A Peek at the Good & Bad Ahead

The pandemic has every business owner becoming a bit of an economist. We’ve got skin in the game in the advertising and marketing segment that is always a volatile proposition.

We’ve been blessed by successfully riding the waves of good times and bad thanks to our people and great clients. We’re known for helping clients consistently hit their KPIs by building cult brands. We have a never-ending focus on new business and a conservative financial approach to running a business. We’ve also been extremely lucky. As I look at 2021, here are some thoughts.

Propping Up the Economy till The Vaccine Is Deployed. Back in May of 2020, small business owners were asked “do you think your business will survive the pandemic?” and only 26% were extremely worried or said their business would not survive. In November, that number hit 40%. With the election issues fading one more government stimulus can fuel small businesses through the winter and into vaccine deployment. Stock analysts feel a divided Congress with Republicans maintaining control of the Senate as another positive factor in maintaining stock market growth that will likewise help small businesses, consumer investments and retirement funds. When can we see the vaccine(s) reducing pandemic concerns? We’re looking at Q3 2021.

Working from Home (WFH) Will Change Things for Many Years Ahead. From office real estate prices to business hotels, travel and restaurants, companies will continue to support some level of WFH after the pandemic. Businesses will significantly rely on video conferencing instead of business travel. Looking at the upside, video conferencing means easier access to new business opportunities by small businesses.

Knowin’ When to Hold ‘Em, Not Fold ‘Em. Only one Creative Energy client pulled their advertising and marketing activity in 2020. The rest ramped up or maintained their spending because they know that you build your brand during times of recession at a lower cost. Record sales and increased market share was the result. The report by Nielsen says it all. Brands that pull back take 3–5 years to recover from advertising pull back and a loss in revenue while those who maintain their advertising see market share growth. Today, our clients already have plans in place for 2021 or are finalizing them now.

The Great Migration Is On. WFH, pandemic spread within urban markets and rising taxes is driving migration away from urban centers to the suburbs. A look at markets seeing growth in residential sales in 2020 is a testament with not a single urban California market seeing growth.

Building Material Sales Will Continue to Grow In 2021. Migrants in search of a new home from American cities prefer new home construction to avoid remodeling hassles. It’s a boom time for contractors and for building material suppliers. A national survey of home builders shows that most markets are seeing 25% of new customers coming from outside the market and while prices for new construction is going up, markets that are welcoming migrants from big cities are finding some good values. Here is a look.

One Creative Energy client reports that they are slammed with production orders for the new home construction and remodeling markets. Great news. The same can be said for appliance manufacturers.

There Is A Ton of Pent-Up Demand. The best news in the pandemic’s pause in travel and spending at restaurants and bars helped consumers pay down debt. The Federal Reserve reports that among those whose income has not been severely impacted by COVID consumer debt is at an all-time low. That means that when pandemic concerns are truly ended, we can expect a rush of spending within segments most in need of a recovery – travel, entertainment, restaurants, and luxury goods.

That is our peek into 2021 and the market factors and trends that we are watching. If you are ready to look at your plan for next year, we are ready to listen.