We are not going back to our old economy. It’s over.
Right now, something incredibly positive is occurring in our society. It’s never happened before in world history (feel free to correct me if you can find an example).
Every scientist, health leader, politician, teacher, business leader, family member — everyone — is converging to solve one problem.
That’s incredibly powerful and gives me immense hope for our future.
In addition, I believe 3 factors will emerge going forward: convergence, disruption, and opportunity.
I’m seeing 2 convergences related to the American consumer that will have a massive effect on your business:
1. American consumers are no longer buying for “want” — they have converged to primarily buy for “need”.
My take: “Want” is aspirational buying, and “need” represents making purchasing decisions based on the bare minimum. Your brand, product, or service must fulfill consumers’ “needs” not their “wants”.
2. The buying decisions amongst men and women have converged. For the first time in decades, men and women are buying for the exact same reason (which is correlated around “need”).
My take: The data clearly states that men and women are overwhelmingly buying products and services for these 3 reasons — helping others, safety, trust.
While these convergences are positive in nature, we are also seeing massive disruption in 4 industries — and the majority of businesses within those industries will soon be gone forever. But there are opportunities from this disruption as well.
What are they? How will you be affected?
Before we jump in, I want to bring your attention to someone you must pay attention to in this moment — Peter Diamandis. The famed CEO, best-selling author, and venture capitalist was named by Fortune as one of the “World’s 50 Greatest Leaders”. He’s also the Founder and Executive Chairman of the XPRIZE Foundation.
No one is more in tune with economic disruption (mostly for the positive) than Peter. I recently sat down with him to discuss the biggest disruptions in our economy.
Watch our interview here:
If you want the crib notes, here are the 4 industries that are in big trouble — and how opportunity abounds as well.
1. The Restaurant Industry
Do you remember the housing bubble in 2008? Yeah, the restaurant bubble is similar. For 20 years, this volatile industry has seen unprecedented growth. Until now. And even when we fully open the economy, 30–50% of the restaurant industry will disappear. Think about it — if you remove 65% of a restaurant’s seating and bar to be socially distant, there is no money to be made.
Opportunity: With so many restaurants disappearing, it might be a good time to actually open one. Seriously. You can negotiate cheap commercial rent, the labor is available, and you can be flexible with seating capacity (you aren’t going to be married to the old model).
2. Brick and Mortar Retail
This industry was already heading towards a catastrophic disruption before the coronavirus. I wrote about it last year, but totally missed the mark that a pandemic would be the cause of it. Many brick and mortar retail stores won’t recover from the losses incurred this spring (and the slow opening of the economy this summer). American consumers are being trained to buy online-only right now. All of this is going to be a huge hit for their industry.
Opportunity: This will vastly accelerate the Virtual Reality e-commerce industry — where, for example, a consumer can put on a headset in their home, peruse a “virtual” retail clothing store, and make purchases. Investing in VR companies seems like a great fit right now.
3. Commercial Real Estate
If a huge percentage of restaurants and retail stores are disappearing, expect a major disruption to the commercial real estate market. In addition to the acceleration of shopping online, we are all being trained to work virtually. When life returns to semi-normality, expect an increase in stay-at-home work. This will further disrupt the commercial real estate industry. It’s not going to be pretty.
Opportunity: It’s obvious, but SaaS (software as a service) companies that eliminate the need for an office will continue to explode going forward. Companies like Slack, Taskworld, Zoom, etc. will speed up this disruption.
4. Social Media
I wrote about this disruption a year ago. Let me be clear, social media isn’t going away, I’m not saying that. But, I’m reminded of an old saying that applies to the social media economy right now. Twelve years ago social media “started as a movement, then it became a business, and eventually it turned into a racket.” A racket where most people have no desire to “connect”. They only want to show you how great their life is, and control how you perceive their life (which is better than yours) via pictures and video. Frankly, no one gives a crap about that now. If you post on social media about how amazing your life is right now, you are tone deaf. I’m not sure where this downturn will go, but I do know that for the majority of non-substantive “influencers”, they will no longer make money by bragging about their lives.
Opportunity: This is a very positive disruption (in my opinion). The opportunity is that we can now be more appreciative of our friends, families, and values. We can focus on using social media to connect and help others, build trust, and provide safety. Positioning your brand via social media, on those 3 factors, will sell more products or services in this new economy.
Convergence, disruption, and opportunity. These are the 3 factors I’m seeing in the economy right now. Don’t be scared of it — lean in, build something great, and serve others with purpose.
P.S. — Your business needs to adapt right now to this new coronavirus economy. I talked with the $21.7 billion man, Jay Abraham, on his Ultimate Entrepreneur podcast more about the messages you must utilize in your marketing to convert customers. Listen here.
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