With the United States apparently entering a new surge of COVID-19 cases, the prospects and timing of when consumers will embrace an economic recovery are likely to get a lot more muddled. While there have been pockets of strength like the surge in online shopping, the number of people and indicators still in distress is cause for concern. MerchantE Chief Financial Officer Shimon Steinmetz told Karen Webster in a recent conversation that to him, the tea leaves look mixed.
“If Airbnb refiles their IPO, which was expected right before the pandemic, that is a strong sign of a V-shaped recovery for most of America,” Steinmetz said. “There are still 20 million people without jobs, but [if that happens], that’s a strong sign of a tea leaf.”
Likewise, Steinmetz is also looking at things like generally good U.S. housing starts, home sales and mortgage applications as proof that consumers are gaining the confidence needed to restore a sense of normalcy.
“When you see a new high in home sales and people making the biggest investment of their lives by signing a 30-year mortgage, there’s a mental switch that went off in their head that it’s time to move forward,” he said.
The Pivot To Normalcy
To be sure, the pandemic’s effects have varied widely, whether that’s on an individual level or in terms of its outsized impact on certain businesses and industries. Steinmetz said that reality would impact how and when different consumers are ready to make their proverbial pivots back to normalcy.
However, he added that the broad-based embrace of new technologies has allowed us to do things we couldn’t have done some 10 years ago during the 2008-09 financial crisis.
“Technology has already aided in the recovery in the sense that it has enabled us to go into lockdown and start to come out of it with limited interruption to business communication,” Steinmetz said. By contrast, he said there was no ability in 2008 “to effectively — in 10 days — get our entire service economy working from home. It would have been a disaster.”
That said, businesses that are in a position to move forward still need to be sensitive to the fact that some of their customers might not be ready, Steinmetz said, noting the realities of some 210,000 U.S. COVID deaths and 20 million unemployed Americans. “The customer experience needs to engage that understanding of what the consumer is going through,” he said.
For example, Steinmetz said call centers need to be more proactive in providing solutions than six months ago when customer service reps would just follow a script.
“You have to be conscious of the environment and cater your behavior to embrace the reality of your customers, so they can become more endeared toward you,” he said.
Steinmetz also acknowledged the disparity of prospects that small and large businesses face.
On the one hand, industries such as airlines have assets and access to capital, so they have opportunities ahead. But on the flip side, there’s no restructuring or pivoting available to many small- to medium-sized businesses (SMBs) that are just trying to stop the bleeding.
“When revenue goes to zero, there’s just no customer experience when your customers stop coming in,” Steinmetz said.
What We Need Is A Vaccine
Steinmetz said a number of his friends have had COVID-19 and have been fortunate enough to recover. He’s been struck by the fact that their behavior returned to normalcy was quite fast, likely aided by their confidence and comfort in their post-infection immunity.
That’s why Steinmetz believes that once a COVID-19 vaccine is approved and widely available, consumers will return to their old ways.
“Once there’s a vaccine, I think behavior will follow pretty quickly,” he said. “You get that vaccine out and people’s behavior will change from the last eight months of caution to going back to normal life because they’re immune.”