This article addresses how others, including large companies and wealthy individuals, have fared very well and hopefully shares what we can learn from their success---and what it means for the future.
I have always been fascinated by how certain individuals and organizations succeed in the face of adversity. In a past Herman Trend Alerts, I have talked about how some small businesses and solopreneurs have reinvented themselves to capitalize on our Pandemic circumstances.
Big Companies have benefited
Many major corporations, including the tech giants, and global market investors have seen staggering profits during this pandemic. Meanwhile, there have been devastating effects on major segments of the economy, notably restaurants and Mom and Pop businesses.
The value of Apple's stock has increased by 133 percent in the last 11 months, while Amazon's share price climbed by 70 percent. Lock downs and quarantines contributed in a big way to the exponential success of online shopping and the delivery services required to get the goods to citizens who were stuck at home.
The Super Rich got Richer
Wall Street shareholders in the US and investors around the world cashed in on the tremendous market gains. In the United States, the net worth of the 659 billionaires increased by more than USD $1 trillion.
Jeff Bezos of Amazon, Mark Zuckerberg of Facebook, Bill Gates of Microsoft, and French luxury goods magnate Bernard Arnault of Louis Vuitton Moet Hennessy all saw their fortunes multiply to many more billions. And of course, no listing of billionaires would be complete without Elon Musk of Tesla and SpaceX who saw his net worth grow faster than any other person in recorded history; Musk's holdings as of this writing are valued at over USD $188.2 billion.
And the Poor got Poorer
With more than 400,000 small businesses in the US having closed forever, it is not surprising that only 12 million of the 22 million lost last year have been recovered. Economists have predicted a "K-shaped" recovery, with the rich becoming richer, and the poor getting poorer. As governments in European and other developed countries have stepped in to help small businesses, the US government needs to help out the engine that fuels most job growth, the small- and medium-size businesses.
E-commerce had a big payday
As requested, many of us have stayed home to protect our relatives with pre-existing conditions and to minimize the spread of infection. Life at home has been a distinct advantage for online retailers including Amazon, Target, Walmart, and Best Buy. Another segment that has thrived is the food delivery services like DoorDash, GrubHub, and UberEats that connected restaurants offering take-out with people who did not want to cook.
Additionally, we saw the advent of new streaming services like Peacock, HBO Max and Disney Plus, while Netflix continued to grow in popularity. Plus, video games were another area of consumer spending.
Home-centric spending has expanded
Many homeowners unable to spend money on restaurants and travel, instead found things to buy at Home Depot and Lowe's for home-improvement projects. According to Clicksuasion, one of the six market trends to watch in 2021 is Home-Centric Spending. (Next week, I will focus on their entire study, sharing some thought-provoking insights.)
Home has become not only our living space, but also, our workspace, our exercise space, and our play space in ways that we never thought it would. Thus, it is not surprising that we are investing in our properties and naturally, that is rocketing the outlooks for the home improvement retailers.
Drive-throughs are doing well
Restaurant chains, like McDonald's and Popeye's, that have traditionally offered drive-through and takeout service, are thriving, Local restaurants that pivoted to curbside pickup have also been able to keep their doors open.
When millions of us needed to do business from home, communications services like Zoom and Slack hit the jackpot. And there is no end in sight for their growth, since many of us will continue to work from home for the foreseeable future.
Not much trickle-down
In spite of record profits, The Washington Post found that 27 of 50 top publicly traded firms laid off employees. Collectively, they cut more than 100,000 workers, while they paid out billions of dollars to their investors. The problem is that there is a major disconnect between the people who are available to fill the jobs and the jobs that employers need to fill.
My colleague Edward Gordon is chronicling that disconnect in his latest work Job Shock: Solving the Pandemic and 2030 Employment Meltdown. You can also see this research in his Gordon Report webinars, hosted by my podcast cohost Ira Wolfe. (In case you didn't know, I am cohosting a weekly podcast, called Geeks, Geezers and Googlization.)
A Bright Future for Some
For big corporations and market investors, the future is bright. The recovery is expected to be similar to the one that followed the 2008 crisis. At that time, the large banks and private-equity firms bought destabilized competitors at ridiculous prices; from 2009 to 2012, the top 1 percent of earners took in 95 percent of income gains made.
To survive and thrive, small and medium-size businesses will need to be creative, innovative, and very strategic; they must remain lean and agile and be ready to pivot quickly to capitalize on emerging opportunities. Otherwise, they will simply not be able to compete.
© Copyright 1998-2021 by The Herman Group of Companies, Inc., all rights reserved. From 'The Herman Trend Alert,' by Joyce Gioia, Strategic Business Futurist. (800) 227-3566 or www.hermangroup.com
The Herman Trend Alert is a trademark of The Herman Group of Companies, Inc. Reprinted with permission.