Life after Covid-19: Working from home – winners & losers
This is the second part of Oban’s three-part blog series on working from home. Part One of the series looked at the effect large-scale homeworking may have on towns and cities, where we choose to live and work, and the real estate sectors. Today, in Part Two, we look at the impact WFH may have on other sectors – who wins and who loses? Read on to find out.
In March, UK fashion sales declined 34% YoY, and it was a similar story in other markets. As Next’s Chief Executive Simon Wolfson noted, “No-one wants to buy clothes to sit at home in.”
Most workplaces have dress codes which, even if informal, set various expectations of clothing and therefore inform fashion purchases. During lockdown, office workers joked about trading business trousers for sweatpants and jackets for hoodies that they would normally only allow family or close friends to see. We also saw the phenomenon of people wearing business attire from the waist up and casual clothing from the waist down for video calls.
In future, perhaps we will see “Working from Home-wear” become a new category on fashion e-commerce sites – clothing specifically aimed at remote working or virtual meetings. In China, post the initial phase of Covid-19 earlier this year, booming Taobao Livestream shopping added comfortable clothing to their range. In India, Flipkart-owned fashion marketplace Myntra is engaging users by suggesting light-coloured shirts for client video calls, colourful blazers for key video conferences and comfort essentials such as t-shirts, hoodies and jogging suits to work in at home.
One recent study suggested that 90% of women go make-up free when working from home. So increased homeworking could accelerate the trend to use less make-up, already in evidence for the last couple of years. Beauty brands would face headwinds as a result.
Travel is predicted to be one of the biggest victims of coronavirus. (Download our sector briefing on the future of travel here.) Working from home, combined with an increased focus on climate change and reducing non-essential travel, means significant reductions in business travel in the years ahead. It is difficult to imagine companies signing off on expensive business trips when it is easy to jump on a video conference. Whilst business travel for necessary meetings will likely endure, the definition of a “necessary meeting” will evolve. A running gag at the start of lockdowns was “now we’ll find out which meetings really could have been an email”.
With the upcoming economic downturn, many businesses will be looking to cut costs and travel is an easy place to start. It is far more palatable for companies to reduce their travel budgets than to make people redundant.
A major decline in corporate travel would have huge implications for airlines, hotels, and rental-car companies. Airlines have predicted it could take years for business travel to recover to pre-Covid-19 levels, though a vaccine could bolster confidence.
Business-class passengers typically account for 12% of an airline’s passengers but are at least twice as profitable as economy class passengers. On some routes, business class can account for 75% of the airline’s profit. Ominously Warren Buffet – who famously said, “be greedy when the market is fearful, and fearful when the market is greedy” – has just sold his entire $4 billion shareholding in airlines.
The biggest winner from working from home will be technology brands. Notably, video conferencing apps – in April, Zoom reported 300 million daily meeting participants, up from 10 million daily in December 2019 – a thirtyfold increase in just four months.
Homeworking will accelerate the digital transformation of industries. Demand for cloud-based solutions that enable a more seamless homeworking experience will increase, along with any technology which makes it easier for homeworkers to collaborate via online meetings, team messaging, video, and voice.
As more people work at home, it is easier for cybercriminals to break into computer systems, representing a security threat for companies. So we can expect to see more emphasis on cybersecurity solutions from companies such as Kaspersky and others.
There has also been a surge in video and online gaming since the crisis. We can expect this to continue. By homeworking, people are not commuting so they have more free time. US video game sales hit their highest level in over a decade in March, and gaming industry giants across the board have all reported major increases in user numbers.
With people advised to use public transport as little as possible and to avoid rush hour where they can, those who are returning to the office are seeking alternative modes of travel.
Walkers are likely to require decent walking shoes or trainers and weather-appropriate clothing and accessories – whether Burberry raincoats in some markets or Ray-Ban sunglasses in others. They could also shift away from briefcases and handbags to backpacks and cross-body bags designed for USB chargers and water bottles.
If you live a little further out, bicycles are seeing a resurgence with waiting lists until 2021 for some models. Electric bikes and scooter sales will also increase as commuters aim to avoid crowds and high parking charges. Already many offices offer bike safes and scooter charging points, rather than conventional parking spaces.
Oban can help
This is the second part in Oban’s three-part blog series on working from home. To read the first part which explores how large-scale homeworking will affect where people choose to live and work, click here. To read the third part, which explores how working from home varies around the world, click here. In the meantime, to find out how an international growth agency like Oban can help you navigate the new normal, please get in touch.
Sarah Jennings | CEO
Oban International is the digital marketing agency specialising in international expansion. Our LIME (Local In-Market Expert) Network provides up to date cultural input and insights from over 80 markets around the world, helping clients realise the best marketing opportunities and avoid the costliest mistakes.