Last week, we reviewed data that broke down the economic impact of COVID-19, including what industries have been hit the hardest, what products and services have the most viable long-term potential, and how businesses can position themselves in front of changing consumer behaviors. Leading the discussion with us were Chris Jourdan from CPR Cell Phone Repair, Kyle Wainwright from Tech Defenders, and James Schellhorn from RepairQ and ServiceCentral.
Below we highlight the key takeaways from the session, combining insights from the presentation and the input that our panelists provided live.
One more note, as we mentioned in our talk, we are not financial advisors and we don’t know what will happen in the economy. We encourage you not to jump to any conclusions based on comparable examples from the past, but we hope our update helps you stay informed about these uncertain times and helps you to make thoughtful decisions about the future.
1. The downstream effects are unparalleled.
The standstill that has brought the world economy to its knees has parallels to previous downturns, but it also has new dynamics that we’ve never encountered. Multiple crises are unfolding in tandem, some may still yet manifest, and it’s unclear how they’ll layer on top of one another. In attempting to solve for one problem, we cannot ignore how that will impact other problems. It’s human nature to focus on what’s happening in front of us and now, but it’s equally important to consider the 2nd, 3rd and 4th order effects of the pandemic that almost certainly will drive change for months, and more likely years.
2. Despite rapid developments, there is still so much uncertainty.
The complexity of a new virus yields the unfortunate reality that there is still so much left to be discovered. Much of the economic recovery relies on our ability to give people the confidence to “get back to work” and consumers to spend again. But without clarity around how to implement new preventative measures in businesses like contact tracing, touchless pick-up/drop-off, or whether businesses can manage “start and stop” behavior is still very much undetermined.
3. Consolidation and increased partnership will be king.
Because the pandemic and economic fallout will affect regions in varying ways it is increasingly important for businesses to band together and pool resources to remain profitable. Having a healthy cash flow and the necessary resources to effectively market or implement new processes will be a determining factor in who just survives this time and who thrives.
4. New sectors of repair may gain new life.
Many organizations are rapidly deploying equipment and processes to tackle the “new normal” including investments in drones, scanning or contact-tracing technology, and even repair of critical medical equipment like ventilators.
As businesses look to diversify what’s being offered in-store they should consider what ways they can support these trends at scale.
5. Strengthening the bond of your business with the community is critical.
Businesses must transition from having a transactional or passive relationship with their customers and work at developing personal connections. It is important to recognize that because of the coronavirus a business may pose a real threat to the health or wellbeing of a consumer and overcoming that begins with developing greater trust. Focusing on the local community at large by engaging schools, hospitals, and enterprise organizations present some opportunities for new relationships.
6. Great businesses have come from recessions.
Despite all the uncertainty, this is the time to build and invest in solutions that will propel your business beyond the current crisis. Recessions are forcing many businesses to figure out what is needed, instead of what is nice to have. Due to the nature of increasing (and in this case, unexpected) unemployment, there is the opportunity to gain access to incredible talent. Every entrepreneur right now should be considering what new problems have come to light as a result of this pandemic and focus their attention on solving those problems, as long as they’re long-lasting.
Every industry is up for grabs and a majority of the Fortune 500 companies today were built during hard economic periods.
7. The repair industry is surprisingly resilient.
As other sectors in global economies experience severe impacts and some implement hiring freezes or even layoffs, the repair industry is experiencing aggressive growth with many businesses hiring. Past downturns demonstrate that this current economic environment may be a precursor to record and rapid growth.
8. Data suggests this summer could be a record-breaking one for sales volume.
Over 50% of businesses surveyed have reported that sales are at record levels and they’re making arrangements to handle forecasted increases in demand. As consumer confidence rises and uncertainty in the economy dissipates it is expected to translate to increased spending on buying refurbished devices and repairing existing equipment instead of replacing them.
Kyle Wainwright put it best: “I’m a pretty optimistic guy. I think the repair industry is going to have its best summer in the last five years. The industry right now is set up for success.”
General Manager, CPR Cell Phone Repair
Chris has been in the consumer electronics retail business for two decades. He opened his first ten retail locations (Verizon stores) during the recession of 2008-2009 and has supported CPR franchise owners through the unprecedented times of 2020. Purveyor of Dad Jokes and aspiring Dog Ranch owner.
Senior Director of Business Development, Tech Defenders
Kyle started in the repair industry in 2012 growing an 18 store repair brand over two states, completing nearly 500,000 repairs and selling 100,000 devices. Kyle currently helps oversee services and procurement repairing and buying several thousand devices each month as the director of business development at Tech Defenders.
Matt Zieminski is the Director of Partnerships for ServiceCentral and has been in the electronics industry for almost ten years. Outside of work, Matt loves to hike and enjoy the great outdoors of Richmond, California.