The first two instalments of my 20 Lessons from 2020 looked at marketing and business. This piece focuses on the lessons we can learn from the changes to our economy, highlighting three of the sectors, and the one demographic, that have been hardest hit.
11. Will streaming finally kill off the multiplex?
In the late 80s, the death knell sounded for cinema as annual admissions hit an all-time low (around 54m p.a). But it turned out to be a false alarm. Admissions have been on a healthy upward tick ever since – up to 124m p.a. by the mid 90s, and hovering around 170m p.a. ever since – despite the launches of VHS, Blockbuster, satellite TV and DVDs through the post. Even with the recent meteoric rise of the streaming platforms and mega-TVs, it was still doing pretty well until Coronavirus came along.
There will always be an audience for the blockbusters and the family movies, teens will still use the multiplex as a place to escape their parents and meet their friends, and their grandparents – who might not have the huge TVs and Netflix subscriptions – will also return when it’s safe.
But home cinema fans will only be lured back if the chains invest in the experience as well as the movies. The lack of staff is a big issue. The latest AV/sensory experience is worthless if there’s no-one around to see that the movie has started with no sound, the house lights are still up, people are talking or using their phones, or the expensive interactive seat is dirty or broken. The independent arthouse, boutique or ‘supper club’ cinemas realised this years ago and deliver real added value. If the big chains don’t address this, that death knell may soon start sounding again.
12. Can the hospitality sector ever recover?
Without doubt, the hospitality sector has been devastated by the pandemic. Almost £5bn of hospitality turnover was lost in just 2 months at the start of the first lockdown, with around 80% of firms having to stop trading in April alone. And then, after the brief reprieve of the ‘Eat Out to Help Out’ scheme, Christmas was cancelled. But it’s fair to say that many of the casual dining chains have been struggling for a while, so perhaps this is also an opportunity to tackle some of the dead wood and over-supply, which so severely limits choice outside the big cities (my local town certainly didn’t need quite so many branches of Starbucks, Café Rouge, Bella Italia or Pizza Express for example).
During this crisis, it’s the small local businesses that have stepped up, supporting local communities and pivoting to full dine-at-home experiences and takeaway services promoted through local Facebook groups. It proved that no matter how ‘local’ the big chains tried to pretend their pub and restaurant branches were, they really weren’t. Let’s hope our new normal, whenever it arrives, provides everyone with far more choice and many more small, independent bars, restaurants and cafes are able to thrive.
13. And now the death of the Shopping Mall?
The High Street has been on life support for many years, as the big brands moved out and the vape shops and charity shops moved in. Retail gurus like Mary Portas developed strategies to try and revive its fortunes, but nothing really worked. The double whammy of online shopping and a global pandemic means it’s now the shopping malls which are at risk. Dozens of brands and around 200,000 jobs have been lost.
But the root cause is landlord greed, big brand overexpansion, stagnant business models and the national homogenisation of our shopping experience. The UK has a dearth of choice (where do you shop for furniture or homeware if you don’t live in London? Have you seen the choice in the US?!). Covid has accelerated the demise of basket-case businesses, which probably wouldn’t have survived much longer anyway. Arcadia and Debenhams may be the most famous names, but the number of shops (and restaurants) that have collapsed in the last 12 months could fill an entire shopping mall. If the mall itself hadn’t also gone into administration…
But like the hospitality sector, customers will return to the businesses who offer a current, compelling and personal experience. Mary Portas now talks about the ‘kindness economy’ and believes high streets will be home to new types of business – ones committed to making life better. So whilst it won’t happen overnight, the renaissance of the High Street is hopefully, finally, underway.
14. The terrible impact on women
The huge number of job losses in hospitality and retail have hit female employment hardest. Collectively, women have suffered the most from the impact of the Covid, taking most responsibility for caring and home schooling. There’s been a disproportionate impact on girls’ education of school closures. There have been sharp increases in incidents of domestic violence and femicide. And their frontline roles in Care Homes and the NHS greatly increased their risk of catching this terrible disease.
Numerous organisations around the world have calculated the devastating impact of Covid on women’s social and economic prosperity. The consensus is that decades of progress have been rolled back in less than 12 months, a time when it could not have been any clearer that the area of our economy most in need of investment is Health and Social Care (including childcare), as without it we’re all lost.
But instead Johnson green-lights the white elephant that is HS2 – just when no-one is travelling and virtual meetings are increasing – plus a slew of other non-critical infrastructure projects. What is it about male Tory Ministers and their desperation to be photographed in Hi-Vis and hard hats? There are no policies to encourage women into Engineering & Construction, and even if there were, the change would take years. So it’s just jobs for the boys, as usual (a point not lost on Jess Phillips, MP).
So what did we learn? The pandemic has exposed years of complacency and dividend-boosting cost-cutting in many big businesses. Local councils have allowed chains to grow like knotweed at the expense of independent businesses. In many cases, the Big Business mantra of ‘think global, act local’ has been exposed for the lie that it is. Aside from creating low wage jobs, few have shown themselves to be truly part of the communities they serve.
Thousands of businesses will not survive this, so we need to look for green shoots and silver linings. Big businesses needs to do more to connect with their local communities, government (at all levels) needs to stop prioritising big business over small (take note Rishi Sunak), all businesses need to focus on the customer experience, not just what they sell. And we need to keep up the pressure on Johnson’s male-dominated cabinet to build a more social, caring economy in place of his jobs-for-the-boys cronyism.