Responsible Business Restart while Gaining Consumer Confidence
Businesses that reopen successfully as economic restrictions ease, or expand successfully, have laid the groundwork ahead of time, reopened carefully, and monitored changes as they evolved. Even if a company has been open, expansion opportunities may increase as the quarantines wind down and consumer confidence increases.
The Consumer Confidence Index continued to rise in June, beating analysts’ forecasts as the economy appears to be slowly bouncing back from rock bottom. Following two months of rapid decline, the free-fall in consumer confidence stopped in April. Short-term expectations rose as the gradual reopening of the economy helped improve consumers’ spirits. With stocks taking off, the U.S. reporting 2.5 million jobs being added in May and national unemployment up 1.4% from April, it gives credence to the idea that consumer spending has started to right itself. But while consumer confidence has shown improvement, the potential second wave of COVID-19 is likely to keep a cloud of uncertainty hanging over consumers’ heads.
Responsible reopening continues to be done in phases, which has differed regionally. Even within Ohio, we have seen local variations based on county-by-county data.
For a business, laying the groundwork to reopen begins by monitoring how close to easing restrictions a region is. If a company operates in different states, counties, or metropolitan areas, it should be set up to monitor each area. Also, businesses that depend on suppliers – like a restaurant relies on food wholesalers, should give them a call. Are they geared up to provide what the company will need? Will suppliers run into shortages that the company will need to work around? Successful companies have thought through these questions.
Staying in touch with your customers even when your business is closed or not fully available to serve them is a critical strategy. Customer challenges come in two forms: too many or too few. Most managers do not think of too many customers as a challenge, but we witnessed what happened when dentists and barbers reopened: pent up demand came rushing through their doors.
Most businesses, though, must worry about getting enough customers. Listening to your customers’ needs is essential. Companies that become more proactive – predict customer behavior and take- action, have in some cases become more diversified in the products they manufacture, sell or service. Also, companies are collaborating more with their business competition at various levels to increase sales. The Chamber Alliance calls that Collabetition – where collaboration meets competition, opening the door to endless possibilities.
Also, keeping in touch is important to ensure that you will continue do business with your customers. A restaurant limited to takeout orders might ask customers for an email address so that they can communicate as they reopen. A business may have to dust off old email campaigns or past order records to put together a mailing list, but it will pay off. Press releases announcing plans to reopen and additional reopening signage can also help. The Chamber Alliance can help you get the word out to our regional business community that you are now open.
At the same time, successful businesses will stay in touch with their employees. Laid off workers should be called weekly to stay in touch. Managers should communicate that they want the employees back when possible, and gauge how likely each one is to return to work when the time comes. But with unemployment in Ohio reaching an all-time high of 26%, some attrition from the workforce is likely after employees have been away from the job for an extended period-of-time. Organizations must evaluate if they will need new hires.
The final step in laying the groundwork is planning for safety and sanitation. Until a vaccine is widely available, physical distancing will continue. Managers must consider how far apart employees and customers can be from each other. Will they wear masks or other protective gear? Can barriers be installed? Can employees be put into separate teams that work together, so that if one person becomes sick, only one team quarantines? What needs to be cleaned, how often and by whom?
Over time, adjustments will be necessary. It is possible that some regions will loosen up too much, leading to a resurgence in COVID-19 cases. Areas facing a resurgence of COVID-19 may return to shelter-in-place orders or partially tighten up what is allowed.
If caseloads continue to decline, further easing will occur. Less physical distancing would allow more customers to be closer together, as well as employees working in tighter spaces. Attitudes of customers and employees will also change as time goes by. Remember that much of our current distancing is voluntary behavior. Although some people are breaking the guidelines, many others choose to stay extra safe.
How much time will pass before we return to normal? It will vary from industry to industry. Some companies may rebound quickly, but others will face continued challenges. Consumers will remain concerned about their financial prospects. In addition, lingering thoughts of inflation could lead to a sense of diminished purchasing power and curtail spending – all affecting consumer confidence. Like most parts of business, reopening the economy will proceed best at companies that gave thought to their processes, anticipated possible challenges, and adjusted their operations along the way.
It is worth noting that award-winning chief U.S. economist, Ian Shepherdson, recently stated, “the net drop in consumer confidence has not been as great as the recession in 2008. This is due partly because people believe the pandemic will pass relatively quickly, and partly because stimulus checks, and enhanced unemployment benefits have shielded many people.”
Also, most leading macroeconomic indicators are still positive and on the rise. An economic recovery is likely in the foreseeable future and record-high levels are predicted for the U.S. economy before too long. We all look forward to that day!
Thank you for being a valued member of the West Chester ▪ Liberty Chamber Alliance. We are here to help you. Please let us know what we can do to responsibly restart your business. Please stay safe.
NOTE: This article is intended to provide our Chamber members and business community with a perspective on the evolving Coronavirus pandemic and the implications to our companies. The outbreak has moved quickly and some of the perspectives in this article may fall rapidly out of date.