COVID-19

How the pandemic is creating a “low-touch” economy

Kimberly Adams Jul 10, 2020
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The entry area of the Akwaaba D.C. bed and breakfast. Usually the inn would be booked solid this time of year, but few customers are visiting during the pandemic. Kimberly Adams/Marketplace
COVID-19

How the pandemic is creating a “low-touch” economy

Kimberly Adams Jul 10, 2020
Heard on:
The entry area of the Akwaaba D.C. bed and breakfast. Usually the inn would be booked solid this time of year, but few customers are visiting during the pandemic. Kimberly Adams/Marketplace
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COVID-19 cases are on the rise, and communities that were on a path to reopening their economy are now facing renewed shutdowns and restrictions. For those businesses that can remain open, they are experimenting and adapting their operations to respond to the needs of the socially distant and “low-touch economy” of the pandemic. 

For some companies, that means contactless deliveries to customers or having employees work remotely. The first thing that had to change at the Akwaaba D.C. bed and breakfast to adapt to the low-touch economy was the welcome ritual, said owner Monique Greenwood.

“We’re accustomed to hugging people, you know,” she said of visitors to the Victorian-era townhouse in Washington, D.C.’s Dupont Circle. “When guests walk in, we greet them with a warm hug and it’s all love, and now to have to be at a distance is difficult.”

Akwaaba D.C. bed and breakfast in Washington’s Dupont Circle neighborhood. (Courtesy Akwaaba)

She’s made other changes to adapt to the times. On-site staff regularly wipe down surfaces, keeping an eye on guest movement to see what gets touched. Communal hors d’oeuvres and dinners in the formal dining room have been replaced by in-room dining and snack baskets. Extra towels and sheets are placed in the eight literary-themed bedrooms at the beginning of the stay to limit anyone entering a room to clean. 

Monique Greenwood, owner and CEO of Akwaaba Bed & Breakfast Inns, has had to make changes to her business during the pandemic. (Courtesy Greenwood)

But the lack of touch can have broader business implications, according to Andrea Luangrath, who teaches marketing at Iowa University’s Tippie College of Business

“In business, [touch] really helps foster relationships. So even if you’re just engaging in a handshake or in kind of unobtrusive touches, like on the upper arm, this fosters connection with other people,” she said.

Luangrath said research supports the idea that touch can help boost the bottom line as well. 

“So if a service provider touches a customer, we know things like they are more likely to buy your products, they’re more likely to just sample and try your products.”

The pandemic is forcing touch-dependent businesses to adapt, said Jennifer Tsitsopoulos with the Board of Innovation, a consulting firm advising companies on the transition.

“The service sector has been one that has moved the quickest,” said Tsitsopoulos, “mostly because those have been smaller, more nimble businesses who have been able to pivot and come up with creative solutions, because they’ve needed to.”

Restaurants have adjusted their layouts and hair salons are implementing staggered scheduling. Akwaaba D.C. owner Monique Greenwood runs four other inns along the East Coast, all pretty small with few staff on site. 

“And we do think that that gives us an advantage, because there’s not a lot of people in and out of the lobby where they have to worry about their ability to social distance,” she said.

That was the lure for actress and producer Sheryl Lee Ralph, one of the recent guests at Akwaaba D.C. She was in the city working on her next directing project and was sharing the eight-bedroom inn with just one other guest and the innkeeper. 

“I chose this space, and it was the right space for me because I’m not around a whole lot of people,” said Ralph, “and whether I can control it or not, I feel as if I have a bit of control of my surroundings.”

Tsitsopoulos at the Board of Innovation said more businesses will have to shift to “boutique” or exclusive experiences, targeting the customers willing to pay for that control over their surroundings even after the pandemic ends.

“So if you have the money, you can book out the whole salon for yourself and have this still high touch in a low-touch economy experience,” she said. The trend could extend to other businesses that usually encourage crowds, like movie theaters. “Being able to have these smaller pod rooms where you can book out the entire cinema for you with your closest friends or family to still enjoy that night out, but be confined to a smaller group setting.”

But that’s if someone has the money to pay for these kinds of experiences. With tens of millions of people out of work and services getting more expensive as businesses adapt to the risk of COVID-19, Tsitsopoulos said this pandemic may push the haves and have nots of this economy even further apart.

COVID-19 Economy FAQs

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

How long will it be until the economy is back to normal?

It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.

How are those COVID relief payments affecting consumers?

Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.

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