|While businesses from Main Street to Wall Street consider when to reopen in the face of the coronavirus pandemic, a more urgent concern is how to retain their customers, according to an expert in business strategy and consumer behavior. |
“What happens to businesses when buying patterns are changed indefinitely – when customers have sought out alternatives to products and services, or simply gone without – should be on the minds of CEOs everywhere,” said Scott Latham, an authority on business decline and turnaround. “A jilted company’s permanent revenue shortfall can put its existence at risk.”
The economic challenges brought on by the coronavirus are giving rise to dramatic shifts in buying behavior, according to Latham, who researches the evolution of business, industry and the workforce. In best-case scenarios, he says, consumers temporarily change their purchasing habits, typically seeking out alternative products and services at reduced prices. Once economic recovery comes, some may return to their old shopping routines – but many may not.
“Some businesses – the smart ones that play to the temporary shifts as well as predict permanent changes in consumer behavior – will benefit. An obvious example is Amazon,” Latham said.
In fact, Amazon’s continued rise during social distancing signals the end of the line for traditional retailers, according to Latham, who added many consumers are now simply too afraid to shop in person due to fears over contracting the coronavirus. Neiman Marcus, which recently reported close to $5 billion in annual sales, declared bankruptcy yesterday due to the pandemic, following J.Crew.
“Brick-and-mortar stores can't recover. They can’t – they are dead. Online retailers can offer products at a lower price and with home delivery. Only experience- and service-based businesses, such as veterinary clinics, where customers have a relationship with the company, will make it in traditional retail,” Latham said.
Latham is also available to discuss:
• The businesses and industries he thinks will survive;
• What the coronavirus outbreak means for the future of jobs and technology in the workplace, as services such as telemedicine come to the fore.
Latham is an associate professor of management in UMass Lowell’s Manning School of Business. To arrange an interview with him via phone, email, Zoom or another platform, contact Nancy Cicco at [email protected] or Christine Gillette at 978-758-4664, [email protected].