Sunday, April 12, 2020

The upcoming train of pent-up demand



                                         [Railroad track with clouds in the distance*]

Worldwide, the corona virus has shut down almost all businesses, big and small, and hit the income of almost workers, salaried and independent. In regards to the day after, when social and business activity is allowed to fully restart, the latter group, the independents, are especially worried. While it is difficult to accurately predict the future, one concept seems relevant in regards to forecast for the short-term future: pent up demand. It is clear that certain professionals will be extremely busy for months to come.

Accountants, doctors and attorneys always finds a way to profit. Given the need to take advantage of the various government support programs and their complexity, accountants will be quite busy and even gain new customers. Their cousins, the financial service providers, will be active helping people manage their debt and get into more debt. On the medical side, the stress of these months on everybody, not just healty care workers, will be boom of those doctors that treat the effects of it, including dermotologists, alergists, cardiologists, dentists, psychologists and psychiatrists, as if their clientelle was not large enough already. However, the lawyers will enjoy the greatest boom. Whether handing divorce, estates, breach of contract or payment issues, the courts are going to be busy. Jewish mothers knew something when they wanted their children to enter these professions.

The busiest service providers, at least in the short term, will be in the beauty care industry. Tens of millions of women will not have had a proper heart cut, dyeing, manicure, pedicure, injection or skin treatment for months. To clarify, I do not state that in derision but in appreciation of their need and its impact on those that provide this service. In fact, it is possible that these businesses will more than make up for the lost income. I also expect to prices to rise in these industries as many women will not want to wait an additional month for an appointment.

To misapply Newton’s 3rd law of motion, every action has an equal but opposite action. After several months of no serious physical exercise or social activity, people are going to go extreme on sport and going out. The gyms, sports centres and country clubs are going to be jammed the minute such activity is considered safe. Many people will feel the absolute requirement to lose the kilos (or pounds) that they gained while stuck at home. It is unclear how long these people will maintain their enthusiasm but demand for such services will be initialy very strong. Cafes, bars and sports stadiums will be also be packed. These places represent the polar opposite of being stuck at home: lots of noise, talk, non-family and vicarious pleasure. The coffee or beer may the same but everything else is different. Vive la difference! Flights probably will  be packed as people travel to see their “long-lost” loved ones. Any professional involved this social approaching will gain.

Time will tell if how correct these predictions are. Clearly, for some independents, the return to the “good old days” before the corona device will take time, possibly years.  For others, the shutdown period will be an unpleasant but short hickup in their business development, even a shot in the arm. It is the challenge of independents to figure the route of the recovery train and somehow catch it.



* For the sake of the millions of blind, always post a description of your picture.
Image by <a href="https://pixabay.com/users/Larisa-K-1107275/?utm_source=link-attribution&amp;utm_medium=referral&amp;utm_campaign=image&amp;utm_content=163518">Larisa Koshkina</a> from <a href="https://pixabay.com/?utm_source=link-attribution&amp;utm_medium=referral&amp;utm_campaign=image&amp;utm_content=163518">Pixabay</a>

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