It has only been 6 weeks since the lockdown has taken effect but already it’s clear that life will not return to normal soon. When this health crisis abates, we will be in a new world. Here are some ways this new world will break with the past:
Supply chains will be local rather than global. The tariff and trade wars had stretched global supply chains to breaking point. The pandemic broke those chains. Companies will look to diversify their suppliers and to favor local suppliers at a higher cost.
Shop, work and play online. Retailers with physical stores were already struggling to compete with online shopping. The shelter-in-place rules forced everyone to shop, work, or play online. So in-store shopping will take a hit long-term.
Home-bias will increase dramatically. We have favorable bias and perception of lower risk for what’s closer to home. Investors are likely to revert to more investing closer to home.
Healthcare for all becomes a more standard view. During the crisis, there was a unified view that free testing for all was critical in protecting everyone. As the rich and poor got affected, it became clear that we need a good healthcare system for all.
Loss of trust will take time to recover. How long will it take before folks are comfortable going on a cruise again? It will take some time. My guess is 2 years or more.
Insurance takes center stage. Companies will actively develop plans and look for insurance services to protect themselves.
After any prolonged period of crisis, there is a strong desire for rebirth and renewal. There is pent-up demand for products and services; folks are eager to get back to work, to invest, and to shop. Hopefully, that rebirth is also part of the new world.
