What else is Covid-19 going to kill

There is the direct impact Covid-19 has on the lives of people, but there is also an indirect impact with the lockdown and changing consumer behaviors, that is likely to kill a few things that were ubiquitous in our lives before the pandemic.

I’ve identified 10 of them:

Office spaces | Urbanization | Currency | Capitalism | Meat | Provenance | Customer service (Miles) | Fast Fashion | Restaurants | Religion 

Here’s why I think these will die:

Office Spaces

While the hypothesis around this is obvious, there is increasing evidence that suggests this will be a reality for many of us. WeWork, the most popular example of a firm dedicated to office spaces, has lost almost 90% of value from its peak.

This is now a reality. Houses will be sold as xBHK+Study. Conference venues and Starbucks will be where teams congregate. Professional life as we know it will persist sans office spaces.

Urbanization

As a direct offshoot of office spaces disappearing, urbanization will also reverse. If you could stay near a beach in Goa or a hill station like Lonavala, from where you can get to Bombay in an hour by either flight or road respectively for the occasional meeting, why would you not choose that for a better standard of living!

The romance of city life only exists when you are young and have friends to meet with every evening. As you get older, and especially with kids, that backyard and clean air can be a lot more inviting. With a certain demography moving out of cities now, the net impact of cities growing (so called urbanization) may no longer continue.

Currency

Currency as we know it has traveled from the barter system, to gold pegging, to government validated bills. Some years back, private institutions like Bitcoin tried creating their own currency, and big firms like Facebook with Libra followed suit.

But they faced a lot of challenges. Wild price fluctuations, lack of acceptability across payment platforms, and legitimacy in the eyes of governments and regulators.

All this will now change with China bringing in E-RMB. The Chinese government has spent the last 5 years preparing the groundwork for this, and the pandemic is probably their best opportunity to offset the dollar as dominant global currency.

Therefore, currency as we know it could likely die, giving rise to the government validated digital crypto-currencies.

Capitalism

Capitalism in its purest form only existed in Ayn Rand’s Altas Shrugged. In reality, all countries fall somewhere in between the spectrum with capitalism at one end and socialism on the other.

With the pandemic, more countries are likely to deviate further towards socialism. Even America, which is closest towards capitalism had been lauding Europe for their work on healthcare and data privacy management even before the pandemic.

President Trumps incompetence notwithstanding, it is likely that even USA will follow other nations to embrace more socialistic principles that weigh heavier on topics like wellbeing and climate.

Capitalism existed to raise people out of poverty, and if you were to go by Hans Rosling’s Factfullness, the job is nearly done, and the what’s relevant today is not the second car, but better air to breathe for your children.

Meat

This pandemic has already killed some of the exotic meat industries, but even the regular meat we are familiar will be endangered, and here’s why:

• Perception – While there is no proven link between the pandemic and the consumption of meat, the very fact that the virus jumped from an animal to a human incites a deep seating discomfort with meat consumption. I’ve heard enough people from India asking me to avoid meat, and while India may be an outlier where driven by the principles of one dominant religion, meat is already frowned upon, it’s likely this exists in other parts of the world as well especially among the growing base of flexitarians.
• Health – The shift towards a vegan lifestyle was already considered healthy, and maintaining good health has become paramount with the pandemic. If there are still any doubts about the benefits of turning vegan, please take out just one hour of your life and watch Game Changers. It’s an eye opener that could change your life forever.
• Supply Chain – The supply chain in the meat industry has collapsed with the pandemic, because the industry faces close proximity work environments and quick turnaround times that are more severe compared to other industries, and this has led to thousands of pigs being culled in America last week, simply because there was no supply chain to link the existing supply and demand between the farmers and consumers there.

Provenance

Madagascan vanilla, Peruvian cacao, Ethiopian coffee, and the likes, are going to be killed by Covid-19. Consumers want local produce that are fresh and affordable, rather than ingredients that have come from an exotic destination that they probably didn’t even know existed until they saw it on a pack of ice cream.

Customer Service (Miles)

Cash is now the most important metric for corporations, and in this scenario, profit centers will supersede cost centers. Most corporations have a myopic view of the benefits of Customer Service, and have already started to eliminate them as cost centers.

If any of you have tried calling a hotel or airline or even a garment manufacturer of late, you would know what I am talking about.

However, the lack of customer service currently is ephemeral. What will be a permanent change with Covid-19 is the shift from humans to robots when it comes to all things CRM.

The friendly human that answered the call will be replaced by a chat bot. The one industry that will face the brunt of this will be airlines, simply because personal travel will be limited to home visits and domestic destinations, and corporate travel will reduce significantly.

The airline industry has already lost 50% of their valuation, which are estimated losses of $252 billion (read more below) and the few airlines that survive this pandemic are likely to terminate their miles programs.

Tough luck to those of us that had accumulated these. After losing Kingfisher miles, and then Jet Airways miles, I am now likely to lose all those KLM and British Airway miles in my possession.

Fast Fashion

Inditex – owner of fashion chains Zara, Massimo Dutti, and Berskha – reported revenue for February, March, and April that was 44% lower than the same time last year. Of course, 90% of its physical stores were closed during this period, and the 50% increase in online sales was insufficient to make up for it.

However, the impact of Covid-19 on Fast Fashion potentially goes beyond the current decline from the poster child of Fast Fashion, Zara. This is simply because of the lack of desire to change our wardrobe as often as Zara wants us to - who is there to see it! All of us are wearing shorts with shirts as we read this.

And this may not be an ephemeral trend. A combination of value consciousness and interim behavior change by the consumer, bottom line improvements for the retailer, and overall improvements to the environmental by denouncing Fast Fashion, may see the downfall of the concept of Fast Fashion.

Zara will still thrive, as they are just too big a brand in fashion retail, but they are likely to shift from Fast Fashion. Competitors like H&M have already struggled to keep up with Zara, and likely to forgo this as well.

Restaurants

Restaurants en masse will not die, but the vast middle of the road restaurants are not going to survive this.

People already perceive home cooked food to be healthy, and right now almost everyone has even become a master chef at home. So, the only reason to go out to restaurant will be to celebrate a very special occasion or to satisfy a hunger pang on-the-go.

Therefore, it would only be the fine dining outfits, and the QSRs for people on the move that will come out of this pandemic alive.

Religion

At last, religion has been taking a blow from science for a very long time now. With this pandemic, even religious institutions are asking science to save them.

The principles of religion are still important as they teach good morals, but the deification and the inane beliefs and practices that come packaged with religion will cease to exist.