2020 has been an unprecedented year. Have you heard that at all? Have you said it? I know that I’m guilty of saying it. Even if you’re sick of hearing it (or saying it in my case), the fact of the matter is that it is very true. Forget about Covid-19 for a minute. Think about the economy and the stock market. The market indexes have made a strong comeback despite all of the bad news and the continuing struggle to contain the virus. There are a lot of thriving companies and there are just as many that are either declaring bankruptcy or strongly considering it.
Let’s look at retail for example. Brooks Brothers just declared bankruptcy this week. J. Crew is another major retailer that declared over the past couple of weeks. Macy’s is on life support, but will probably figure out a way to make it if I had to guess. Didn’t we know retail was struggling before Covid though? Amazon killing retail has been a narrative for at least the past 5 years, probably more like the last 10 years. Why are we surprised then that Amazon is making new highs every day and the retailers are so far from their highs that they can’t even fathom hitting them again?
Retail is unfortunately a negative trend that was accelerated by this recession. How about a positive one? Think about video conferencing. Prior to this recession, most people didn’t even know what Zoom was. Now, every time I talk to someone virtually, I call it a Zoom whether the meeting took place on Zoom or not. I feel like Zooming is synonymous with Googling these days. If you need to find something on the internet, you Google it. If you need to have a video conference, you have a Zoom meeting.
The list can go on, but you catch my drift. Over the last 6 months, many trends that would have taken the better part of a decade to unfold have had a major impact on the way we live our lives. It is exciting in one way because new is always fun. However, there is a downside to it. If we have found new ways to do things, then the suppliers of the old ways are going to suffer.
Covid-19 and the recession associated with it accelerated the growth of the disruptive companies that were slowly taking market share in their respective spaces. Unfortunately, that will lead to more bankruptcies and a flushing out of companies that have been on a steady decline for years. That is part of going through a recession. This one may be different in that it happened so quickly and will (hopefully) end quickly. However, new names will arise and old names will disappear just like in past recessions. When we look back on it some may refer to the speed at which it all occurred as unprecedented.