Post-virus everything is going to change. That’s the dominant view of national and international media. But how exactly do they see the future? This regular digest section gives some of their answers and views/Edited by George Hamilton
In this edition (May 22)
- Retail: Major changes are coming. First, the Irish experience – and forecasts – and then retail guru Mary Portas outlining who will win on the High Street:
- How was your shopping experience? In Ireland – it hardly matters now
- The retail experience in Ireland has changed in ways that would have been virtually impossible to imagine as 2020 dawned.
- ‘People will want brands that reflect their values’: Mary Portas on how lockdown will change the high street
Many shops will be destroyed by the pandemic’s impact on business. But, says the shopping guru, those who did the right thing will reap the benefits
- Offices: Two views on the future of offices post-virus, one optimistic from an industry cheerleader, and the other quoting business leaders saying home working is changing everything:
- The fallen towers? Why life in the office will never be the same again
Huge skyscrapers, once seen as a way of life for big corporations, are suddenly facing an uncertain future
- Working from home: reports of the death of the office have been exaggerated
- Because we like working together, offices still have a future
- ‘A new normal’: how coronavirus will transform transport in Britain’s cities
The dominance of the car is being seriously challenged for the first time in decades, say experts
- Rich and poor: Millions in the UK fear for their jobs, as yet another business leader speaks out against inequality:
- Despite UK furlough scheme 6 million fear losing their job – study
- Survey finds 60% of workers are at most three months away from rent or mortgage default
- Covid-19 a ‘wake-up call’ to build fairer society, says billionaire JP Morgan boss
Jamie Dimon says crisis must be used to ‘rebuild an economy that creates and sustains opportunity for dramatically more people’
In a few short days in March the retail experience in Ireland changed in ways that would have been virtually impossible to imagine as 2020 dawned.
David Fitzsimons is the chief executive of umbrella group Retail Excellence: “Home working is here to stay and that is going to lead to a reduction in the footfall in big towns and cities. It might be down by around 20 per cent and those 20 per cent will not be around to buy takeaway coffees and shop in department stores on their lunch breaks.”
While bigger towns will feel the pain of that, he says smaller towns and suburbs might benefit. “There will be more people spending more time and more money in their local communities.”
But more money will go online too, he warns. “There will be a monumental increase in online sales”
Fitzsimons says that there is already a move towards reservation shopping which will see people booking a time slot for a particular shop. That will allow shops to manage footfall and reduced queues. But it will take the spontaneity out of the shopping experience.
“Telesales will also be back in a big way, particularly for things that require some expertise on the part of the salespeople,” Fitzsimons suggests. “So if you are buying paint, you might ring the shop and staff will be able to advise you and tell you what materials you need and how much paint you are likely to use. Telesales will be important for people who want to make informed purchases.”
He says drive-thru options will become more commonplace and not just for those in search of a burger or a donut. Such options will allow people make an online or phone order. They will get a unique transaction number and when they arrive in the store carpark they give the number. The boot will be opened and the purchases will brought out and the customer will drive off. It could scarcely be more utilitarian and joyless.
In a recent report on the retail sector, PriceWaterhouseCoopers’s Irish division said starkly that Covid-19 “has changed everything”.
It says the “predictable playbook has been torn up and the industry now faces uncharted waters. There is growing acceptance that when normality does return, it will be a new normal.”
And what will that new normal look like? PWC suggests as shoppers return, “they will want to feel safe when in-store. Trust, hygiene and social distancing will become key factors in-store choice, especially if those measures remain in place for a prolonged period of time. Consumers will start to build this delay into their shopping trips which may become less frequent as they seek to minimise time in public.”
1 Many shops will simply not survive. The grim reality is that many retailers – big and small – survive on wafer thin margins and being forced to shut up shop for at least three months may see shops go under.
2 We might all value the people working on shop floors just a little more. Before the crisis, many people did not highly regard those keeping shelves stocked and tills ringing in supermarkets across the country. Without them, however, the lockdown would have been unimaginably worse.
3 The move online will gather pace. As people feel less comfortable going into shops or less inclined to queue to get into them, the popularity of online trading is only going to grow. According to digital marketing agency Wolfgang Digital, April’s online retail revenue in Ireland was almost treble that of pre-covid levels.
4 A bright side to the crisis has seen many independent retailers here launching online operations almost overnight. It is to be hoped that consumers will stick with them and continue to shop local even when they move to shopping in the online space.
5 Maybe we will all shop local. When the dust settles many small, independent retailers will be able to pat themselves on the back for staying afloat and imaginatively reinventing how they go about their business.
6 In a normal year, consumerism only takes the shortest of breaks. But maybe the enforced pause will teach people that they don’t need to be shopping all the time.
7 The shift to contactless will be relentless. Already there are shops all over the country that will not accept cash. That is likely to happen on airplanes too. And it will only become more commonplace as retailers and consumers look to reduce their exposure to potential sources of infection.
8 In the weeks after the retail space starts to reopen there are likely to be a lot more promotions as shops try their best to incentivise people to come back to them.
9 Social will be more important than ever. The power of social media to connect with consumers unable to visit stores in person will be pushed to the fore. That is not going to be easy for many companies.
10 More retailers will adopt an ‘Argos style model’. There will be a counter in the front of the store which customers cannot go beyond. You will have to request your item and it will be brought to you. One advantage of this – for consumers at any rate – is that it should dramatically reduce the level of spontaneous purchases you make. For retailers – and for many consumers, it should be said – that will be a distinct disadvantage. Irish Times May 18
‘People will want brands that reflect their values’: Mary Portas on how lockdown will change the high street
Retaill guru Mary Portas says that what consumers are looking for has changed. “What we’ve gone through – certainly in the fashion industry – over the past 20 years is: ‘How fast and how cheaply can we get this into the market?’ And it was all about how quickly things were turned around. So you had businesses that were just fast fashion – it was about operations, it was about physics of the business,” she adds.
“Some of those are crumbling, and we will see those falling. The same with some of the stores that were about more stuff, just stuff, stuff, stuff – your House of Frasers, your Debenhams, your Macy’s in the US. It was just floor after floor of stuff, and that game is over.”
The recession that followed the banking crisis led to the rise of Lidl and Aldi, while Poundland and Primark also prospered. She says that, this time around, that kind of retailer will be important again. “There’s going to be a real polarisation from those who have and those who have not,” she says. “You’re going to see a real deep discounting happening at one end, where people are having to buy from those institutions. At the other end, there is going to be a growth in people buying and wanting brands that reflect their values.”
The idea that shoppers may be alert to how businesses treat them, their workers and the planet plays into something Portas was already talking about before all of this began [and has recently] outlined her vision of a “kindness economy” where businesses thrive because they respect people and the environment.
Although, during the lockdown, some spending has moved online, Portas says there is a “power” to bricks-and-mortar shops: “If [people] do come into your store, they’re two-and-a-half times more likely to buy.” But some retailers are not delivering places that people want to go to.
One thing she talked about in 2011 was support for small, local businesses. And it seems that the crisis has seen us turn to them in droves – according to Barclaycard, spending at local off-licences, greengrocers and convenience stores rose by almost 40% in April. A separate survey by the card provider found that many were planning to increase their spending at local butchers, cafes and farmers’ markets in the future.
Portas says the crisis has changed the mindset of some of these businesses and talks enthusiastically about examples she has seen in her local community. “Many of them have woken up to: ‘Actually I can do deliveries. I can get a digital presence,’” she says. “I was talking to [a bookshop owner] the other day, and they said: ‘I’d never had a website before and I’ve set it up, and I’ve already taken 25% of what I took last year. And I’m able to deliver the next day in the way that Amazon can.’”
She sees these shops as key to innovation on the high street. “I’m calling them the local disruptors,” she says. “They are the ones who have learned from this, and they won’t go back.” She describes the owner of an independent restaurant she knows is struggling because there is still rent to pay despite being closed, but has had a fantastic idea to help it survive. For £50 a year, customers can join a club and get a range of benefits – priority booking, a 25% discount once a year for a birthday meal, a bottle of wine at cost price.
“There’s going to be a real hyperlocal subscription service,” she says. Neighbourhood grocers, wine shops and the like who are already delivering should consider offering a regular service for customers. “You may have people thinking: ‘I don’t want to go out and get my food. If I can get that straight from the grocer, picking it for me, there are fewer people who have handled that and that’s going to be delivered to my door. Maybe that’s going to cost me an extra five quid – but you know what? I’m going to go for that because of the time I would spend otherwise.’”
For large and small businesses, what has happened over the past two months will yield a legacy. “I do think that what will come out of this is memories of the businesses that helped us through it … and I think those memories will shape our decisions in the future,” she says. “That support you have for businesses that were there when you needed them, and were behaving well … that emotion goes deep.”
She adds: “And, you know, some big players have not been there, so it’s going to be very interesting.” Mary Portas is the founder of Portas, a creative consultancy that explores the future of shopping and living. Guardian May 19
Last month the chief executive of Barclays said that there would be “a long-term adjustment to our location strategy” because of the pandemic. “The notion of putting 7,000 people [in the 32-storey HQ in Canary Wharf] may be a thing of the past.” And with that off-the-cuff remark Jes Staley gave voice to a doubt that is unnerving the entire commercial property sector.
There is now a realisation that some employers can function reasonably well with almost all their staff working from home. Add in the impact of social distancing that makes crowded workplaces impossible and employers, landlords, architects and valuers are having to confront the possibility that the maths has changed for ever.
“It’s a hot topic right now,” James Walker, of Colliers International, the property services group, said. “This is coming from the C-suite level. Over the next 12 months, all large corporations will be looking at how they occupy space.” That applies to the immediate future, as they consider how existing offices can be reconfigured, and to the longer term and how new buildings might be designed differently.
According to Colliers, 11.8 million people in Britain work at desks in offices, most of them packed relatively densely within open-plan spaces. Sixty per cent of those desks will be unusable while the 6ft rule remains in place. That means 7.8 million people will continue to have to work from home.
That’s even if they want to return to work, which many don’t. Colliers also found in a survey of 4,000 people working from home that 73 per cent of them thought that their productivity was the same or higher, while 76 per cent thought their work/life balance had improved. Eighty-one per cent wanted to carry on working from home for one day a week or more. Escaping the misery of commuting, for most people, appears to outweigh the social pleasure of gassing with colleagues by the coffee machine.
Twitter, the social media group, told its employees that they could continue working from home “forever” if they so wished.
Jason Sibthorpe, UK president at Avison Young, a property services firm, said: “I will be working from home more than ever — without a doubt on a permanent basis. I’ve spent the last 30 years setting my alarm for 5am and travelling to London and I don’t need to do that any more.”
Mark Allan, chief executive of Land Securities, says: “Whereas we may see fewer people in the office at the same time or working across a broader range of working hours, employers are likely to require more space.” So speaks the boss of one of Britain’s biggest office property owners, with a portfolio of £6 billion of office blocks and plans for two million sq ft of further space over the next two years.
Keith Froud, managing partner at Eversheds Sutherland, which employs 2,500 people in the UK from ten offices, said that the law firm planned to spend more money on technology and less on office space in future.
A lot of reconfiguration will be needed on existing buildings. Expect more screening, even a return to the glassed-in cubicles of the 1970s and 1980s. Daniel Hajjar, who leads the British business of HOK, an architectural firm, said that desks may be configured differently, not only with alternate desks being used but also with everyone facing in the same direction to reduce the risk of infection. Elevators would be a big pinch point, particularly in high-rise blocks. “You are going to end up with lines in the lobbies.”
Robert Duncan, real estate analyst at Numis Securities, said: “There will be some attrition round the edges, but we are a social species and the majority of office-based roles require some form of collaboration.” In other words, the office block is not dead yet — but it is going to look very different.
The cost of property per worker is going to rise sharply with more generous space requirements, unless rents take the strain. That reverses the trend of recent years. Employers have been able to reduce office costs per worker by cramming them in more tightly.
According to Panmure Gordon, the broker, 100 sq ft per person was once the norm; now workers in serviced offices make do with 30 sq ft to 40 sq ft.
That, in turn, could produce secondary effects, encouraging more employers to embrace working from home. Prime office space in the capital is already pricey. Each employee typically takes up space costing about £6,000 per year in the City of London and about £8,000 in the West End.
However, Capital Economics, the consultancy, thinks that the biggest impact on office property from the pandemic will not be the shift to working from home but the lasting effect from the huge surge in unemployment expected in the months ahead. While job losses may be most extreme in manufacturing and the hospitality industries, office workers will not be immune. The Times May 18
Richard Kauntze: The office will fade away only if workers think they’re better off at home — which they don’t. Independent research, commissioned by the British Council for Offices finds that just 20 per cent of UK workers plan to work mostly from home when normality returns. Most of us, it seems, appreciate the office.
For at least a decade seers have said that the office’s end is nigh. Yet the office has enjoyed a golden age. Tech companies have been well positioned to move to remote working. Instead they have led the way in office innovation, investing in ever more effective workplaces. Their decision to do so makes sense, and it explains why the office will remain popular.
These interactions happen in offices. At home we’re challenged by our children, our pets and our wifi connection — none of which drive great thinking.
However, offices will have to change. In the immediate term, changes will aim to reduce virus transmission and mirror government guidelines. Working from home will become more common, but it won’t be predominant.
In the longer term, offices may have to do more to remain valued. Workplaces must become more environmentally friendly. They must also tap into a renewed community spirit, hosting local events and giving space to hard-hit independent shops and restaurants.
The office will change, but it won’t go away. Why? Because so many of us want to be in one. Richard Kauntze is chief executive of the British Council for Offices The Times May 18
The coronavirus crisis means that packed public transport systems cannot run at full capacity. If people turn to private cars en masse it will lead to gridlock, economic meltdown as deliveries get snarled up and a rise in dangerous air pollution – the last thing needed in the midst of a respiratory disease pandemic.
Will Norman, London’s walking and cycling commissioneer, and his boss at city hall, the London mayor, Sadiq Khan, have unveiled one of the most ambitious walking and cycling schemes of any city in the world, closing off large parts of central London to cars and vans to allow people to walk and cycle safely as the lockdown is eased.
It was the clearest sign yet in the UK that coronavirus has the potential to fundamentally reshape transport systems. And London is far from alone. In the past few weeks, thousands of miles of new bike lanes have been built in cities from Milan to Mexico City, huge swathes of residential streets in places from New York to Bogotá are being closed to traffic, and experts say the dominance of the car is being seriously challenged for the first time in decades.
“We have no choice,” said Norman. “This is not ideological opportunism. This is a necessity.”
Susan Kenyon, an academic who specialises in travel and behaviour change, said it was simplistic to assume that building more cycle lanes and closing off roads to traffic would, on its own, lead to long lasting changes in behaviour.
“For 100 years governments and industry have put cars and car use at the centre of our life and policy [decisions] and it will take a huge effort to unpick that.”
She said policymakers would need a more root and branch approach, challenging the assumption of mobility by encouraging home working, improving broadband access and “re-localising” services.
The idea of a 15-minute city – where everything you need is on or near your doorstep – has been championed by the Paris mayor, Anne Hidalgo, to help achieve an “ecological transformation” of French capital.
Dr Rachel Aldred, academic and transport expert at the University of Westminster, said that a combination of dedicated bike lanes, particularly along main roads and bus routes, a rollout of e-bikes and e-scooters, and networks of pedestrianised or semi-pedestrianised neighbourhoods could bring huge benefits not just to city centres but to more deprived neighbourhoods that had the most to gain.
“I can see a virtuous circle where if we get this right, in two years’ time, we will have more liveable neighbourhoods in our towns and cities.”
So far the government has backed an increase in active travel. New guidance was issued by the Department for Transport saying it expected councils to give more road space to cycling and walking.
Ministers also allocated £2bn for cycling and walking out of a previously announced £5bn that had been earmarked for cycling and buses. However, campaigners point out that these figures are still dwarfed by the £27bn road building budget.
Outside cities and towns, experts say a relatively small investment in buses – £3bn, according to Friends of the Earth – could make them free for everyone, transforming the transport options for rural areas.
Aldred said the advances in e-bikes could also have a huge impact for longer journeys in both cities and rural areas. “Suddenly journeys that were not realistic because of length for most people are now very doable,” she said.
For those who still need to make journeys by car, a relatively modest investment in charging infrastructure could see the UK follow in the footsteps of Norway, which has seen a revolution in electric car uptake in the past five years.
“For electric cars the technology is basically there – it’s a question of ensuring that those who need it have access, rather than electric cars being a minority middle-class status symbol,” said Aldred. “For short to medium-distance trips, though, many people should be able to use a bike or e-bike rather than a car or e-car, so infrastructure for bikes of all types – much cheaper, greener, and more efficient than e-cars – should be prioritised.”
As many as 6 million people in Britain fear losing their job within six months as the coronavirus outbreak causes the biggest economic shock in living memory, a study has warned.
As many as one in five people in a survey of 2,000 workers by Survation for the leftwing thinktank Centre for Labour and Social Studies (Class), said they were worried about losing their jobs, despite government efforts to cushion the blow using its wage subsidy scheme.
The survey found that 60% of workers are just three months or less away from defaulting on their rent or mortgage, suggesting the scheme has not stopped people feeling that they are perilously close to disaster.
The trades union-funded thinktank also found widespread public support for giving key workers, including NHS staff, care workers, shop workers and delivery drivers a pay rise. At the same time 69% of those polled supported taxing the wealthy more to help pay for the crisis.
Faiza Shaheen, director of Class, said: “Protecting workers now requires us looking past emergency measures to a recovery plan. Coronavirus has put society in an X-ray machine to reveal its structural weakness and is now magnifying existing inequalities.” Guardian May 18
Jamie Dimon, the billionaire chief executive of JP Morgan, said that the coronavirus pandemic must serve as a “wake-up call” to build a fairer society.
“It is my fervent hope that we use this crisis as a catalyst to rebuild an economy that creates and sustains opportunity for dramatically more people, especially those who have been left behind for too long,” he wrote in a memo issued ahead of his bank’s annual shareholder meeting.
“The last few months have laid bare the reality that, even before the pandemic hit, far too many people were living on the edge,” Dimon added.
This is not the first time that Dimon has criticized the system that built his $1.2bn fortune. Last year, when leftwing Vermont senator Bernie Sanders was leading in Democratic polls, he acknowledged the “flaws” in capitalism, but warned that socialism led to “stagnation, corruption and often worse”. Dimon has been tipped as a possible treasury secretary should Joe Biden be successful in his presidential bid.
“This crisis must serve as a wake-up call and a call to action for business and government to think, act and invest for the common good and confront the structural obstacles that have inhibited inclusive economic growth for years,” said Dimon. Guardian May 19