What we’re seeing

• A parabolic curve of productivity for remote work, with efficiency and morale growing initially and then declining. A new OECD study identifies a “sweet spot” for home and office that employers need to find.¹
• Friction between employers and employees over terms and conditions of remote work. Half of employees now working from home expect to maintain at least a hybrid model, while far fewer employers want to continue with current arrangements.²
• A growing gap between organizations and their ability to manage distributed workforces. Some 48% of Canadian businesses feel they are unprepared for the technological changes forced by COVID, including their ability to support remote work over the long-term.³

What this means

• Blended models of home-offices and office-homes, requiring employers to invest in distributed tools and technologies to retain talent and enhance productivity.
• New agreements between employers and employees to share costs and benefits of home-based work models.
• More workplace PPE and office reconfigurations to accommodate more flexible work arrangements.

+ Up

• Remote technologies. Cloud security, video conferencing, chat platforms.
• Home/office technologies. Smart speakers, laptops, fitness equipment.
• Distributed service providers. Neighbourhood childcare, home cleaning, food delivery.

– Down

• Meeting centres, banquet services, business hotels.
• Food courts, public transit, fitness centres.
• Photocopiers, paper, A/V devices.

What we’re seeing

• Mass acceptance of online shopping and shipping, including for “soft” goods such as groceries and pharmaceuticals. Nearly 3 in 10 Canadians are now shopping online for things they normally bought in stores, and nearly half placed an online order for pick-up.⁴ In the U.S., more than two thirds of consumers purchased products online for the first time and over half are spending more online.
• A blended model for pick-up to cut delivery costs. More than half of consumers have used “Buy Online and Pickup in Store” models. BOPIS has grown more than 500% during the pandemic, and accounted for 42% of orders in June, double what it was 2019. ⁵
• Consumer spending hasn’t declined; it’s just shifted. Canadians spent 3% more this July than last, with increases in food, home improvements, golf, lotteries and hobby stores. In-person entertainment, concerts and restaurants remain challenged.⁶

What this means

• Brick-and-mortar business models, including malls, will remain challenged. This may extend to grocery models that don’t focus on consumer experience and neighbourhood convenience.
• Consumer loyalty is in play. In the U.S., 36% of consumers have tried a new product or brand over the course of the crisis.⁷
• Retailers and brand companies will need to invest more in data analytics to connect with shoppers before they begin shopping, and to improve the consumer experience.

+ Up

• E-commerce platforms and aggregators.
• Blended delivery and pick-up models.
• Online loyalty models.

– Down

• Department stores.
• Secondary and tertiary malls.
• High-density commercial property.

What we’re seeing

• Shift to at-home entertainment. Nearly half of Canadians say they won’t go to an arena, stadium or concert venue until there’s a vaccine. Netflix added 26 million subscribers globally in the first half of 2020.⁸ Disney+ reached 60 million subscribers in Q2, four years ahead of plan.⁹
• More interactive. Time spent on video gaming increased 39% during shelter-in-place periods. Fortnite embedded a Travis Scott concert in a video game that attracted 12.3 million viewers.¹⁰ Amazon’s live platform Twitch saw a 60% increase in hours watched (5 billion total) in Q2.¹¹ Facebook’s actively monthly users rose 12%, to 2.7 billion.
• Culture has moved online; ticket sales haven’t. Royal Ontario Museum expects in-person visits to be down by half in 2020. British Museum went from 2,000 daily online visits to 75,000. U.S. museum traffic was up 20-50% when tickets were subsidized.

What this means

• Personalized arts and entertainment content will become more important, along with recommendation engines and targeted advertising.
• Arts and culture providers will need to develop new immersive experiences. Sales of AR/VR headsets are projected to grow nearly 25% in 2020, and 10-fold over five years.
• Professional leagues and teams will need to accelerate their “augmentation” strategies through gaming and streaming, including from fan-less venues.

+ Up

• Global streaming platforms.
• Star performers and athletes with global followings.
• Virtual and augmented performances.

– Down

• Museums, art galleries.
• Sports arenas.
• Cinemas.

What we’re seeing

• Massive growth. Global internet traffic increased nearly 40% between February 1 and April 19.¹² Data creation will grow to 175 zettabytes by 2025, 10 times the amount of data produced in 2017.¹³
• Massive concentration. Market cap of the Big Five U.S. tech companies – Apple, Amazon, Microsoft, Alphabet and Facebook – was roughly US$7 trillion in early September, up 50%+ in the crisis.
• Massive risks. Active phishing sites went up by 350% between January and March, as individuals interacted with connected devices, on average, five times a minute. Over 1,000 “malicious imitation” websites were taken down by the Communications Security Establishment, most of them claiming to be the CRA or connected to CERB.¹⁴

What this means

• Greater demand for data services, data strategy and connectivity (Internet of Things) strategies.
• Large investments in bandwidth, especially for smaller centres and older multi-tenant buildings.
• More flexible approaches to privacy to balance safeguards against new and existing threats.

+ Up

• Cloud security.
• Business continuity planning.
• Distributed software protection.

– Down

• Communities without strong and consistent bandwidth.
• Businesses without resilient platforms to support remote work and sales/service.
• Companies that can’t capture and analyze consumer data.

What we’re seeing

• A collapse of international travel. Global flight frequency was down 47%, year over year, as of late August, and not projected to return to pre-crisis levels until at least 2024. Overseas visitors to Canada dropped 95% from Q1 to Q2.¹⁵
• Tourism spending fell 14%, while tourism GDP decreased nearly 15% in Q1.¹⁶
• Canadians say they are significantly less likely to travel to other provinces, with 63% preferring to drive than fly. Only 32% are willing to stay in a hotel or resort, and 10% to take a cruise.

What this means

• Staycations. Strong growth in recreation product sales (trampolines, pools, bikes, snow equipment).
• Road trips. Growth in real estate sales and rentals in small centres within driving distance of large cities.
• More demand for localized adventures and experiences. Less for festivals, events, and major attractions.

+ Up

• Home-based recreation equipment.
• Wilderness experiences and agro-tourism.
• Rural rentals.

– Down

• Large hotel complexes, cruise liners.
• High-volume destinations.
• Cross-border communities.

What we’re seeing

• Public health security as a dominant concern. Three out of four Canadians said they won’t feel safe until a treatment or vaccine is available.¹⁷
• More remote delivery technology. Patients and professionals have come to accept, at scale, video consultations. Telehealth expected to exceed US$175 billion globally by 2026.¹⁸
• Long-term care as a focus for heath budgets. By 2030, Canadian government spending on elderly benefits will triple to $99 billion, from $35 billion spent in 2010. The U.S. “active aging” industry is expected to triple in the next three years to US$30 billion.¹⁹

What this means

• Health and screening tech set to grow rapidly, especially for work and consumer settings, e.g. thermal cameras for airports and train stations, biometrics for offices, malls and schools.
• Centralization of clinics for digital capacity and 24/7 service, with field teams to serve work-from-home populations and isolated seniors.
• Increases in telehealth, e-prescription, at-home solutions, and other alternative delivery methods of healthcare.

+ Up

• Smart-living technologies, home testing kits.
• Facial recognition technology, infrared body scanners.
• Contact tracing technologies.

– Down

• Traditional seniors’ communities.
• Healthcare providers without a digital-first culture and infrastructure.
• In-person consultations for minor or routine issues.

What we’re seeing

• Fewer international students. Globally, as many as 5 million international students could not return to campus this fall. In Canada, they represent a quarter of many student bodies and $22 billion in economic activity.
• More online learning. Traffic in June for Massive Open Online Courses (MOOC) was 2.5 times larger than January.²⁰ Canada’s largest online-only school, Athabasca University, saw April enrollment grow by 12.3% for undergraduates and 10.7% for graduate studies.
• More education technology and corporate learning management systems. In 2019, digital spending was 2.5% of all education budgets. By 2025, it’s expected to reach 4.3%. Ed tech investments surpassed US$18.5 billion in 2019, with more than half venture capital activity occurring in China over the last decade.²¹

What this means

• Transformation of post-secondary education to a hybrid model, with a blend of traditional course design and pedagogy with interactive and personalized online offerings.
• More global learning platforms, with more new education providers, including companies with subject-matter expertise.
• More employers turning to colleges and universities to develop micro-credentials and online courses, to train and upskill workers.

+ Up

• Menu-based degrees, with more transferable credits.
• Corporate learning management systems.
• Digitally-augmented internships, coops and apprenticeships.

– Down

• Schools with weak digital teaching capabilities.
• In-person international student enrollment.
• In-person corporate training.

What we’re seeing

• Less global trade, with merchandise trade dropping 15% in Q2 year-over-year, although container shipping picked up through the summer. WTO’s services trade barometer hit a record low on September 17, with financial services the only bright spot.
• Growing pressure in North America to reduce China trade, even as it increases through the pandemic. Canadian imports from China grew 33.7% from February-July 2020, while exports to China rose 20.9%, while trade with Europe and the U.S. was relatively flat.²³
• Increased focus on technology as a strategic priority and more government interventions, e.g. TikTok and Huawei cases. China appears to be pivoting inwards with a “dual circulation” strategy to develop domestic tech. China’s inbound FDI was up 18.7% in August over 2019, as global investors looked for growth opportunities.²⁴

What this means

• Increased focus on economic nationalism and supply chain resilience, which can be two sides of the same coin. Japan, India and Australia are trying to repatriate factory production from China; South Korea and Taiwan have increased IP protections.
• Strategic stimulus. As governments look to re-engineer supply chains and support national production, they may use new policies, including border carbon taxes, to limit purchases from foreign suppliers.
• More “Buy Local” initiatives. Governments have launched campaigns in Ontario, B.C., Quebec and Ontario. Nearly 80% of Canadians say they’re more likely to choose Canadian brands/products.

+ Up

• Strategic procurement.
• Regional trade agreements.
• National technologies.

– Down

• Foreign procurement.
• Low-cost, carbon-intensive consumer goods.
• International air freight.