While the site selection industry is constantly evolving, no one anticipated the changes that COVID-19 would bring in 2020. COVID-19 has impacted what types of projects are in the marketplace and how executives, consultants and economic developers are adapting the site selection process. This article will explore some of these changes and offer some practical advice for economic developers as they adjust to the new normal.
When COVID-19 hit the U.S. in early March, SSG saw an initial dip in activity as companies reacted to uncertainty in the market and rapidly changing consumer trends. Most executive teams that had active projects were in firefighting mode, trying to change their business models to allow for best practices with COVID-19, transitioning employees to remote work environments, establishing new customer interface protocols, etc.
Even though uncertainty loomed, most executives were confident that their projects would continue once there was more clarity. One major anomaly during the downturn was food and beverage manufacturing projects. SSG’s pipeline was and still is dominated by heavy investments in the food and beverage manufacturing industry. Companies that were experiencing growth pre-COVID-19 saw increases in demand and are transitioning facilities to accommodate new customer buying habits. By June, overall project activity somewhat rebounded, but approvals for large capital expenditures were still delayed.
SSG believes there will continue to be opportunities in the food and beverage industry. We also foresee significant investment within the varying components of supply chain logistics, as detailed below:
Retail & E-commerce
Supply Chain Diversification
Office space dynamics
There is no crystal ball for the future of office space dynamics, but there will certainly be big changes. These changes will likely be regionally specific. For example, the impacts will be drastically higher in large metro areas like Manhattan or Washington D.C., where so many rely on public transportation. These impacts may be less dramatic in cities like Nashville, where employees are accustomed to driving themselves to work. Transitioning remote workers home for the long-term has also presented logistics issues, security breach risks and impacted productivity.
Some specific office changes will likely be a shift away from large common office space areas and hot desking (where workers take whatever desk is available). Many corporate offices recently invested millions in this type of set-up, only for the newly renovated space to seem outdated with new COVID-19 risks. SSG hypothesizes that there won’t be a mass exodus of companies leaving Manhattan or large metro areas to smaller, more rural areas. Rather, companies may set up hub-and-spoke models where there is a central hub for things such as employee training and events with smaller offices in the submarkets to lessen the exposure their employees have to mass transit systems and common area spaces.
How are economic developers adapting?
Understanding now some of the emerging trends on the corporate side, SSG would like to offer some practical advice for economic developers to adopt as they evolve with the industry.
Since virtual site visits can have such a large impact on the final decision, it is important to execute them well. It is also a great opportunity for rural markets to make the “short-list,” where they may have otherwise been cut for cumbersome site visit/tour logistics. Below are a few steps to help present vivid, professional and memorable virtual site visits.
Tips for a successful virtual site visit
While consultants likely won’t ever use virtual site visits to select a final site, the virtual world will continue to play a more dominant role in the site selection process. Consultants and economic developers will continue to evolve together, spurring innovative techniques to improve the site selection process. Hopefully the tips above and insights into the broader site selection industry can help you calibrate to the new normal.