…50 percent of something is better than 100 percent of nothing
Business owners lament each day they are unable to open; it means more losses. And, they are correct. But, the crisis is not one-sided. All the businesses in the world could be open, but without customers, what’s the point? Just opening doors is not the end of the nightmare, it is just the beginning.
Stores and shops must invest in encouraging timid former consumers to come out and spend money. Lockdown showed many people the things they can live without. Someone used to buying fresh bread every day learned to make their own. Some who thought they needed to be out with friends every weekend, see that this is not necessary to have fun. People who liked going to the movies every month have been viewing movies for free for weeks. Those who liked to sit in cafes to eat a nice breakfast on the weekends have been doing fine sipping tea and eating toast in their own gardens.
For commerce to happen there must be customers. For example: consider the re-opening the Single Quarters informal meat market. What is being done to make sure customers go there as they did before? It is the informal business clientele that is hardest hit by COVID-19 layoffs, salary delays, and cuts. Do their customers have money to spend?
The first step to boosting the critically ill Namibian economy is incentivizing people to spend at all levels. Stop them from stuffing their money under mattresses (figuratively speaking). Potential customers need to be unafraid of becoming consumers again. And, that will take time. Everyone is wondering if they will have income tomorrow. It is hard to plan a trip to Etosha if you aren’t sure if your car will be repossessed by the bank.
This pandemic exposed how fleeting life can be. Tough choices will be made everywhere. Some businesses have seen that they can run satisfactorily with 10 staff instead of 18. Job cuts are coming; salary reductions are coming. The Ministry of Labour has no capacity in the short or medium-term to do battle for the tens of thousands who will lose jobs or face illegal salary cuts. They are too engaged in pushing the deluded fantasy that they can stop wholesale retrenchments when the lockdown is over.
While businesses and offices are preparing to open, money needs to be spent to lure people out again. The confidence of shoppers needs to be nurtured. Where are the half-price sales? Where are the advertisements for entertainment events to encourage public confidence?
The banks are making billions as usual. They will not significantly help struggling businesses to survive. They will be around during and after the Great Depression that is coming and they know it. The government must find a legal way to force them to use their profits to do generic ad campaigns to get people to go to the movies again. They must do ads to urge people to go out for a cocktail or coffee with friends. These general ads must encourage people to start buying towels, sheets, and blankets again. Let them back domestic tourism by urging people to take a weekend away to get ready for the tougher times that are to come soon.
Businesses out there – in the short term, drop your prices – not 10 percent, but half price! It will hurt. But you are hurting now anyway. Half of something is better than all of nothing. Lure the people out of their holes and into your business.
Managers and owners are desperate to make up their losses immediately. Many wrong-headed owners will INCREASE prices after lockdown deluding themselves into assuming that pent up demand will burst forth on May 5th. This is a dangerous fantasy. Why would people pay more for the same old products? Uncertainty has its death-grip on credit and debit cards in Namibia.
Businesses must find new strategies. The weak will fold or merge and the strong will last a bit longer only IF they are smart and lucky.
For the economy to reset, people need to be encouraged to consume again. Let businesses focus not just on re-opening, but igniting demand.