In this new series, we sit down with Vendasta’s executive team and interview them on current issues facing agencies and enterprises.
Our panel includes: CEO and co-founder Brendan King, CMO and co-founder Jeff Tomlin, CCO and EVP of Sales George Leith, CTO Dale Hopkins, CSO Jacqueline Cook, EVP of Marketplace Ed O’Keefe, EVP of Product Gib Olander, and VP of Demand Generation Devon Hennig, who moderated the discussion.
What’s the economic impact of the coronavirus on local businesses and how should agencies and media companies respond?
We challenged Vendasta’s C-Suite to tell us exactly what they would do if they were agency owners right now, outline their predictions for the future of small businesses, and elaborate on the challenges and opportunities in today’s market. The following article contains their predictions, while the rest is covered in 10 things agency owners should be doing right now to thrive and survive and 5 SaaS challenges in the midst of COVID-19.
Alternatively, watch the entire conversation at Conquer Local Roundtable | Episode 01 | eCommerce and COVID-19: What now, and what's next?
What do you foresee for the next six to 12 months?
1. A return to brick-and-mortar
Ed O'Keefe: I think consumers have a new awareness of small businesses, and how valuable they are. I mean, I know personally that I literally miss walking into some places and I really want to sit down and be served at a restaurant really badly. So I think the world is going to bounce back to brick-and-mortar being open big time. I think there's going to be a blitz of people, all of us humans wanting to go back and touch, and feel, and be brick-and-mortar customers. I think they're going to see a spike, and I hope that they've spent this time to polish themselves up, rearrange their merchandise, dust it off, re-merchandise themselves and get ready for this, the blitz that they're going to have.
2. Digital won’t slow down
George Leith: I’ve been talking to lots of partners and resellers, and It's interesting. There seems to be this common thread that, if you were putting off your transition to digital, this is the catalyst that will get you on track to be further down the road. So there are certain businesses that are kicking themselves right now that they didn't do e-commerce when they knew they needed to do it. But then there also are other organizations that are saying, "We're going to now double down on that transition, move budget, do whatever we need to do to double down on that transition because we don't want to be caught unprepared if this were to happen again."
And I think all of us agree that there's a really good chance it might happen again...All I'm saying is that we'll look back at this as the moment where that digital transformation really started to rocket up, ratchet up, or whatever wording you want to use. That's what I'm hearing across the board from people. They really want to capture this opportunity.
3. Unique opportunities with marginal consumers
Dale Hopkins: Bangaly [Kaba], he’s basically the facilitator for our Reforge course, and one of the concepts he talks about is this marginal consumer. The marginal consumer is essentially the person that's not buying your product today but would buy it in under the proper scenario. And what's happened with COVID that's really interesting is a whole bunch of marginal consumers have been pushed to try products [and experiences] that they probably would have tried except for that they hadn't been pushed. The interesting part is whether people are going to recognize these opportunities as such, and actually welcome them, and make it a great experience [for the consumer].
The craziest part is, for the marketing group, the hardest thing you guys fight for is to get somebody to give you a chance, and COVID is putting that in your lap in a lot of these cases. So the question is, what are you going to do about it? Most businesses are utterly unprepared, and are going to botch their first experience because they got forced into a first experience before they were ready to have a first experience. It's like, I don't know, it was like the girl you were going to ask to prom instantly decided you're going to go on a date tonight, and the answer is, "Shoot, I'm not ready for this."
For me, the example I have is Click & Collect. It was a terrible experience. I didn't get any of my groceries. I absolutely hated it. I will never do Click & Collect again. So this is something where I obviously had to try out an online grocery pickup service and they blew it, and I will not try it again. However, I've had other services where it's like, "Hey I can go in, I can order something, I can pick it up and it’s amazing. I may change my behavior." So the interesting part is that during COVID, you have this opportunity to make a first impression that you otherwise would not have. Because I was never going to do Click & Collect beforehand.
So, I mean, I think that the question is really up to the local businesses. You're going to have an opportunity to make a first impression. What's that first impression going to be?
So, what am I predicting? It depends on each of the local businesses and how they behave when they get that first chance to make a first impression.
4. New habits
Gib Olander: Along those lines, what I've been thinking is that self isolation has been long enough now to break habits, right? What's the stat? It takes something like 21 days to break a habit. And I've been trying to think long-term of how many consumer and buying habits are going to be completely broken. People before were mindlessly doing just what they do, whereas they're now open to choice for the first time, maybe in their entire life. Because what they used to do isn't available to them anymore.
And so, it'll be really interesting after COVID-19, or as we start to come out of isolation, to see what habits we want to pick up again and which ones consumers are going to be happy to shed as new opportunities are going to be available. So I don't think there'll ever be a going back to the way it was. I think you've got to start to anticipate what's the new - and I hate the new normal as a phrase - but what does the world look like?
We've got a whole generation of people that over the next, maybe it's not six months, but it's probably over the next five years that are going to make fundamentally different buying decisions, behavioral decisions, because of this event. It's changing their framework of what's important to them, of how they perceive the world, of how they interact with things, how they learn. The smart businesses are going to find a way to be in front of that curve and try to anticipate. And I think that's the great opportunity that we're at right now.
5. More domestic production
Brendan King: One macro-trend I’m predicting is that we're going to bring back a lot of the things that have been outsourced to other places. So we're going to bring back the ability to build our own pharmaceuticals in North America. The other thing that people are talking about, is the ability to build stuff. If you look at what has happened in Asia, they've just built stuff then people come to that infrastructure, and North America hasn't really been like that. If you listen to Elon Musk, he talks about his Dreadnought factories and how you can build stuff in North America with a robot, just as cheap as you could build it with people somewhere else. It's just the will to build stuff hasn't been there.
6. Knowledge will become a more highly recognized and valued resource
Gib Olander: I've long debated that teachers should be the highest paid people in every country. And you know what? With the change that's happening today, we’re going to start to make that happen. If you look at Peloton, right? A great instructor on Peloton, they just said that they get 25,000 people in their class. So world-class educators and world-class leaders with this change, they're going to get a chance to actually become the stars they deserve because access to their information and learning from the greatest whoever-it-is is going to be available to you now. And so that change is going to happen, where you're going to pay to see the Peloton instructor more than you’re going to pay to see Sammy Sosa.
7. We can be remote and it can be okay
Jacqueline Cook: There's three points that I want to talk about. The one is we can be remote and it can be okay. And I think a lot of companies and a lot of business practitioners are waking up to this. I had a fantastic physio session remotely with a good friend of mine. Number one, I actually have the time as a consumer to do physio. I've been putting it off for literally years, but now that it's remote I can find time in between bedtimes to do that. And from her perspective, she can find time in between her toddler's bedtimes to do it as well. So we see this tremendous flexibility in both the consumer side and the practitioner side, and you can apply that to many different business models. So we can be remote and it will be okay.
8. Small business is being forced to catch up to the tech of big business
Jacqueline Cook: The second thing is something we always talk about a lot, and that’s that technology has been slowly causing small businesses to become obsolete. And I think this Amazon effect is actually what's sort of slowly killing the economy, and I think what’s happened recently has been the swift kick in the butt that we all needed to change our buying habits. And what I mean by that is there's always been a lot of great local options, but I simply don't have the time as a consumer to go there. I would love to buy Lex’s clothes, for example, from a local supplier, but it's so much easier because Amazon's one click away to do so. Now that there’s the hope that a small local business could be just one click away and that they're having to do it now because we are remote, I think we've actually prevented sort of a long, dark, slow death by them being forced to do it right away.
The other thing is I think, because of that, we've all started to recognize as consumers how much we appreciate local experiences and the human effect. And I think we as buyers, we recognize that, "Wow, the Amazons of the world pose an immense threat to our friends and our local communities." And I think we're going to spend the extra $4 on an item to purchase it from someone local because we love the idea of being able to go into the store and knowing that they will still be there when we do want to go to it.
9. A return to local supply chains
Jacqueline Cook: And the last point I'll leave with is, I think there's going to be this surge of, and revival, of local supply chains. We have distributed so much of our supply chains. One cog and the wheel comes from here and the other cog comes from there, and it works really well when the economy's humming. But as we've seen, as soon as it stops, if you can't get one of those cogs in your machine, the whole thing falls apart. And so, I think everything from food and the way we source our meat, to the way that we even build our products, people are going to start looking at local suppliers and local sources, even if it means costing a little bit more. And maybe even local toilet paper.
10. An uncertain future for interlopers
Jeff Tomlin: One thing that I wonder about will be the markets where they have interlopers. What will happen to interlopers? When we were in the real estate space, they called the lead generators interlopers that came in and started skimming money off the industry. I mean, they're also called aggregators.
I think in industries where aggregators added value because the industry itself was inherently inefficient - like travel was an example of one that was really inefficient - they'll continue to be successful and they'll grow, and they'll probably grow even more with people buying a lot more online.
But then I wonder about the other industries where you have interlopers that just took advantage of laggards. One example of that is the food delivery apps. I don't think the food delivery service was inherently inefficient. It wasn't inefficient for my local cafe for me to order takeout from them, and for them to hire a driver. These apps just saw an opportunity where a whole bunch of restaurants were actually marketing themselves, and they stole their brand and skimmed their audience off the top, and skimmed off a bunch of margin and a bunch of business from the restaurants.