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What I see happening in the next 3-6 months...


Unprecedented uncertainty. The biggest story of our generation. We are seeing an acceleration of trends that were already occurring. Some companies will make bold bets. We end up with a new normal. The world will be better in the long run, though bumpy as we go. Here is my quick take. Maybe we call this The Great Pause of 2020. Stay safe and continue to social distance. 


Industries that may need government bailouts and/or change fundamentally 

  • Hotels -- do we travel too much, especially for work? Do hotels become used for other purposes, like NBA team moving in to one?  Airbnb and VRBO are in better shape because they do not own the physical spaces but they are middleman; listen to the Marriott CEO as he talks about the current trends Business Update

  • Airlines – do they become nationalized? Are there more mergers? If travel goes down do prices rise substantially? On April 1, 136K people flew in the US vs 2.1M the year prior 

  • Restaurants – goodbye TGI Friday’s and Olive Garden, others like McDonald’s, Chipotle and Sweetgreen move to delivery and curbside pickup service; the restaurant industry is 4% of GDP; much easier if you have a car less contact and food goes right in the trunk 

  • Malls – they were almost dead, this is probably the end as we know them 

  • Movie Theaters – AMC now has no revenue, also changes the way studios release movies, drive ins may come back?

  • Retail Clothing – moving more and more to e-commerce vs. in store purchases, in store may a more personal and clean shopping experience 

  • Trade Shows/Industry Events -- are they really necessary or just a big boondoggle? Do they need to evolve and have new services like white glove introductions to the 10 people you really want to meet?

  • Luxury Goods -- clothing, handbags, etc. are not as important anymore as we all work from home, seems a tad frivolous under these circumstances 

  • Real Estate/Construction – no new non-essential construction, home prices may decrease in large cities as some people move out, just like we saw post 9/11 in NYC; do companies now need 80% of the space they needed before? 

  • Small Businesses -- let’s hope the $350B stimulus works, small businesses really drive the economy  

Industries that thrive, the essentials 

  • Pharma – becomes the new tech as they look for a vaccine, better testing and then ramp up for the next pandemic  

  • Technology -- need to connect with people while at home: Zoom, laptops, phones, the internet

  • CPG – moves to a DTC model for certain essential categories like soap, deodorant, cleaning products, toilet paper, hand sanitizer, masks, etc.

  • Grocery-- we still need the food and workers need to be safer, Walmart is leading Additional Steps We're Taking for the Health and Safety of Our Associates

  • Healthcare -- especially hospitals, the new heroes  

  • Live Sports -- will be reinvented and be stronger than ever, maybe more esports and much more gambling, perhaps we start to play games without fans in smaller arenas like high school gyms?  

  • Streaming Television – the 2020’s become the decade of great content, the best entertainment bargain in the world, you pay under $15 a month for $8B in content created by Netflix; may have a dip in 2020/21 as production has slowed down, podcasts also drop since we commute less. Peacock, HBO Max and Quibi all launching very soon, probably bad timing, unlike Disney + that had great timing  

  • Dating -- how do we date going forward, more virtual?

  • Farming -- we all need food, especially locally produced 

  • Gaming -- Xbox and PlayStation will thrive with downloadable games and social interactions 

  • Local Tourism -- new vacation is a 2-4 hour drive away, not a flight 

  • DTC Home Improvement -- have more time to fix your house, the house that you spend more time in, Wayfair leads the way 

  • Mental Health -- hard to be coped up for months 

  • Food Delivery -- Blue Apron, Seamless, Postmates, Uber Eats, etc. though call your local spot and order directly to avoid the middleman 

  • Cyber Security -- especially as work from home becomes more commonplace 

  • DIY Beauty -- a bit of luxury like shampoo, skin care and, most importantly hair coloring 

  • Online Education -- online education really needs a reboot, now is the time for innovation 

Industries that do just fine

  • Insurance – still need to protect the car we drive and house/apartment we live in, new insurance vehicles emerge. Many claims will be processed using photos going forward, maybe premiums get returned since we are all driving less?  

  • Automotive -- no one is buying a car immediately, will come back soon, especially as leases expire, auto is one of the largest advertising categories and publishers need their spend, tier 2 and tier 3 has stopped spending as most auto dealerships are closed

  • Banking/Mortgages – with new rules in place; mobile banking grows, applications that don't need in person conversations emerge  

  • Large Advertising Businesses -- those that have the wherewithal to last for the next 3-6 months until things get better 

Most important companies in the world

  • Internet providers and phone companies as they continue to build out infrastructure and support us all being at home 

  • Amazon, who will deliver everything to your front door, will try to move to drone delivery

  • Netflix and Disney+ still the best values for hours of entertainment provided 

  • All pharma companies and the scientists who work there, doctors/scientists become the next Zuck and Bezos, like Alex Gorsky CEO of J&J -- Johnson & Johnson Announces a Lead Vaccine Candidate for COVID-19

  • The local food stores and restaurants where you buy your essentials while staying home 

  • Electricity to keep our TV, phones and computers going 

 Marketing in this new world 

  • Don't provoke demand you cannot fill, toilet paper, antibacterial wipes, paper towels, etc. 

  • Brands and marketers are still trying to figure out what to do as they start to make appropriate creatives and be incredibly sensitive 

  • Traditional retailers like J. Crew or West Elm suspended all marketing and use their CRM email to inundate us with too many messages 

  • Creativity blossoms 

  • Small business advertisers via Google and Facebook stopped marketing first 

  • Some bold marketers might realize this is the best time to take share 

  • CFO wants to cut and conserve cash, and CMO says build the brand 

  • If you are marketer of an essential service make sure you are employees are taken care of

  • Find a way to be helpful and relevant in the moment; don’t pretend the moment does not exist

  • Brands need to provide comfort and leadership, we are going to work together and get through this 

  • There will be consolidation among holding companies

  • Do not shut off spending on programmatic display or social, these campaigns use algorithms to learn which audiences are most responsive

  • Digital feels everything first because it’s so easy to pause campaigns

  • Google and Facebook’s revenue will be down 20 to 30% in Q2/Q3 and rebound in Q4. Amazon advertising is less affected once they figure the supply chain 

  • Does the TV upfront change post Covid-19? Not so good for marketers who are locked in for a 12-month period 

  • An increased move to self-serve 

  • Advertisers may cancel direct deals and go more programmatic, Direct is hard now, especially those campaigns that need integration. Hard to pause Direct deals and can’t easily optimize Direct on the fly 

Technology in the new world 

  • Bill Gates is beyond brilliant, watch this video from 2015 Bill Gates: The next outbreak? We're not ready

  • Thank god for the Internet, an incredibly robust and resilient network that is designed to adapt to huge spikes in traffic just like the one we are living through 

  • TVs will start to have cameras and microphones, better Zoom experience for communicating with family and friends  

  • Touchscreens move to voice operated, maybe they are Siri or Alexa enabled?   

  • Elon Musk does something amazing in health tech 

  • Amazon accounts for nearly 40% of e-commerce sales in the US pre-pandemic, I assume that goes up 

  • TikTok usage rises as everyone stays at home and needs quick, and upbeat, entertainment bites

  • Government officials across the U.S. are using location data cellphones to better understand the movements of Americans during the coronavirus pandemic 

  • Will Netflix raise prices? That would be a bold move 

  • Temperature checks become common with Walmart leading the way 

  • Travel is ONLY with a doctor’s note and requires a temperature check at the airport 

  • Public companies like Google and Facebook will begin at-home temperature checks for all employees, this will then be commonplace in a decade 

  • 5G is fast tracked in the US and as a result, we all need new smartphones

Companies in the new world 

  • Companies with significant cash on the balance sheet look brilliant, and the most important KPI is cash in the bank Microsoft, Apple, Alphabet top list of companies with most cash on hand

  • Boring companies (e.g., GE, GM, 3M, Chase, P&G, Honeywell, Wal-Mart, United Health, etc.) might be better place for college graduates 

  • We will see many great businesses starting once this is over, cheap cost of capital and people more open to innovation

  • Businesses have the cover to make big decisions and take a hit to earnings -- time to make some bold bets 

  • Might get harder for middle men, just taking margin from the real creator of value -- Priceline, Expedia, Hotels.com come to mind, though middleman like Google and Amazon are adding a ton of value to the ecosystem 

  • The next Apple iPhone and Apple Watch have a thermometer 

  • As capital dries up, only the most promising companies get funded, probably not good 

  • DTC juggernaut is over, old stable CPG companies like P&G and Unilever have the cash and infrastructure to survive  

  • Many large companies hire a Chief Epidemiologist Officer and Head of Pandemic Strategy; colleges starts programs for this new major 

Food, clothing and travel in the new world 

  • Some people get healthier while at home, not eating fast food while others consume way too much unhealthy packaged products and get the quarantine 15

  • Cooking at home becomes the new normal

  • Cruises start catering to millennials, not octogenarians, less threat of a virus spreading  

  • Vacations are now by car not plane, local, not international

  • Jeans and sweatshirts are the new work attire, though I like wearing my sweaters 

  • Everyone goes for walks, lots of walks, 20K steps a day is the goal 

  • With no traveling and working from home, air quality is improving across the world -- https://waqi.info/#/c/0.051/33.157/2.6z

  • Love that grocery stores now have senior hours, hopefully that stays forever

  • No one buys new clothes, maybe some shirts for that big Zoom meeting 

  • People pick places to live based on the amount of hospital beds per capita

  • I think the NY Transit system (MTA Subway, Path, NJT, LIRR and Metro North) was the biggest cause of the rapid spread across NY metro area and I HOPE that NY peaks the week of April 6 

Other stuff I have been pondering 

  • We need better home schooling/education system

  • Four year college program may be over, not worth the squeeze anymore; wait till the last minute to pay tuition for Fall 2020 

  • The elderly are/the nation’s treasure

  • Does the US birth rate decreases and divorce rates increase? 

  • Local news will emerge nicely, though let's hope the revenue flows to them  

  • Working and living in the same environment is complicated, we were not ready

  • The elbow bump lasted a week

  • It’s a good time to have a dog and a dishwasher 

  • Facebook and Google both realize they are publishers and not just tech platforms

  • We’re all building new muscles of how to work differently, do they stay? 

  • Diversify, don't be 100% in stocks, good to have a financial planning professional you can talk to in times of need 

  • We need an early warning system to be better prepared for the next pandemic the US health weather map -- https://healthweather.us/ or google --- https://www.nytimes.com/2020/04/05/opinion/coronavirus-google-searches.html

  • Truck drivers, workers at essential businesses. Teachers are really stepping up as well 

  • Doctors and nurses are the REAL HEROES  

========================================================================

Thank the people who have influenced your career. Better yet, give them a call and check in.  Here is my list -- Robert F, Alex F, Gerry L, Tom A, Ann S, Bob B, Kris B, Dan S, Taran S, Alan I, Curt V, Larry A, Dave M, Chris P, Warren L, Mark P, Mike S, Mark H, Dan B, Rich C, Greg B, Tatyana Z, Andy E, Craig K and Eric A.  


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-msg (Independent Analyst/Advisor/Consultant)

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