Working From Home Means More Than No Commute
(Bloomberg Opinion) -- The arrival of the pandemic forced retailers and consumer brands to spend much of 2020 solving immediate problems. Many had to take urgent steps to protect their liquidity. Some had to hire thousands of workers to support booming demand. Others had to figure out how to get toilet paper on shelves, even if it meant buying it from a hotel chain.
Now, almost a year later, consumer companies must start reshaping themselves for the long-term effects of the public health crisis. In particular, they must adapt to the reality that the pre-Covid ritual of nine-to-five workers going to the office each Monday through Friday is probably never going to resume in full force. Even if many Americans only make adjustments around the edges of their schedules – say, working from home once a week – it has wide-ranging consequences for what people buy and how they buy it.
And there are other ways that people spending more of their days at home will leave a mark. Furniture and appliances may experience more wear and tear, potentially speeding up the replacement cycles for these items – or leading people to trade up to pricier products as they seek the most durable versions. Retailers from Lowe’s Cos. to Bed Bath & Beyond Inc. could be affected by this dynamic and would do well to plan their supply-chain development and growth plans with this shift in mind.
Even that, though, is just scratching the surface of how widespread telework will change shopping habits. Fewer commutes will scramble consumer mobility patterns, which determine in large part how people spend their money. Fitness centers – including those of chains Town Sports International and Flywheel Sports, which filed for bankruptcy during the pandemic – are often close to where people work, not where they live. Restaurants such as Starbucks Corp. and Shake Shack Inc. may have to grapple with the reality that highly productive urban locations get a bit less foot traffic than before. Drugstores that used to serve commuters in nearby offices will likely see some “fill-in trips” disappear for good. Stores and restaurant chains should keep this in mind when deciding on locations and estimating how much traffic they’ll get.
And here’s another thing: One of the key pain points of e-commerce is the possibility that you won’t be home to accept the delivery, leaving items vulnerable to porch pirates. Working from home might give people more flexibility to receive deliveries and thus give them added incentive to shift even more of their spending online.
Less working in offices doesn’t mean it will be a stay-at-home future. People want to resume gatherings and vacations, so as vaccines are distributed more widely, sales of certain products should snap back relatively quickly. Plenty of companies have suffered because of a particular aspect of social distancing: The social part. I expect that trendy clothier Revolve Group Inc., for one, will see momentum when music festivals and cocktail parties are back. Party City will likely see a burst in demand for supplies for birthday bashes and bridal showers.
But when it comes to the daily grind, workers don’t want to go back to the rigid schedules and commuting hellscapes that ruled their lives before, and employers have good reasons – from attracting and retaining talent to saving on rent – to accommodate them. Brands and stores need to do the same.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.
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