Text messaging has been with us for a long time now. It’s only natural that its popularity would grow in tandem with the increased adoption of smartphones.
But as late as 2019, field studies conducted by research companies like Lunar and Twilio showed that email communications continued to be the preferred way for consumers to receive communications from businesses or sales personnel.
Of course, both text and email had already eclipsed voicemail in popularity long ago – not to mention hanging on the phone for minutes (or hours) at a time to interface with companies in real-time.
Then COVID came along — and with it came stay-at-home orders from governments and employers. Its impact on consumer communications behavior was huge. New research reveals that the majority of people surveyed have increased their cellphone usage since the onset of the coronavirus – in most cases dramatically so.
In fact, nine out of ten consumers surveyed now report that they prefer receiving text communications over email when it comes to interfacing with businesses — and such text messages are also more likely to be read than email communications.
Moreover, consumers prefer texting with customer support reps more than real-time phone calls. They expect quick and accurate responses to their text inquiries — and don’t seem particularly concerned about the “digital paper trail” that might be less easy to document and preserve with text messaging than with email.
This shift in attitudes is actually pretty intuitive: Texting with customer support personnel allows anyone with a mobile device to get answers and resolve issues quickly, without enduring long hold times and transfers. The shorter resolution times that texting can deliver also encourage brand trust.
Chalk it up as yet another trend that was already happening — but COVID’s given it a big boost.
This past February I ordered an 18,000 BTU window air conditioning unit through the local GE dealer in the town where I live. It’s the largest such window unit you can buy, and there aren’t very many alternative options available from competitors.
Not surprisingly, the particular unit I ordered is manufactured in China (I am not aware of any similar models that are made in the United States). At the time I placed my order, I was informed that due to COVID-related disruptions of global deliveries, the earliest I could expect my unit to be received and installed was in April.
I wasn’t very surprised at this news, and figured that the delay would be perfectly fine for getting the AC unit installed and working in our home before the onset of the notoriously hot and humid summer months where we live here on Maryland’s Eastern Shore.
Since then, we’ve had several more pushbacks in the anticipated product delivery – first June … then August. And now the latest schedule I’m being told is for an October delivery – and even that date is “iffy.”
I think my situation isn’t unusual in these COVID-crazy times. Considering that the pandemic began towards the end of 2020, we are now 20 months later and the ripple effects are still being felt all throughout the global movement of products.
In fact, the recent coronavirus outbreaks that have occurred in Chinese port cities just this past month have caused even greater shipping delays than what had been encountered during 2020; they’re actually the worst shipping delays seen in 20 years. It means that the impacts will likely be felt all the way to the holiday shopping season at the end of this year — at a minimum.
Among the myriad of products and supplies that have been seriously affected are:
Hospital, dental and surgical equipment/supplies
Printed circuit boards
Semiconductor processing equipment
… and these are just some of the most notable examples.
With the Delta variant apparently causing a COVID-pandemic redux, it’s pretty impossible to gauge just how long it will take to work through the product shortages that have with us for so long already.
But what’s quite clear is that all of the initial estimates were woefully off the mark … so why would we expect anything different now?
What sort of product shortages have you experienced in the past few months, “thanks” to COVID – either in your business or at home? Please share your experiences (surprisingly good or unsurprisingly bad) with other readers here.
Remote work has turned each new hire into a national competition.
Historically, one of the challenges faced by smaller urban markets was their ability to hang on to talent. Younger workers often found it more financially lucrative following their education to relocate to major metropolitan areas in order to snag higher paying positions with the companies based there.
In time, however, the high cost of living in the large metro markets, coupled with the desire to ditch the unbearable congestion in those areas, led to the formation of new businesses outside the major tech centers that found it easier to compete with the major urban areas for talent.
Established companies found the same dynamics at work, too. The rise of markets like Charlotte, Salt Lake City, Pittsburgh and Boise underscored that the spread of the “new economy” had migrated to places beyond the traditional hubs of Boston, Washington, New York City, San Francisco/Silicon Valley, Los Angeles and others.
Then the COVID pandemic came along. Suddenly, it didn’t matter where employees lived as companies quickly figured out ways to have, in some cases, nearly their entire workforce working remotely.
It didn’t take long for employees in some of the market hardest-hit by COVID to flee to far-flung regions. New York City residents moved to the Hudson River Valley, South Florida and other locations. For California residents it was off to Nevada, Montana or Idaho. Boston-based workers decamped for Vermont or Maine.
It soon became apparent that for many tech jobs, the need to be clustered together in offices simply wasn’t that critical. And in an ironic twist, smaller-city startups and other firms are now starting to feel the effects of the establishment biggies poaching their own employees.
It’s particularly ironic; whereas before, companies that couldn’t compete with Silicon Valley heavyweights on salary could offer a whole lot of lifestyle to even the playing field. Now they’re finding that “work from anywhere” policies have nullified whatever advantages they had.
Those big-city salaries can be used to purchase a lot of house in whatever kind of environment desired — even if it’s a lakeside cabin in the middle of nowhere.
It also means that, all of a sudden, everyone’s competing with companies all over the country for talent — and hanging on to the existing talent is that much more difficult. When people are being offered 20% higher salary with no requirement to relocate, that’s a proposition many people are going to consider.
Another interesting consequence is that tech labor force is probably geographically more evenly distributed than it’s ever been — and the workers residing outside the traditional tech hubs are benefiting accordingly — At least in the short-term.
In the longer term, companies based in the smaller markets hope that they’ll have access to those same new tech migrants if work-from-home policies change yet again. But that’s a big “if” …
Recently, it’s fallen behind even the USPS in on-time delivery performance.
The pandemic-fueled increase of online product ordering hasn’t let up in recent months. And the tale it tells is FedEx struggling to keep up with its rivals when it comes to on-time parcel deliveries.
The most recent statistics covering March through mid-April show a significant difference in delivery performance – 87% on-time deliveries for FedEx Ground shipments compared to 95% in the case of UPS. Those figures come from ShipMatrix, Inc., a company that tracks shipping and delivery performance.
According to The Wall Street Journal, the comparatively weak performance by FedEx elicited this anodyne statement from a company spokesperson:
“FedEx continues to experience a peak-like surge in package volume due to the explosive growth of e-commerce. As always, we are working closely with our customers to manage their volume and identify opportunities to help ensure the best possible service.”
… As if the other delivery companies aren’t facing the same dynamics regarding the growth in online ordering volume.
Delivery tracking software company Convey has released figures that are even more problematic for FedEx. In April, only around 70% of FedEx shipments were on-time, which means the company’s performance was weaker than UPS and even the U.S. Postal Service.
In response, FedEx claims that Convey’s data haven’t aligned with its own internal stats, but the company hasn’t released figures of its own to illustrate the difference.
At the same time, FedEx reports that it’s doubling down on plans to increase its network capacity, along with recruiting additional workers. Even so, it acknowledges that FedEx Ground capacity will continue to be constrained until the end of 2021.
Up to now, the unimpressive record on parcel deliveries hasn’t appeared to hurt FedEx’s financials, which recently hit their highest-ever monthly revenue and operating profit levels. The question is, can that performance hold long-term if businesses and their customers continue to experience slower deliveries? It isn’t as if there aren’t alternative suppliers in the parcel delivery business.
Have you experienced issues with FedEx’s delivery performance recently? If so, are they significant enough to make you open to considering alternative shippers? Please share your thoughts with other readers here.
Responses from two people in particular are worth highlighting for the “countervailing views” that they espouse. I think both have merit.
The first response came from my brother, Nelson Nones, who has lived and worked outside the United States for decades. His perspectives are interesting because, while fully understanding domestic events and policies, he also brings an international orientation to the discussion due to his own personal circumstances. Nelson is looking to history for his perspectives on the inflation issue, offering these comments:
The chart below shows annual U.S. CPI percentage change for the past 106 years:
Projecting the latest (April 2021) Consumer Price Index forward to an entire year suggests that the U.S. will experience a 3.1% inflation rate in 2021. That would be higher than in any year since 2011, which was a bounce-back year following the Great Recession. Otherwise, the generic inflation trend has been consistently down since 1982 (nearly 40 years).
If the historical trends are any guide, and if we are indeed entering a persistent inflationary phase, it would take another decade before inflation growth approaches the levels seen during the 1970s.
But I think the likeliest scenario is experiencing a sharp uptick this year due to pent-up demand following the COVID-19 pandemic that will causie spot shortages, followed by resumption of a downward trend over the following ten years or so.
That’s similar to the pattern you can observe in the chart [above] during the years following the end of World War II, which had also created massive pent-up consumer demand.
Consider that the coronavirus pandemic hasn’t really altered the underlying economic fundamentals. The past 40 years has witnessed an explosion of manufacturing capacity in China and other developing countries, and that hasn’t gone away. Meanwhile, dependency on oil — a key driver of inflation in the 1970s — has shrunk due to improved energy efficiency and aggressive exploitation of renewable energy resources, which for all practical purposes are in infinite supply.
Another factor, which doesn’t get as much attention as it probably should, is declining birth rates and aging of the population on a global scale, leading to a slower rate of population growth in the future that may constrain demand for consumer products in comparison to the past century. Let’s face it — we old farts just don’t consume as much as growing families do!
So yes, we should keep an eye on inflation — but I don’t think we’re in for a repeat performance of the horrible 1970s.
Echoing Nelson’s thoughts are the perspectives of another business veteran — an editor and publisher who has been intimately involved in the commercial/B-to-B field for decades. Here is what he wrote to me:
I don’t want to get into a public debate with the inflationistas because I will never convince them that this is likely not a replay of the 1970s and early 80s inflationary period pre-[Paul] Volcker. (Speaking personally, I didn’t own a house until I was 42 for the very reasons you cited in your blog post, and I was just a lowly editor back then.)
What we’re seeing today is simply the price shock of suddenly soaring demand, aggravated in the case of some commodities such as steel by Trump-era tariffs.
All commodities are tied to the price of crude oil, the most volatile of all commodities, which is long-denominated in U.S. dollars. WTI crude pricing is now at around $63 per bbl. — about where it was in early 2020 before the pandemic hit. It went negative for a time during the worst period of the crash in worldwide demand that was brought about by the pandemic. Tanks couldn’t be found into which to put the excess crude coming out of the ground from U.S. fracking. Traders freaked out, as they sometimes do.
So naturally, the percentage changes today look jaw-dropping. I can go through all the other commodities mentioned in your post and provide simple explanations as to why each is currently on the rise. Logistical bottlenecks are a big problem with everything — but as with oil, most of the issue is the sudden surge in demand as the pandemic winds down even as production and logistics aren’t yet prepared to fulfill the need.
In other words, the situation has very little to do with government spending — especially since most of the infrastructure money isn’t even allocated, let alone spent. Also, the Biden administration has yet to raise a single tax. It can’t. Only the House Ways and Means Committee can initiate tax changes, and those must then go through the Senate to become law. Senate Minority Leader McConnell and his allies have made sure nothing has gotten through.
Of course, it never hurts to keep an eye on things — especially with structural inflation as you noted in your article. But it’s important to look also at other, broader data. The Producer Price Index in April did reflect the increase in commodities prices, but the Consumer Price Index, even though it had a month of robust increases, remains below 3% annualized. And the Personal Consumption Expenditure Price Index, which is what the Fed pays attention to the most, is still tracking under 2% on an annualized basis. (A little inflation can be a good thing, actually.)
On the income side, average wage rates aren’t rising; they’re more likely to be falling in the future as low-wage service workers, including those in foodservice, re-enter the market.
So in my view the things people see with inflation are most likely short-term issues. Let’s look at it again in six months to a year. I’d also suggest that people read economist Paul Krugman’s columns in the New York Times for a bit of perspective that’s counter to the views of the inflationistas, if only for balance. The monetarists have been wrong since Volcker squeezed out the inflationary spiral. It was painful, though — so we’ll want to keep an eye on things.
Considering the views put forward above, I think it’s fair to conclude that “the jury’s out” on whether we’re actually entering a prolonged inflationary period. If you have additional thoughts or perspectives to share on either side of the issue, I’m sure other readers would be interested to hear them. Feel free to leave a comment below.
The rise in lumber prices has received a certain degree of coverage in the news in recent weeks and months. For anyone who used the “pandemic period” to engage in home remodeling or renovation projects – perhaps moving away from “open concept everything” to reintroduce the designated spaces of yesteryear – the eye-popping price of lumber has come as something of a shock.
As for explaining the sharp increase, it’s logical to think that prices are directly correlated to the increased demand for the product. But this explanation is incomplete; the steep price rise in a wide range of commodities well beyond just lumber tells us that inflation isn’t relegated to just a few high-demand product categories. It’s the closest thing to “across the board” that we’ve seen in over 40 years — and the issue seemed to come out of nowhere.
Price inflation has been such a non-factor for so many decades, most consumers don’t even have personal memories of it. But those of us “of a certain age” remember well how difficult it was to navigate an “inflation-everywhere” environment where annual salary increases could never keep pace with rising prices.
It was difficult on people with fixed incomes, of course, but perhaps worse for young consumers who found that struggling to save for a down payment on a house purchase was a losing proposition as the gap widened rather than narrowed year over year. Living like a monk while scrimping and saving for a house gets old when you realize that your efforts aren’t getting you anywhere near where you’re attempting to go …
As for the situation now, the inflation warning signs are all around us if we dare to look. According to a report published in the May 21, 2021 issue of The Wall Street Journal, lumber may exhibit the most visible spike in prices, but consider what futures prices are showing for a whole range of commodities when compared to just one year ago:
Natural gas: +65%
Crude oil: +85%
It doesn’t take a degree in economics to know that these sorts of trends are pretty alarming. Whenever it has an opportunity to take hold, inflation is one of the most insidious of economic problems – and one that’s extremely difficult to reverse. Inflation is also very debilitating for the personal budgets of the large majority of consumers, and it causes the most harm to those on the lower rungs of the economic ladder.
The next few months will tell us if this particular inflation is going to be a temporary phenomenon or not. How much of the commodity price increases are attributable to transitory events that will ease as the world’s economies move further from lockdown?
But if this inflation turns out to be something more structural or more directly correlated to the massive increase in government spending paid for by the expanded money supply, expect the economic (and political) climate to begin to look vastly different in the coming months.
Inflation will be uncharted territory for most people. But a few of us veterans will be around to provide context and counsel — and perhaps engage in a bit of “Sister Toldja” commentary while we’re at it …
Corporate promotional products and branded swag have been a big part of business for decades. The Advertising Specialty Institute reports that in 2019, promo products expenditures in North America amounted to nearly $26 billion, amazing as that figure might seem.
But that was before the coronavirus pandemic hit, shutting down trade shows and forcing the cancellation of events (or migrating them online). All of a sudden, demand for branded tchotchkes, hats, t-shirts, tote bags and the like pretty much disappeared.
However, just because corporate swag fell off the radar screen in 2020 doesn’t mean that corporate freebies for customers and prospects are a thing of the past. But COVID seems to have changed how some marketers feel about these items — and given them reason to rethink how branded merchandise can do a better job of actually nurturing customer relationships.
Because of this introspection, the days of ubiquitous, unlimited “homogenous” corporate swag may well be numbered — and that wouldn’t be such a bad thing. For those of us who have participated in industry trade shows, corporate events and the like over the years, when you consider how much stuff is given out to people who promptly discard the items because they aren’t something they either needed or wanted to have, coming up with a different approach was bound to fall on fertile ground.
Enter “gifting-as-a-service” firms. Several of these such as Snappy App, Kitchen Stadium and Alyce have sprung up in recent times. They operate under business models that are as simple as they are elegant. Think of them as “choose your own swag” concepts wherein recipients are given the opportunity to pick which items they prefer – and in some cases the size and color, too. Then those items are shipped directly to the recipient’s home or office.
Being given a card to check off their item of choice it may not pack the same impact as being given the item right there on the spot, but it actually makes life easier for everyone. No longer does a trade show attendee have to lug the item around the exhibit floor and back to his or her hotel room — nor pack it for the flight home. The exhibitor doesn’t need to ship swag merchandise to the show – hoping that the quantity shipped isn’t substantially higher or lower than the number of items actually needed.
Such “gifting-as-a-service” programs provide a better experience for recipients, too, because people can select something they actually want from among a selection of items. And for companies, it could actually turn out to be less costly in the end because they wouldn’t need to be pay for gift items that aren’t redeemed.
Such programs are versatile enough to work across all types of activities – including online as well as in-person events. They can also be offered as rewards to loyal customers completely apart from any particular show or event.
One final plus – or at least a hope – is that less swag will end up in the trash before it’s even had the chance to be worn or used. In a world where there’s increasing focus on environmental sustainability, that has to count for something, too.
Nearly everyone dislikes “office politics.” But does day-to-day employee gossip rise to that level? And have we lost something actually beneficial in the wake of remote work limiting our in-person interactions?
Ever since we were children, most of us have been conditioned to regard gossiping as a negative trait that any caring person should avoid doing.
At its core, the definition of the term is “people speaking evaluatively about someone who isn’t there.” But gossip can also relate to talking about rumors and conjecture regarding topics that go beyond just people.
Historically, gossip or the rumor mill in the office often served as a means by which anodyne-sounding corporate announcements would be subjected to a healthy degree of “whispered conversation and conjecture.” Or, as one DC-area employee put it in a recent Wall Street Journal article, ”You hear the surface story, and then you learn what the real story was – and that’s the gossip.”
In the months since mandatory office workplace lockdowns have been imposed, the gossip mill has fallen on hard times. Instead of serendipitous conversations happening in the lunchroom, in hallways or following group meetings, many workers are spending their days with just one person – themselves. Or they might be interfacing via Zoom meetings with the same handful of people from their core work team, where it’s always the same information being recycled among the same group of people.
Even for employees who have returned to working at their corporate offices, hybrid schedules often mean that there are far fewer daily interactions happening with other employees.
On one level, the reduction in gossiping may be reducing workplace “drama” and helping people focus better on their actual work tasks. Although the evidence is murky, productivity studies do appear to show an uptick in employee productivity since the onset of the COVID-19 pandemic.
For senior leadership, office gossip has been one way to rely on a kind of “early-warning system” about corporate initiatives or directives. In every office there seem to be a few people who have the pulse of the organization – it might be an executive assistant or some other staff support functionary – who other people feel comfortable confiding in and who in turn can communicate “the upshot” to the top brass. While difficult to quantify, that sort of dynamic really counts for something.
Of course, human nature being what it is, office gossip is never going to go away completely. But Skype or Zoom calls feel forced, and typing out thoughts or conjecture on IMs or e-mails is borderline-weird and feels inherently risky.
On balance, do you welcome the decline of face-to-face “gossip conversations” with colleagues — or do you suspect that a useful guerilla communications conduit has been lost? Please share your perspectives with other readers.
It had to happen: New state laws are now classifying robots as humans – specifically when it comes to traffic laws.
With the proliferation of delivery robots in quite a few urban areas, the issue was bound to arise. Car and Driver magazine reports that the state of Pennsylvania now defines delivery robots as “pedestrians” under a newly implemented law.
More specifically, the Pennsylvania legislative measures stipulate that “autonomous delivery robots” can lawfully maneuver on sidewalks, roadways and pathways. They’re allowed to carry cargo loads as heavy as 550 lbs. at speeds up to 25 mph. on roadways. (On pedestrian pathways and sidewalks, their speeds are capped at 12 mph.)
Pennsylvania is just the latest state to pass new laws regulating autonomous driving and flying technologies. Indeed, there are now a dozen states that allow delivery robots access to roads as well as pedestrian pathways.
The new laws raise some interesting questions. Undeniably, delivery robots are a popular option for businesses and logistics companies; in a relatively short period of time their deployment has evolved well-past that of being merely a “novelty factor.” “The sidewalk is the new hot debated space that the aerial drones were maybe three or five years ago,” reports Greg Lynn, CEO of Piaggio Fast Forward, a robotics design firm that offers a suitcase-sized robot called gita that follows its owner around.
But deploying robots onto street- and sidewalk-grids that were mapped out decades ago – when there were no expectations of the sci-fi scenarios of autonomous vehicles – can be quite problematic from a safety standpoint.
Of course, we’ve faced this issue before – and not so very long ago – with the emergence of the Segway “people mover.” Those contraptions have caused more than a few problems (accidents and injuries) in urban centers around the world, leading some European center-cities to effectively ban their use — such as in Budapest and Barcelona.
One of the many ripple-effects of the COVID-19 pandemic is the effect it’s had on the demand for commercial office space.
In a word, it’s been pretty devastating.
The numbers are stark. According to an estimate published by Dallas-based commercial real estate services and investment firm CBRE Group, Inc., as of the end of 2020, nearly 140 million sq. ft. of office space was available for sublease across America.
That’s a 40% jump from the previous year. Not only that, it’s the highest sublease availability figure since 2003, which means the situation is worse than even during the Great Recession of 2008.
Of course, it isn’t surprising to expect that more sublet space would become available during periods of economic downturn, when many businesses naturally look for ways to cut costs. But those dynamics typically reverse when the economy picks up again. This time around, it’s very possible – even probable – that the changes are permanent.
The reason? Many companies that reduced their office space footprint in 2020 didn’t doing so because they we’re suffering financially. It was because of government-mandated lockdowns. And now they’re expecting many of those employees to continue working from home, either part-time or full-time, after the pandemic subsides.
Employee surveys have shown that many workers prefer to work from home where they can avoid the hassle and expense of daily commuting. It’s understandable that they don’t want that to change back again. In many business sectors which don’t actually need their workforce be onsite to produce revenue, companies are simply ratifying a reality that’s already happened. Accordingly, they’ve changed their expectations about employee attendance at the office going forward.
Commercial landlords are now feeling the long-term effects of this shift in thinking. Rents for prime office space fell an average of 13% across the United States over the past year. In places like New York and San Francisco the drop has been even steeper — as much as a 20% contraction.
For many of the lessees, it’s less onerous to sublease space to others rather than attempt to undertake the messy business of renegotiating long-term lease contracts with landlords. Still, there’s pain involved; sublease space historically comes with a significant discount — around 25% — but with the amount of sublet space that’s been coming onstream, those discounts may well go even deeper due to the lack of demand.
The cumulative effect of these leasing dynamics is to put even more downward pressure on broader rental rates, as the deeply discounted space that’s available to sublet puts more pressure on the price of “regular” office space. It’s a classic downward spiral.
Is there a natural bottom? Most likely, yes. But we haven’t reached it yet, and it’ll be interesting to see when — and at what level — things finally even out. In the meantime, it isn’t a very pretty picture.
What are you witnessing with regards to office space dynamics within your own firm, or other companies in your business community? Please share your thoughts below.