There’s something daunting about starting 2021 the same way you spent much of 2020: getting ahead of daily COVID-19 case numbers, reminding yourself to put on a mask, and scrolling through Twitter to shake your head.
But that might not be so bad. The concept that the calendar change would suddenly bring a bright new unrealistic world, to say the least.
The COVID-19 outbreaks in Sydney and Melbourne are a reminder (hopefully small and short) that the pandemic will leave permanent scars on society and markets.
This message is perfectly summed up in the latest set of annual forecasts released in video form by Scott Galloway, professor of marketing at New York University’s Stern Business School.
To Galloway’s undying credit, he begins his predictions for 2021 by reviewing his calls in 2020.
Some were falling short, understandable given the upheaval caused by the pandemic, and others were on the rise.
But Galloway’s point is that it is not so much the forecast itself that matters, but the process of thinking and discussing primary trends that is most illuminating.
That way, investors can be more informed by looking beyond some of Galloway’s most impactful predictions: Apple will buy high-tech training motorcycle maker Peleton or Airbnb stock to jump from a third party, for example, And start thinking about the big theme many of your predictions this year.
Galloway calls it The Great Dispersion and in an accompanying blog describes it as “distributing products and over a wider domain where and when they are most needed, avoiding gatekeepers and eliminating unnecessary friction and pricing. “
The pandemic triggered this shift in some industries and accelerated in others, as corporations were forced to seek tactics to get their products into the hands of consumers.
“The core price of the company’s offerings is to be extended to the end customer and classic distribution channels, be they stores, cinemas or gyms,” Galloway explains.
He believes this trend will continue and argues that the paradigm shift is on par with globalization and digitization. “This is arguably the biggest trend in business and will create the most value for shareholders. “
What is unexpected about this concept is its application in many sectors of society and business.
Think of the genuine real estate industry. Galloway predicts that the “headquarters scattering” we saw in the pandemic with remote operation from home will continue as workers accept and ask for flexibility.
Galloway hopes this will meet the request for classic leases, but lead to an increase in the request for collaborative workspaces, as corporations seek flexible tactics to satisfy staff wishes or the need to enter the market. booming, says Galloway.
In addition, he expects that a 10% destruction of the call for advertising housing in the wake of the pandemic in the United States will result in a transfer of between 10 and 12 trillion dollars to where staff spend most of their time: their homes. .
This change, combined with the cash staff are getting from falling transportation costs, is already driving up the value of homes and plywood. According to Galloway’s ambitious prediction, the percentage value of high-end furniture chain Restoration Hardware could more than double, as could the inventory of wireless audio maker Sonos.
The dispersion of fitness and well-being provides fertile soil for greater foresight.
Galloway argues that the length of the U. S. gym market, or the sweaty shopping complex, as he calls it, fell 13% in 2020 when the pandemic hit and may drop between 10% and 30% in 2021.
This price will also be distributed in the house, as other people exercise in the gyms in the house or on their Peleton bikes; This is the reason why Galloway argues that Apple would be smarter to get the attention of consumers if it bought Peleton.
In the healthcare sector, he hopes that retail giants like Amazon and especially Walmart will continue to apply tactics to bypass the classic channels of medical clinics and hospitals.
Galloway says that for most Americans, the local Walmart is closer than the local hospital, giving the retail giant an opportunity to expand the deployment of clinics at its retail locations and expand. expand through acquisition. Walmart’s 2. 2 million workers are also a wonderful floor for healthcare.
There are many other spaces where the Great Scattering will have an impact.
In higher education, Galloway says the money cow from top elementary universities, foreign academics, will dry up, slowing down what he describes as the movement of wealth from middle-class families to universities and allowing for the creation of an army of educational technology unicorns who take their products and straight from academics.
In media, the transition to subscription products, especially streaming, but even classic multimedia products like newspapers, will continue at a steady pace, as even giants like Apple and Disney are taking advantage of it. market craze for recurring income.
Galloway argues that Disney’s good fortune with the Disney + streaming site will see them duplicate into a set that generates recurring earnings, or a “rundle” as he calls it, that would cause consumers to subscribe to the streaming service, other content. exclusive, access to Disney Parks and other offers.
He says that Apple can simply expand its existing Apple TV, Apple Music, and Apple Arcade offerings to join hardware like the new iPhone soon; Getting your wealthiest clients to pay a few hundred dollars a month for the privilege can be a massive profit generator, Galloway argues.
There are also some downsides to The Great Scatter to consider. Galloway says this “runs the risk of isolating us and, in turn, suppressing our empathy, which can have profound negative consequences. “
But it is that dispersion that is not controlled through the friction created through regulation is a concern.
It supplies the very popular US Robinhood equity trading platform, which is helping to update the classic broker style with a direct-to-consumer style.
But Galloway calls Robinhood a risk and puts it on par with the tech giants who he said were willing to aggressively push the barriers of regulation by treating fines and consequences as a business activity.
Galloway says that the gamification of commerce, not making an investment, that Robinhood has used to build its user base and revenue stream is especially damaging in difficult spaces like feature trading, where Robinhood users use 88 times more features than deal platforms such as Charles Schwab and E-Commerce, relative to account size.
“It doesn’t make sense for the young, non-wealthy and green investors flocking to the platform. But that makes perfect sense to Robinhood, who makes more cash promoting those orders than he could teach other people [about] the wisdom of buying and selling corporate stocks and cheap indexed budgets. occasional conservation. Simply put, it makes sense for the collision of cash idolatry, weakened regulatory institutions, and the young adult depression that is Robinhood.
There are other general social effects of La Grande Dispersion that are also being considered.
One of them that comes to Chanticleer’s brain is that there are many jobs involved in the middle of an origin chain, in retail, higher education, or healthcare, for example, and many of them can be drastically replaced or eliminated entirely. What does this mean for communities and economies?
The long run of cities is another consideration, we probably want to know more about the path of the pandemic before we can plan for this.
Either way, it seems Galloway has figured out a way to sum up the great replacement that will remain after the pandemic: a distant memory.
Apple may not be Peleton’s this year and Robinhood may not be constrained by regulation, yet it’s hard to believe that consumers are giving up the direct relationships they have forged with big business and big. brands.
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