Thinking Ahead About Maine’s Online Economy
It’s Noisy Out There
Watching the news will lead you to believe that all companies are either on their last legs or thriving through the pandemic-altered economy. There are plenty of winners and companies soon to be no longer in business, but the vast majority of businesses are currently operating somewhere in between these extremes. We don’t hear about them, because news of everything being ok wouldn’t get eyeballs or clicks. Keep this in mind as our economy continues to be heavily politicized.
Looking forward at the holiday season, we expect the big winners to experiment with this, iterating new content and promoting it (think: boosted posts, A-list influencers) to grow their market share and price out their competitors’ paid search bids. At least a few brands will be treating Black Friday as a “now or never” event, pushing big deals in order to generate revenue to make it through the end of the year.
But most brands are in-between and their holiday season offers will be cautious and value-driven. People will shop albeit more online, with Adobe expecting two years’ worth of online sales growth this holiday season. As consumers, we will support our favorite local businesses by buying gift cards or booking experiences for 2021-2022.
To our friends with businesses in Maine:
We see a variety of reasons to be optimistic about your future prospects.
- Tourism will come back. Some summer days the Portland waterfront looked busy enough to be a “normal” year (except for the masks and closed lanes to allow for additional outdoor seating at restaurants), but the lack of cruise ship visitation, fewer visits from southern states, and the closure at the Canadian border left a larger void than potential increases in local visits could make up. All predictions at time of writing this expect a Covid vaccine to arrive during the first two quarters of 2021 if not sooner. We expect the pent up travel demand to produce a strong 2021 travel season, regionally if not internationally. Some local businesses will change hands, but their new owners will have a post-Covid offering in mind, positioning themselves and the city at large to thrive.
- Southern Maine continues to outpace national housing trends.
- Portland home sales have averaged six days on market in September 2020 vs nine in September 2019.
- In August, Maine home sales averaged a 17% price increase over the previous year.
- The best parts of Maine – our epic coastline, beautiful lakes, mountains, lobster rolls, fresh air, kind people looking out for one another – aren’t going anywhere. The influx of remote workers to Maine’s economy will boost tax revenues and local expenditures, and their arrival represents the growing crowd of people who want balance, personal space, and access to the outdoors as part of their forward thinking lives.
- Quick Shifts To Ecommerce
- We’re proud of our fellow Maine based businesses on their nimble adaptivity. The city transformed to be more digitally native over the past few months with QR codes replacing menus in restaurants, curbside pickup available for online orders, and new websites for long time brick and mortar businesses. As more businesses open, we hope their growth is bolstered by the work they’ve put into creating a digital presence that can compliment their storefront.
- The opening of Northeastern’s technology campus in Portland also represents a shift towards future thinking businesses and Mainers. We can’t wait to see what companies are launched here in the next few years.
VC Cash Flows and Capitalization
Across most of the country in the 2000’s, it has been trendy for companies to grow for growth’s sake, even without profitability. Many of the “pre-revenue” businesses expected to scale to profitability over the next few months during the Covid climate are going to struggle to get out from under a pile of debt. Maine has wisely ducked under this trend. Many of Maine’s businesses have grown sustainably and expanded from revenue, not outside debt. That leaves credit lines available if they’re needed, and a better cashflow position to take a hit and ride out a tough time. Business owners we’ve talked to over the past few years have had a greater understanding of the risk that comes with taking on more debt, and at time of economic volatility and uncertainty that risk that they have avoided becomes an asset.
Maine’s tradition of responsible growth runs contrary to companies like Quibi. Quibi identified a real opportunity: people are spending more time at home consuming content, more time on mobile devices, and streaming services are thriving. The company raised a quick 1.75 billion dollars to develop phone-specific, short-form episodic programming. They saw a quick jump in users but couldn’t sustain that growth or achieve corresponding revenue gains to push through their first months of operating. The company, and all that money they raised, are now quickly fading. Don’t be like Quibi.
Let’s Look Forward Together
Our team of strategists would be happy to go over your plans with you to assess your 2021 marketing plan’s risk level or identify new opportunities. Send us your info and we’ll book a free call.