Change is on the horizon
We have been back in NYC this week. My entire disposition changes when I am here. I have not put on a pair of sweatpants which I admit feels insanely good
As the vaccines roll out, there is a feeling in the air that the shroud is slowly being lifted. Businesses didn’t stop, but this time has given everyone the ability to reflect on their models. It is clear to me that Covid has accelerated where we were already going.
Walking through the streets of NYC is upsetting on the one hand yet exhilarating on the other. It yells opportunity everywhere, particularly at street level.
What will restaurants look like but more important is how will their business model change? Before Covid, it was getting harder to make ends meet. Over the past 10 years, it has become more difficult as laws have changed.
The cost of real estate, the cost of healthcare, the cost of minimum wages rising made a massive impact on the bottom line. Now real estate prices are going down, QR codes have changed ordering, and landlords are changing leases connecting them to a percentage of gross revenue instead of a monthly check. That creates a partnership between landlord and tenant. They then value each other. That’s good for all of us.
How about the retail stores? Large department stores are taking out debt again to reopen with less physical spaces. Are there any new ideas? I have not seen a change at the top, so unclear. Once in a while, someone makes a bold move (one that probably should have been done a long time ago), and I get excited because my gut is we are going to see more retail companies jump on the bandwagon.
Net-A-Porter made a deal with Prada. Going forward, Prada will carry the products and drop ship to Net-A-Porter customers. Shifting the distribution channels is game-changing. The brand owns its inventories, not the store. Net-A-Porter would make a commission on each sale. If this would happen with any store, it changes the bottom line and puts the onus on the brand.
There are going to be massive changes because it wasn’t working before. We need to change. Change includes having companies be more inclusive and diverse from the top down. It is time and that must be the biggest change of all.