TREND SETTING: Shopping online has become the preferable form of shopping via courier delivery or click and collect. Photo supplied
  • Les Jones, a senior lecturer at Te Whare Wananga o Awanuiarangi, looks at the importance of the economic future of the Eastern Bay and how you exercise your behaviours in the future.
Les Jones

ALERT level three is upon us. The rigors of the full lockdown to save lives have been eased allowing us more freedom to possibly return to work, increase where we can shop, where we can exercise and whose bubbles we can now infiltrate. The level four lockdown though has changed some of our behaviours.

For example, we now rely on and use the internet as our major communication device via computers, tablets and mobile phones to contact others, to order goods and services, to work from home and to learn with.

Additionally, the lockdown has changed our spending behaviours by reducing our ability to spend our disposable dollars and has increased our quality time with family and cooking.

So, will we revert to our pre-lockdown lives or, will we continue these behavioural changes into level two and beyond?

Let’s take communications. From our bubbles we, like the kuia on Ohope Beach with her mobile phone held out in front obviously chatting to her mokopuna, have embraced various video-conferencing tools on our computers and mobile devices to regularly chat to our relatives and friends all over the rohe and beyond.

This behaviour will certainly continue and grow as the trend was already there, the lockdown has just given it a significant shove.

Turning to businesses. Will they now continue to prefer to conduct meetings internally with their teams and externally with clients and suppliers using video-conferencing tools, especially now that documents can be exchanged through many of these programmes and, if required, electronic signatures can be added?

They obviously will, given the savings in time, money and the continuing travel restrictions.

Will the doctor or practice nurse appointments continue via phone and video-conference?

Why not? We already book appointments and request medications online, plus, the video call function on mobile phones can be easily used to talk with the health professional and to show areas of concern, for example, itchy and inflamed skin.

Yes, there will be times when physical presence in the practice will be needed, but the initial screening can certainly be done virtually.

Think of the time saved. This behaviour, though not totally embedded, will continue.

As will digital delivery of tertiary education. But the discussion on this is for another time.

Let’s consider shopaholics. One digital newspaper headline last week exclaimed that shopaholics have only a few weeks to wait. But after six weeks of level four and three cold turkey, will the shopaholism have been embedded as onlinashopaholism?

Have we got so used to online ordering via courier delivery or click and collect that we actually prefer this form of shopping?

Certainly with supermarkets this trend will only increase suggesting that in the future we may have smaller more slimmed down supermarkets catering for people who want to quickly pick something up, with payment via their mobile phones.

Places where you get your coffee fix or lunch, are really social platforms so will certainly revert to face to face.

But, for many, online purchasing has become normalised with clothing, health and beauty products being most commonly purchased.

In directing such purchases locally the new initiative of a virtual mall is to be applauded.

Come level two, retail shops will be open, but will people spend time browsing in them?

Evidence from countries more impacted by pandemics in the past suggests that people initially prefer not to spend time in shops browsing, as they have done in the past.

If this concern for social distancing occurs here, and it is more likely with older persons, then alternate ways to encourage shoppers into stores, or adopting a blend of online and bricks and mortar coupled with artificial intelligence (AI) should be considered.

We may possibly see, special shopping times for certain customers, wider isles between displays, limiting stock to see, pay and despatch and using the online to segue people into the store, digital mirrors being an example.

Therefore, expect to see changes in consumer buying patterns in the future.

But, will people return to their pre-lockdown spending patterns?
With more businesses becoming available, will we feel motivated to spend up as the yang to the ying of the lockdown?

Of course we will. Coffee and takeaways. Thus there will be a spike in consumer spending as a salve to the austerity of the lockdown.

A spike, for economists believe that this increased spend will not last. Our pent-up needs being satisfied, reality may then set in. Why is this? In a word, uncertainty.

For some people there will be the uncertainty of ongoing employment with the consequent uncertainty over future incomes.

For them, the need to conserve their funds for the essentials is paramount resulting in a reduction in their discretionary spending.

Add the retirees who are traditionally conservative and, with reduced investment incomes, may equally wish to conserve their funds. Evidence suggests that this reduction in discretionary spending principally impacts the hospitality sector, our bars, clubs and cafes which have already been financially hurt by the lockdown.

Unfortunately, an increase in unemployment is inevitable as evidenced by the 33,000 job seeker applications nationally through the four weeks of lockdown (Robson, S, Radio NZ, April 25, 2020) taking the percentage of work age persons on this programme to 5.8 percent, a percentage expected to peak at about 9 percent nationally by October this year.

The potential drivers of this increase in unemployment being, businesses that were marginal prior to the lockdown deciding to close, businesses deciding to operate on reduced staff numbers while they are providing only limited services or, until future demand is known, some businesses may shed staff once the 12-week wage compensation payments end and some may consider employing new technologies that impact staffing levels.

Our region has traditionally seen higher than average unemployed numbers so we may see local unemployment at 10-11 percent, but I do not think so.

Our area has a high number of essential businesses, the mills, factories, forestry, agriculture, horticulture, education and Government services, all of which also require other services, for example, of tradespeople and retailers. These will help cushion our local economy. However, expect unemployment to rise especially in hospitality and tourism and among part-time employees.

Businesses crave certainty, but are faced with uncertainty. Hence, as the ASB found, 61 percent of surveyed firms expect the economy to contract (ASB, Economic Weekly, April 28, 2020). This is evidenced by the reduction in job advertising which fell 7.7 percent in February then 29.4 percent in March (BNZ Economy Watch, April 2020).

Traditionally in this situation businesses retrench. They reduce their variable costs for example, staff, advertising and stock, the latter impacting their supply chains. But some local businesses which were marginal prior to the lockdown, or, are facing the L curve (will not achieve break-even for some time in the future) will not survive, while others will see gaps in the market from which they can drive a competitive advantage.

The business scene will change over the coming year, as I have noted previously, and become more agile.

Will the physical office be changed given our time working from home and the need for social distancing?

Desks can no longer be close together and hot desks may be a thing of the past, given health and safety requirements, which has led office designers to question if the popular open office design will survive. As a consequence, some business owners in Aotearoa New Zealand and in Europe have indicated that they will downsize their physical office space.

This coupled with distancing within that office space suggests change, possibly with a small core of staff working in the office space with other staff rostered into that space one-to-two days a week while other staff work continually from home.

On the other hand, some firms, like the National Business Review, have decided to keep all staff working from home and have put their offices up for sub-lease (Grieve, D, The Spinoff, 30 April 2020).

Be prepared for an increase in working from home in the future as it is expected that more than 30 percent of employees worldwide will be doing this by 2030.

Yes, some of our changed behaviours are now embedded so will continue into the future, others will revert.

What is important to the economic future of the Eastern Bay though, is how you exercise your behaviours in the future.

Directing spending behaviours locally leads to a prosperous local economy. Is that what you want?

Your choice.