future of Almost Everything, will continue to shape the world of retail as before, but the Coronavirus pandemic will bring forward the timings of many key events.

For example, physical retail outlets will lose out even more to online shoppers, with big jump in online sales which will only partially reverse after the pandemic has ended.  Many Shopping Malls will struggle to re-open in developed nations.

Many global retail trends will be relatively unaffected in the longer term by the Coronavirus Pandemic

85% of humanity will still be living in emerging markets, that's 85% of tomorrow's retail customers.

Most new middle class retail customers will also found in tomorrow's emerging markets.

Technology costs will continue to fall towards zero.

Governments will take radical action to support consumer spending / national economies

Expect Central Bank lending rates at almost zero interest or going negative to mitigate economic impacts of the Coronavirus pandemic.

Expect large-scale printing of money (digital equivalent is so-called "quantitative easing") to encourage consumer spending.

Whatever it takes to try to prevent this Coronavirus causing deflation and major recessions.

In the 2008-9 crisis, governments were worried about "moral hazard" - risks of bailing out banks and other financial institutions who may have contributed to the crisis any poor risk taking. If the bail outs were too generous, the argument went, banks etc might become even more careless in future. Hence moral hazard inhibited what governments did.

But this time around, there is no moral hazard.  There is no risk of rewarding poor behaviours in the past.

And because of huge steps taken to reduce risks in the banking sector, global banks are in a much stronger position on the whole than in the last, to withstand economic shocks.

The global economy was growing nicely before the crisis and many nations were seeing stable growth with low inflation, job creation etc, so the fundamentals are there for a strong recovery SO LONG AS governments manage to prevent massive closures of perfectly viable businesses, including retailers, which would otherwise have a really great future.

Increased government debts will create pressures on spending for a further decade

The longer term impact of the Coronavirus pandemic will be additional government debt, on top of debt created when fire-fighting the last global economic crisis in 2008-9, much of which had not yet been repaid. 

What it all means is that when all the Coronavirus / COVID-19 crisis has finally resolved, governments will be shorter of funds than they expected, paying more in interest than they expected, and needing somehow to reduce government deficits each year to zero, to then start repaying debt.

All this will be painful with pressures on government spending whoever is in power, plus higher taxation, which may mean more tax on retail sales eg VAT, or combination of both.

Impact of Coronavirus on Food and Drink Retail,  e-Commerce

Even before the Coronavirus Pandemic, grocery and food retailing was being transformed, with rapid shifts to online deliveries, which will accelerate. However, the human hunter-gatherers instinct will endure, and when the Coronavirus pandemic is over, we will see pent-up shoppers enjoying the freedoms and sensations of physical food shopping again and other traditional retail.

Other than that, the mega trends impacting the retail sector will continue. The retail food industry will continue to be conservative and risk averse, with long-enduring and much-loved brands that span several generations – foods that grandmothers remember feeding their own children.

We have also seen how sensitive the food industry is to issues of consumer trust, which will drive the continued growth of traceability, transparency, labelling, and so on. The entire retail food industry will be far more tightly regulated in future. We will also see a new focus on the health aspects of foods; expect new performance foods with claims that they build strength, or immunity, or improve memory.

Nutrition will be a number one issue for many well-informed food buyers, who will increasingly recognize the benefits of nourishing healthy gut bacteria, which make many of the molecules that we need to renew our own cells and fight disease. Expect many new types of food preparations and formulations, designed to create foods with optimum nutritional value, using ultrasonics, special additives, hyper-speed blenders, liposomes and a host of other technologies.  The boundaries between pharmacology and nutritional microbiome science will blur and some pharma companies will expand into this lightly regulated area. 

Expect new frozen food technologies to be adopted rapidly, allowing even the most delicate of fruits to be perfectly frozen without damage or changes in taste and texture.  The same methods will be used to perfectly preserve vegetables and very delicate fish. The results of this technology are astonishing to food lovers, and will delight chefs of the best restaurants in the world.

Expect a rethink about food irradiation over the next few years, as a low-cost way to ensure long shelf life, and less food waste, without altering taste, following a wave of additional research that suggests it is completely safe.  It means, for example, that a loaf of bread can stay perfectly fresh in a sealed plastic bag for many months.

We will also see many more food scandals such as happened with the contamination of rice in China, and of animal feed by dioxin in Belgium. Each will cause a huge emotional reaction in consumers, with widespread, angry boycotts. Expect improvements in animal welfare across the EU and in other nations, and an increase in use of animal tagging for 100% traceability.

Impact of Coronavirus on mobile payments, use of cash and banking

Hundreds of millions of bank notes were destroyed in China during the Coronavirus pandemic because it was feared that they would be vectors for virus transmission.  The Coronavirus pandemic has shifted tens of millions of shoppers online, using the web in ways they never have before, and these retail habits will endure.  At the same time, many consumers have shifted to cashless payments to avoid ATM machines or physical banks, especially using no-touch payments.

Book your own board strategy review and coronavirus update - contact Futurist and Physician Dr Patrick Dixon 

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