Forecasting What to Expect in 2021 When There are So Many Unknowables

Famous New York Yankees catcher Yogi Berra once said, “Forecasting is very difficult, especially when it’s about the future.” Yet another wise saying from one of history’s most quoted sages. Even so, lately many regular Strata-gee readers (some of my favorite Strata-gists), have been asking me to do just exactly that – predict the future.

That is such a risky business…only a fool would take such a challenge.

See this fool’s forecast for 2021…

So before I embarrass myself with this exercise, let me mention a couple of other famous quotes about forecasting that I think are also appropriate. The first is from economist, John Kenneth Galbraith, who once said, “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.”

Or how about this one, from renowned business investor Warren Buffett, the Oracle of Omaha, who once said, “Forecasts usually tell us more of the forecaster than of the future.”

A Good Forecast is Less Bad

I’ve often said this of the annual business planning process, which invariably requires forecasting the future – although I don’t believe anyone has ever quoted me on this. In my opinion all forecasts are wrong. The really good forecasters offer forecasts that are less bad.

Forecasts create the mirage that the future is knowable…”

Peter L. Bernsetin, financial historian

With that in mind, let me say this about this particular post, I am not offering up these thoughts about 2021 as something you should necessarily rely upon as you plan your business and deploy your resources for this year. There are in fact so many unknowables, that it is impossible to know with any certainty how we’ll feel about the next 11½ months until after we’ve experienced them.

So this will be a discussion of some of my observations and what they may suggest. You are free to agree or disagree, and I hope you will share your thoughts – and your prognostications – in the Comments section below this post.

2020: A Year of Transition – From Normal to the Depths of Hell

So I wrote recently that 2020 was a year of transition. As we entered the year in January, we were all blissfully unaware of what was already brewing in Wuhan, China. In just a few short weeks, we would come to realize we were in the midst of a global pandemic that threatened our economic lives…and our physical lives. Many I spoke with during this time of growing awareness – in roughly the February/March time frame – spoke with a lot of fear in their voice.

In just a couple of months, states were issuing stay-at-home orders and shuttering, at least initially, all businesses. Gradually, residential technology integrators were deemed to be “essential workers” and we began to realize that – in this pandemic – technology would improbably be one of the winners…while others, such as restaurants (estimates are that more than 100,000 restaurants have closed permanently nationwide), movie theaters, travel-related businesses, and exposition companies would see their businesses severely damaged…if not destroyed.

Of course the human toll is all the more shocking. As of this writing, where we are now firmly in the grips of a second wave of COVID, more than 24.5 million Americans have been infected with COVID and more than 400,000 have died from this pandemic. Worse: the pace has seemed to pick up lately, with as many people who died on 9/11, now dying of COVID…EVERY DAY. It is hard for me to wrap my head around this fact…

But for Tech, the fact that more people were forced to spend more time at home, worked to our advantage. Many, many consumers – now working full time from home, with kids who are now learning full time from home – quickly realized that their home systems were not up to the task with such heavy full time usage by multiple family members.

Many others also recognized that their systems needed updating – whether for better performance…or to be more entertaining. We were ready to help out and equipment sales and project counts skyrocketed. It was a small but meaningful silver lining on very, very dark clouds.

So I offer the following points of prediction or observations below. I will number them only to facilitate reference, they are not in any sort of order of priority. Take them with a grain of salt.

P1: 2021 Will Also Be A Year of Transition – From the Depths of Hell to ‘New’ Normal

So I guess my first prediction about 2021 is that it will also be a time of transition. This time, we will be making a much more positive one from the depths of Hell to a “new” normal. We finally are turning an important corner on the pandemic front. Thanks to some incredibly innovative science and the amazing work of scientists around the world, multiple companies have developed vaccines that we are only now beginning to deploy. Vaccines, largely shown to be 90-95% effective, are our next best tool to reach herd immunity and “flatten the curve” which has recently turned incessantly upwards.

Still, the reality is that for many months, nothing or little will change on the pandemic front. The fact is that it will take time to vaccinate millions or tens of millions of Americans. Yes, President Biden has set a goal to vaccinate 100 million Americans in his first 100 days, but many are skeptical that this goal is possible.

It likely won’t be until the third or fourth quarter before enough Americans are vaccinated to allow state and local governments to begin a more substantial reopening of businesses and a relaxation of rules governing mass in-person events.

So there is a light at the end of the pandemic tunnel, but until then, things will stay as dark as they are now for many more months.

P2: Remote Workers…er…Work; The Emergence of a New Hybrid Company Structure

One comment that I heard over and over again from business owners and managers is that they were surprised…even shocked…at HOW WELL a remotely deployed workforce actually worked. Many a company discovered that not only salespeople, but also a lot of operational positions worked fine through a remote workforce, as long as they had a computer connected to company systems, and a telephone.

In fact, recent studies have shown that by removing the typical distractions of large central offices – interruptions, gossiping, water cooler conversations, impromptu meetings, employee drama, etc. – remote workers were actually MORE productive and worked LONGER hours. As a result, many companies have told me that they are actively studying leaving many of these remote positions as permanently remote.

This makes a lot of sense on a couple of fronts. First, by reconfiguring your home office to only house those workers essential to in-person tasks, such as shipping/receiving, for example, companies could reduce the size of their facilities saving them a lot of money. And at the same time, many employees prefer to work remote…so it is a win/win for everyone.

As an alternative, the company could move to more of a hybrid approach, in which workers would work, say, three days in the office and the rest of the work week remote. The workforce would be divided up so that this shifted on different days and the office would maintain a relatively modest general office space with generic workspaces used on a rotating basis.

P3: Losing the Wind in Your Sails

P2 notwithstanding, as the pandemic recedes and companies begin to transition remote workers back into their central office locations, custom integrators may see a noticeable drop in the wind in their sails driving their business. It is true that while many companies are considering keeping many of their staff remote – others are firmly determined to bring all their chickens home to roost.

I have definitely spoken with managers who feel – data be damned – that their teams are more productive when they are in the central office with all possible resources they need at their fingertips. Some say innovation is facilitated by the easy interaction of teams “brainstorming.” Yes, you can brainstorm over Zoom, but some feel that in that case, technology gets in the way.

The downside of that is there will be less demand for home system improvements or upgrades as workers – now no longer remote – rely less on them…and more on company provided technology and resources. In the same vein, as schools reopen – one of President Biden’s top priorities according to recent news reports – there will also be less demand for more robust learn-from-home or LFH systems.

The effect of this will be more acutely felt by residential-only integrators as compared to those who also do commercial installations. But nonetheless, there is likely to be a little less tail wind driving your sales as the country recovers from the pandemic.

P4: Online Shopping Will Remain a Big Post-Pandemic Winner; Retail Needs a Reinvention

Certainly one of the most enduring realities to come out of life during the pandemic is that more and more Americans resorted to buying goods online. This includes some who in the past, like older consumers for instance, had resisted online purchasing. With local retail locations closed, some goods…including staples like groceries…could only be purchased online.

Many found online purchasing convenient and either increased the amount of items they purchase online, or in the case of those who had been previously hesitant, now will become regular online purchasers. While Amazon was the major beneficiary of this trend, they were not the only beneficiary – Walmart, Target, and Best Buy all saw major surges in their online shopping.

This will put pressure on retailers to reinvent themselves to add further value to motivate shoppers to come back into a retail location. Best Buy has successfully experimented with a new concept in retail – offering options for both purchasing and receiving goods. Consumers could conveniently purchase items online or in-store. Best Buy locations during the pandemic were controlling the number of customers in the store at any one time to protect all. Customers had the option of having someone help them…or to serve themselves.

Similarly, Best Buy was committed to delivering the purchased goods anyway the consumer wanted to obtain them. Items purchased online could either be picked up in store at a special counter, or picked up via contactless curbside delivery. Or the company would deliver the item to your home. To reduce shipping times, the company began shipping items from their stores to local addresses and even facilitated low-cost same day delivery.

I believe we will see more ideas and innovation as retailers look to find ways to woo consumers back to an in-person experience.

P5: You Will Be Increasingly Impacted by Industrywide Parts Shortage

The top story of the year on Strata-gee in 2020 was my report written in November on a major fire in the Asahi Kasei Microdevices (AKM) factory in Nobeoka City, Japan. So far, it is the top story this year as well. In that story, I warned that the destruction of this factory was likely to have an impact felt far and wide in the industry, disrupting the supply of many key digital products.

Perhaps, at this point, you have not felt any constriction yet in your supply chain. But that doesn’t mean it isn’t coming. I’ve already reported on Sony announcing product supply interruptions in their digital imaging line as a result of the AKM fire. This is likely just the start of it.

Keep close with your supply chain on this topic, it will likely get far more acute in 2021.

Do You Agree? Or Am I Full of Crap?

So these are some of my top line forecasts for 2021. What do you think? Do you agree with these predictions? Or am I full of crap? Let me know your thoughts on this post…and share what you see coming in 2021 in the Comments section below.