post COVID-19

By Jeanette Garretty, Robertson Stephens Wealth Management

Humans are an amazing species.  Perhaps it goes back to the ancient motivation to hunt for the next mastodon – while ever-attempting to find a better way to put food on the table — that even in the depths of coping with an immediate calamity there is always a recognition that there is a future worth imagining.

“Now what?” is an underappreciated bold declaration of survival.

The current economic times, like the 2008-2009 Financial Crisis before it, seems to pull us towards revolutionary discourse, unsettling and somewhat exciting. Life will never be the same, it is argued, as if, against all reason, life is ever the same. 

The most problematic aspect of this view, however, is that it provides no blueprint whatsoever for thinking through the changes that will occur. And something of a blueprint does exist if one accepts that a more plausible way to view the future is to consider the evolutions and stress fractures already in place before the Pandemic of 2020 – and what the new economy post COVID-19 might look like if they were more quickly brought to logical conclusion.

Like a giant metal press, imposing every-increasing pressure on a conglomerate mixture of materials, the pandemic may have the effect of fusing and reshaping the more malleable elements while completely breaking the brittle and fragile. Even those things that break, however, will then provide the materials for something new, albeit over a longer term and with considerable work.

Consider health care

It does not require unusual foresight to predict that there will be a much-increased focus on health services, drugs, and medical technology and an attendant expansion of business opportunities in the industry. What might that mean more specifically, however? For one, the “telemedicine” that has become critical to providing ongoing care to patients governed by social distancing and stay-at-home orders finally will receive widespread adoption and enjoy considerable innovation – “finally” because telemedicine has been utilized by numerous doctors (e.g. concierge medicine practices) and various hospitals (Stanford, Kaiser) for at least 10+ years.

Standing in the way of the full innovative evolution of telemedicine has been the technological reluctance of various demographic groups, privacy concerns and business model issues (flat fee concierge medicine doesn’t have to worry about whether a FaceTime meeting is really an office visit). Those barriers are now going to be broached because they absolutely have to be, and personal medical care will be wildly different (and better, maybe even cheaper) as a result.

On the other hand, what will be the fate of nursing homes, a very big business in the United States that has been wracked by service, cost and regulatory problems for years? The long term demand for nursing homes and assisted living facilities is rising (not just in the United States but also in other developed nations, such as Great Britain, where the population is rapidly aging) but the high pandemic death tolls in nursing facilities may finally force widespread facility closures — certainly, a number will be sued by aggrieved families – and a complete re-think of the provision of care to this demographic. It may be the pandemic that ultimately brings forth, from the shame and rubble of the industry, government policy support for in-home professional care.

Discussed below are some observations, questions, and tentative answers, for a variety of economic issues and business sectors. The common flavor is evolution, seasoned with a considered opinion that the stress foisted upon us makes nothing better (a failed business model will not be saved by the pandemic) but does make for change.

Retail stores

The demise of the American department store has been a headline topic for a number of years; too many stores losing too much business to online shopping and to more focused retail operations. With the forcible closure of many department stores and chain store outlets as a result of stay-at-home orders, it is highly unlikely that all of them will open up again.

Other industries have been through this same “right-sizing” process, e.g. banking and auto dealers. As these other industries have shown, the business doesn’t disappear, but reforms and re-sizes itself for the demand. Furthermore, there may be more demand, vis-à-vis online vendors, than once thought, as online speed of delivery has proved problematic during this economic crisis. People may actually find themselves yearning for the suddenly new experience of physical window shopping and immediate gratification.

The pandemic-instigated collapse of major swaths of retail most certainly will bring challenges to that other American icon, the shopping mall. However, there will also be an opportunity, born out of necessity, to more fully execute on the vision which has been emerging of the shopping mall as a destination experience going well beyond shopping.

Yes, there have long been shopping malls with theaters and roller coasters and all sorts of other entertainments; fully embracing the notion of the experience as primary, not secondary, to shopping means re-thinking parking arrangements, demographic diversity and unique offerings. It is plausible that the new normalcy will be an intensified desire for socialization as possible within the restrictions of social-distancing safety; shopping malls are in a great position to meet this need IF they willingly adopt a new playbook.


There will be many fewer. There were many that were barely profitable prior to the pandemic and they are unlikely to survive. At the same time, there are restaurants – brand-new or old and established – that have been pushed to rapidly connect effectively, emotionally, with their customers and who will come out of this with new ideas to improve profitability for the long run. The biggest problem for restaurants may be that because of extended social distancing requirements they will have to reduce the number of tables, in turn fundamentally altering their revenue projections.

New “I’m-here-to-help-you” anything

It is important to remember that a chance to shine is only a great thing if one can shine. Much-hyped food delivery services have largely failed to deliver, during the stay-at-home opportunity, to provide new customers with a positive memorable experience; they may have increased subscriptions but they also have increased unhappiness. As a result of the unhappiness, fees that were not so closely examined when being paid by a small group of early-adopters are now being savaged by a much broader population.

Vendors once serving primarily a national, wholesale market may now be attempting to serve a local, consumer market and mistakes not only can be made, they will be made. Twenty years ago marketers started to identify a real challenge to website-based sales — if a website did not immediately answer a potential customer’s questions and make it easy for the customer to make a purchase, that customer would leave and never return. NEVER.

With the current push by seemingly everyone to go online to buy and to sell, and frantic revisions to websites and products, the winner will be the company which easily gets the customer what they want and surprises them with a new source of supply. The loser will not know what hit them.


Henry Ford revolutionized manufacturing, and labor practices, with his auto assembly lines. Robotics started to radically alter the manufacturing labor force in the 1990s, changing the labor input and requiring that labor have different skills, especially technology skills. The pandemic will further change the role of labor in manufacturing, quite probably by introducing even more technology onto the “shop floor” as part of the need to provide social distancing of the labor force.

Another likely impact of the pandemic, however, is to raise manufacturing costs. In Germany, manufacturing facilities are utilizing multiple shifts, extensive daily cleaning/disinfecting and onsite medical professionals. Whereas health care for U.S. manufacturing employees has long been a tenet of the employer-employee relationship, largely as a result of union bargaining, it may be that that “health” will become an explicit, direct manufacturing cost resulting from government requirements to keep a facility open.

Sanitation, protective gear, advanced air filtration, increased paid sick leave, et. al. are beneficial on many levels but will raise costs. These cost increases will arise at the same time that many manufacturing industries will find themselves pressured to bring a certain amount of manufacturing onshore, reducing their dependence on far-flung supply chains. A fair argument can be made that one of the fundamental forces keeping inflation low while the U.S. economy grew over the last 25 years was the lack of capacity constraints as a result of aggressive globalization and the much-reduced financial drag of inventories in a just-in-time inventory world. It seems inevitable that we are now entering a period of time of reduced globalization and an enhanced appreciation of the hidden costs of just-in-time inventory management.


Perhaps no topic has received greater scrutiny in such a short space of time than the role of technology and technological innovation, now and in the very near future. In some ways it is surprising to discover that there are so many advances available to us in how we do our work and lead our lives just with our existing technology, advances that had been available to us for a number of years already.

The brutal truth is that for much of this decade, the focus of technology – its innovation and our use of it – has been in the arena of social media, not in the historical realm of productivity improvement, scientific and medical advancement and quality of life. Now, technology has been moved front-and-center to the critical question of how we, the world, will move forward.

Indeed, technology will provide the some of the answers about who will live and who will die: rapid development and processing of tests, new ventilators, social distancing for vulnerable populations. What will be the impact on venture capital portfolios? Will federal and private money turn the pandemic into a “moon-shot” project, with spin-off technologies shaping the economy for many, many years to come? Will there be increased funding for R&D, as a necessary precursor to important technological innovation?

Travel and entertainment

The tragedy that was 9/11 generated for many a strong desire to “cocoon”; stay at home, do simple things, hang with family and friends. For populations having experienced months of stay-at-home orders, “cocooning” may not be the first choice in their plans for the future. It is difficult to get an accurate read on what behaviors will be if the fear of contagion can be significantly managed, reduced or eliminated, but “getting out” is probably high on the list.

This would stand to benefit restaurants, national parks, long drives to somewhere or nowhere (one’s vehicle is a mobile shelter-in-place, where one has complete and minute control of the environment, including, in many cases, a high quality HEPA air filter), and poorly performing baseball teams playing in large stadiums to small crowds.

The already competitively challenged movie theater industry will need to redouble its efforts to be relevant and profitable, although the adoption of reserved seating by many the theaters in recent years provides a platform for social distancing.

And while it is easy to imagine that no one will ever take a cruise ever again, what will meet the need of an older, physically challenged population with the money and desire to meet new and different people and visit far-flung locales? Will someone, with considerable investment, advertise smaller ships with state-of-the-art safety and medical technology – and will there be enough people to afford the price of that particular product?

Airline travel will rebound, but what will it look like? The most lucrative travel for most airlines – business travel — will be reduced for an extended time, first by the profit pressures of the recession and then by the realization that some portion of that business travel was, and is, relatively unproductive.

Video conference calls are no one’s substitute for holidays with family, but such calls could become adequate for company off-sites. Additionally, regulators or consumers or both may finally force airlines to reconfigure planes for greater distance between seats and higher levels of sanitation. The airline industry (and the FAA) may have to broaden the all-important concept of aircraft safety to include protection against germs and disease.

And what about the mass transit on which so many urban centers around the world depend? Will today’s revulsion at the thought of entering a jam-packed subway car, bus or bullet train evaporate with wide availability of N95 masks or effective treatment for COVID-19, not to mention a possible vaccine? Given the length of time it may take to develop a vaccine in which the general population can truly place its trust, a more likely near-term development will be the expansion of distributed work centers that eliminate the reliance on mass transit. The implications for office rents in urban cores are profound.

The business sector ramifications are endless and nuanced; this highlight of a few is by definition incomplete. The challenges for governments, however, are existential. The 2008-2009 Global Financial Crisis led directly into an economic expansion dominated by financial regulators, anger and rejection of central government solutions, and demographic conflict.

The Pandemic of 2020 may evolve into an economy distinguished by a shift in power to individuals and the communities in which they live, redefining the mandate for central government, especially in areas of public health, welfare and national security (with protection of health redefined as a national security issue). This exertion of power, if fulfilled, will in turn become a force with which the private sector will need to contend.

One area where the power of the economy will prevail will be in the delineation of income growth and economic opportunity. It is a sad and seeming inevitable feature of the new economy of the 2021 expansion that the divisions associated with age, education, geography and technology will be exacerbated before they are repaired.

The last jobs to be filled during the 2009-2020 economic expansion will be the first to be lost. The income maintained by those who can work at home will outpace those who cannot. The opportunities offered by industries evolving at warp speed will favor those fleet of foot and with the technology skills to keep up and to advance.

And the lives most in jeopardy are those with the thinnest social safety net. Perhaps the new-found power of the collective, stopping the virus through the personal responsibility of social distancing and supporting the community through kindness and generosity, will find a way to repair this world in the process of repairing this economy.


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Lawton Retirement Plan Consultants, LLC (LRPC) is a Milwaukee, Wisconsin-based independent, objective Registered Investment Adviser (RIA) providing investment advisory, fiduciary compliance, employee education, provider management and plan design services to employer retirement plan sponsors. The firm specializes in sustainable investment strategies for retirement plans that incorporate Socially Responsible Investment (SRI) factors and Environmental, Social and Governance (ESG) elements. LRPC currently has contracts in place to provide consulting services on more than a half billion dollars in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or or visit the firm’s website at Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

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This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, a plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges, and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.