{"id":39982,"date":"2020-04-23T14:48:24","date_gmt":"2020-04-23T21:48:24","guid":{"rendered":"https:\/\/www.enxmag.com\/twii\/?p=39982"},"modified":"2020-04-23T16:44:13","modified_gmt":"2020-04-23T23:44:13","slug":"enx-magazine-survey-examines-post-coronavirus-business-conditions","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/feature-articles\/2020\/04\/enx-magazine-survey-examines-post-coronavirus-business-conditions\/","title":{"rendered":"ENX Magazine Survey Projects Post-Coronavirus Business Conditions"},"content":{"rendered":"\n
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While the news regarding coronavirus appears optimistic,\nwith fewer new cases and evidence that containment measures are helping to\n\u201cflatten the curve,\u201d this week\u2019s ENX\nMagazine<\/em> survey of a post-coronavirus landscape indicated that it may take\ntime for pre-virus business volumes to be realized. Indeed, the impact of our\nnational shutdown could have a long-lasting impact.<\/p>\n\n\n\n

Dealers constituted the lion\u2019s share of participants once again, representing 70% of responders. Value-added resellers and remanufacturers (5% each) were the second-highest, with the balance a healthy mix of OEMs, manufacturer directs, managed IT firms and software specialists, among others.  Thirty percent of responders are based in the Northeast, with 27% in the Midwest, 21% in the Southeast and 16% in the Southwest, with the balance split among the Northwest and southern Midwest.<\/p>\n\n\n\n

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With many businesses seeing less activity, we asked survey responders \u201cHow are your employees making use of extra time?\u201d Technical training was most cited at 67%, followed closely by online learning at 65%. Performing inventories\/audits of electronic files was cited by 27%, while 17% said that they are occupied by current workloads, and have no free time.<\/p>\n\n\n\n

A number of survey takers pointed out that due to layoffs\nand furloughs, there is enough work to go around for those still active. Other\ncompanies have focused on spring cleaning, building inventories, refurbishing\ntraded-in systems and exploring ways to reduce expenses.<\/p>\n\n\n\n

With a majority of states in shutdown mode by April, we asked, \u201cWhat are the greatest hindrances to sales in April?\u201d A staggering 89% noted that customers are completely shuttered, and 35% indicated customers have mandated a spending freeze. The inability to schedule phone or video conference sales calls was cited by 24%. We gave respondents the option of citing \u201cother\u201d issues, and their answers ranged from clients wanting to wait until the crisis is over to the inability to install because customers won\u2019t allow people into their facilities.<\/p>\n\n\n\n

Value-Added\nPromotions<\/strong><\/p>\n\n\n\n

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As clients have been impacted in the way they do business,\nwe asked respondents if they were offering promotions or packages to address\nremote working needs. Sixty percent indicated they are providing work-from-home\n\u201cspecials\u201d that include hardware and software. Managed IT offerings were cited\nby 40% and security solutions were noted by 23%. Educational resources,\nwebinars and consultation services were cited by 28%. Only 9% noted they do not\nhave any promotional offerings. \u201cOther\u201d incentives included VoIP systems,\ndocument management solutions and 90-day deferred payments.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

While the eventual lifting of the quarantine, for the lack\nof a more precise description of the \u201call clear\u201d signal, will be phased in on a\nstate (or state-cluster) basis, we wanted to see what the industry resumption\nmight look like. We asked, \u201cIf the coronavirus ended today, how long do you\nthink it would take for your business volumes to return to pre-shutdown levels?\u201d\nThe most-cited choice was up to three months, according to 33%. Another 30%\npredicted three to six months, while 16% believe it could take a year or\nlonger. Slightly less than 10% believe it would return to pre-virus levels\nwithin a month, and the same amount project that we could be looking at a \u201cnew\nnormal.\u201d<\/p>\n\n\n\n

In the event of a \u201cnew normal,\u201d we asked what that might\nlook at in terms of reduced volumes. Up to 20% less volume was cited by 38%,\nwhile 22% projected up to 10% less volume. A reduction of 30% or more was noted\nby 19%, while 16% view coronavirus as an outlier with no lasting impact. On the\noptimistic side, 5% believe volumes will be increasing.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

We then asked respondents, \u201cConsidering personnel and resources, how poised are you to handle an uptick in activity once normal business conditions resume?\u201d A total of 46% believe they have a strong inventory of resources, parts and supplies. Another 25% feel, \u201cDespite layoffs\/furloughs, we should be able to ramp up quickly.\u201d The same amount of responders noted, \u201cDue to the nature of our business, we are able to respond quickly.\u201d Less than 2% feel sourcing parts may be a challenge.<\/p>\n\n\n\n

May Ramifications<\/strong><\/p>\n\n\n\n

With the shutdown looming at least midway through the month of May for many states, we asked respondents what measures they would need to take in order to offset the impact. The status quo garnered the highest total, with 68% said they would continue with existing measures. Implementing or increasing furloughs and layoffs were cited by 17%, and 16% would reduce workweeks for hourly employees. Cuts would also impact salaried and executive positions, according to 13% of responders, while 8% said they would implement or increase work-from-home practices.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The uncertainty in the market may cause many business owners\nto evaluate their long-term strategies, which could include exiting the\nbusiness. This could provide increased opportunities for companies that are\nseeking to grow through M&A. We asked respondents, \u201cHas coronavirus\nimpacted your M&A strategy?\u201d More than half (56%) counted themselves as\nM&A players, and 24% said they are not as active now. Another 19% noted,\n\u201cYes, we are capitalizing on opportunities\u201d while 13% responded, \u201cNo, it\u2019s\nbusiness as usual.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

How might customers respond to a lifting of the quarantine?\nWe asked, \u201cBased on what you’re seeing in the market, what might consumer\nconfidence look like in the first 90 days, post-coronavirus?\u201d Of the total, 51%\ndescribed confidence as moderate, with customers taking a wait-and-see\napproach. Another 21% predicted confidence would be low, with business\nextremely limited in the short term. Only 11% feel confidence will be high,\nwith brisk business resulting from pent-up demand.<\/p>\n\n\n\n

Our final question asked, \u201cAssuming a quarantine lift by\nmid-May, what impact might coronavirus have on your company’s revenues and\nprofits for the year?\u201d This produced one of the more interesting reveals, as\n68% see a decrease in revenue and profit for the year, while 32% believe it is\ntoo early to tell. No one chose the options \u201cincrease\u201d or \u201cno impact.\u201d <\/p>\n\n\n\n

Analysis<\/strong><\/p>\n\n\n\n

While it is reasonable to assume no one will emerge from 2020 unscathed by the shutdown, the 32% who feel it is \u201ctoo early to tell\u201d regarding the impact on year-end revenues and profits illustrates the uncertainty of the duration and impact of coronavirus. The numbers suggest companies are still seeking out M&A deals, and anecdotally, some dealers believe the current situation will provide robust opportunities on the backside of the quarantine.<\/p>\n\n\n\n

With 68% prepared to continue with their existing measures\nshould the lockdown continue through at least mid-May indicates many industry\nplayers have settled into the \u201ctemporary norm.\u201d Businesses are poised to resume\nnormal activity, but judging by their responses, clients won\u2019t be as active\nonce the shutdowns are lifted. That 79% of respondents believe a \u201cnew norm\u201d\ncould include volumes reduced by 10-30% or more, and 46% believe it will take\nanywhere between three months to 12 months or more for volumes to return to\nnormal, underscores the belief that the consequences of coronavirus could last\nwell beyond the virus itself.<\/p>\n\n\n\n

On the flip side, there are silver linings to the COVID-19 cloud.\nCompanies are making the most of any free time with technical training and\nlearning through a variety of means, including webinars and online tutorials \u2013\nareas that tend to get lost or deferred in the day-to-day hustle and bustle. <\/p>\n\n\n\n

Anecdotally, some chief executives have remarked how they\nhave increased their communications with employees, customers and other\nbusiness partners, which provides benefits beyond measure. OEMs and other\norganizations have chipped in to provide personal protective equipment in\nsupport of the front-line medical personnel and first responders battling the\nvirus face to face. Thus, while sales will eventually return to offset losses,\nthe notion that the industry and national community as a whole was able to\nunite in the face of uncertainty will provide long-term value that cannot depreciate.<\/p>\n","protected":false},"excerpt":{"rendered":"

While the news regarding coronavirus appears optimistic, with fewer new cases and evidence that containment measures are helping to \u201cflatten the curve,\u201d this week\u2019s ENX Magazine survey of a post-coronavirus landscape indicated that it may take time for pre-virus business volumes to be realized. Indeed, the impact of our national shutdown could have a long-lasting impact. Dealers constituted the lion\u2019s share of participants once again, representing 70% of responders. Value-added resellers and remanufacturers (5% each) were the second-highest, with the balance a healthy mix of OEMs, manufacturer directs, managed IT firms and software specialists, among others.  Thirty percent of responders are based in the Northeast, with 27% in the Midwest, 21% in the Southeast and 16% in the Southwest, with the balance split among the Northwest and southern Midwest. With many businesses seeing less activity, we asked survey responders \u201cHow are your employees making use of extra time?\u201d Technical training was most cited at 67%, followed closely by online learning at 65%. Performing inventories\/audits of electronic files was cited by 27%, while 17% said that they are occupied by current workloads, and have no free time. A number of survey takers pointed out that due to layoffs and furloughs, there is enough work to go around for those still active. Other companies have focused on spring cleaning, building inventories, refurbishing traded-in systems and exploring ways to reduce expenses. With a majority of states in shutdown mode by April, we asked, \u201cWhat are the greatest hindrances to sales in April?\u201d A staggering 89% noted that customers are completely shuttered, and 35% indicated customers have mandated a spending freeze. The inability to schedule phone or video conference sales calls was cited by 24%. We gave respondents the option of citing \u201cother\u201d issues, and their answers ranged from clients wanting to wait until the crisis is over to the inability to install because customers won\u2019t allow people into their facilities. Value-Added Promotions As clients have been impacted in the way they do business, we asked respondents if they were offering promotions or packages to address remote working needs. Sixty percent indicated they are providing work-from-home \u201cspecials\u201d that include hardware and software. Managed IT offerings were cited by 40% and security solutions were noted by 23%. Educational resources, webinars and consultation services were cited by 28%. Only 9% noted they do not have any promotional offerings. \u201cOther\u201d incentives included VoIP systems, document management solutions and 90-day deferred payments. While the eventual lifting of the quarantine, for the lack of a more precise description of the \u201call clear\u201d signal, will be phased in on a state (or state-cluster) basis, we wanted to see what the industry resumption might look like. We asked, \u201cIf the coronavirus ended today, how long do you think it would take for your business volumes to return to pre-shutdown levels?\u201d The most-cited choice was up to three months, according to 33%. Another 30% predicted three to six months, while 16% believe it could take a year or longer. Slightly less than 10% believe it would return to pre-virus levels within a month, and the same amount project that we could be looking at a \u201cnew normal.\u201d In the event of a \u201cnew normal,\u201d we asked what that might look at in terms of reduced volumes. Up to 20% less volume was cited by 38%, while 22% projected up to 10% less volume. A reduction of 30% or more was noted by 19%, while 16% view coronavirus as an outlier with no lasting impact. On the optimistic side, 5% believe volumes will be increasing. We then asked respondents, \u201cConsidering personnel and resources, how poised are you to handle an uptick in activity once normal business conditions resume?\u201d A total of 46% believe they have a strong inventory of resources, parts and supplies. Another 25% feel, \u201cDespite layoffs\/furloughs, we should be able to ramp up quickly.\u201d The same amount of responders noted, \u201cDue to the nature of our business, we are able to respond quickly.\u201d Less than 2% feel sourcing parts may be a challenge. May Ramifications With the shutdown looming at least midway through the month of May for many states, we asked respondents what measures they would need to take in order to offset the impact. The status quo garnered the highest total, with 68% said they would continue with existing measures. Implementing or increasing furloughs and layoffs were cited by 17%, and 16% would reduce workweeks for hourly employees. Cuts would also impact salaried and executive positions, according to 13% of responders, while 8% said they would implement or increase work-from-home practices. The uncertainty in the market may cause many business owners to evaluate their long-term strategies, which could include exiting the business. This could provide increased opportunities for companies that are seeking to grow through M&A. We asked respondents, \u201cHas coronavirus impacted your M&A strategy?\u201d More than half (56%) counted themselves as M&A players, and 24% said they are not as active now. Another 19% noted, \u201cYes, we are capitalizing on opportunities\u201d while 13% responded, \u201cNo, it\u2019s business as usual.\u201d How might customers respond to a lifting of the quarantine? We asked, \u201cBased on what you’re seeing in the market, what might consumer confidence look like in the first 90 days, post-coronavirus?\u201d Of the total, 51% described confidence as moderate, with customers taking a wait-and-see approach. Another 21% predicted confidence would be low, with business extremely limited in the short term. Only 11% feel confidence will be high, with brisk business resulting from pent-up demand. Our final question asked, \u201cAssuming a quarantine lift by mid-May, what impact might coronavirus have on your company’s revenues and profits for the year?\u201d This produced one of the more interesting reveals, as 68% see a decrease in revenue and profit for the year, while 32% believe it is too early to tell. No one chose the options \u201cincrease\u201d or \u201cno impact.\u201d Analysis While it is reasonable to assume no one will emerge from 2020 unscathed by the shutdown, the 32% who feel it […]<\/p>\n","protected":false},"author":166,"featured_media":39983,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1650,82,87,1638],"tags":[3801],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/39982"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=39982"}],"version-history":[{"count":4,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/39982\/revisions"}],"predecessor-version":[{"id":39996,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/39982\/revisions\/39996"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/39983"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=39982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=39982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=39982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}