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Businesses Look to 2021 with Pandemic Lessons in Mind

SBJ Economic Growth Survey: View from the Top

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As industries prepare to turn the page on a long and challenging year, executives at local small and big businesses say they are counting on metrics to guide them into 2021.

Several company leaders participated in a pair of panel discussions as part of Springfield Business Journal’s Dec. 16 Economic Growth Survey Forum: View from the Top. The participants shared lessons learned and changes implemented amid the coronavirus pandemic, and they provided an outlook on concerns and external factors heading into next year.

Stacey Zengel, a vice president at Jack Henry & Associates Inc. (Nasdaq: JKHY), says the publicly traded Monett-based financial software firm always studies monetary metrics. It reported $91.2 million in quarterly net income to start its fiscal 2021, a 2% year-over-year increase, according to an earnings report. However, Zengel says a significant consideration connected to the financials is the well-being of company staff.

“Something we’re really monitoring very closely is employee mental health and how they’re doing through the pandemic,” he says. “Our pillars are always if you take care of your employees, they’ll take care of your customers. You take care of those two things, they’ll take care of your financials.”

Zengel, who also is president of Jack Henry Banking, the firm’s banking information processing division, says around 94% of the staff is working from home. What the work environment will look like moving forward and how many will return to the office have yet to be determined, he says.

“It has to be fluid with the status of the pandemic,” he says. “Hopefully, if things turn north like we think they are, we’ll be able to make those decisions pretty quickly.”

External factors
Both Zengel and Jay Holden, global marketing manager with international stainless steel manufacturer Paul Mueller Co. (OTC: MUEL), point to unemployment numbers as a key metric their companies watch to attract new talent. The Springfield metropolitan statistical area’s unemployment rate was 3% in October, while the Missouri jobless rate was 4.6%, according to the U.S. Bureau of Labor Statistics.

“There’s so much change occurring right now, and you do have to maintain awareness of it,” Holden says, noting Mueller Co. focuses much of its external dashboard time on industries it serves, such as food, beverage and pharmaceutical. “Watching what consumers are doing with those end products is something we really keep a close eye on.”

For Brina Thomas, co-owner of clothing and home accessories retailer Five Pound Apparel, decisions on what products to carry remain tied to forecasting trends. However, a greater shift to e-commerce is in the plans, she says.

“We never plan to fully go online and (not) have a physical store. We feel the in-store experience is so important for retail,” Thomas says. “It definitely will for us be shifting that balance, making sure we have the majority of our products online but still having unique items that you can’t find online.”

That shift is largely tied to Five Pound’s e-commerce sales this year, which Thomas says are up 350% year over year. She estimates it will comprise roughly 21% of total sales, well over its 4% average the past three years.

“During the shutdown, we had to get everything we possibly could online so people could still shop,” she says.

It’s not just a local trend, as the National Retail Foundation forecasts holiday online sales in November and December will exceed $200 billion, an estimated 20%-30% jump from $169 billion last year.

Curbside service, family-sized meals and taking outside orders on iPads are part of the pivots Mexican restaurant Tortilleria Perches made in the spring, says Manny Torres, catering manager. Still, co-owner Jesus Perches says sales are down about 60% since the pandemic started.

“A large portion of that is because costs have risen to provide safety to our customers and meet Health Department guidelines,” Perches says, noting the eatery’s investment included tamper-proof bags, sanitizing stations, iPads and extra phone lines.

It also uses Touchless Menu, locally produced technology co-founded this summer by Dylan Rauhoff and John McQueary, according to past SBJ reporting. The product allows people to access an online menu by scanning a QR code through a phone’s camera or by tapping the device with their phone to use near-field communication technology.

The restaurant industry has had a rough go this year with monthly sales dipping in October, according to the U.S. Census Bureau. Eating and drinking establishments registered sales of $55.6 billion in October, down slightly from September’s volume of $55.7 billion. Both months are nearly $10 billion – or 15% – below pre-COVID levels in January and February. However, it is a noted improvement from the year’s low point in April, when sales plummeted to $30 million.

Carryout and delivery at restaurants likely will continue to be strong at the expense of dining inside even as the pandemic’s impact lessens, according to 53.2% of respondents in SBJ’s 2020 Economic Growth Survey.

Learning lessons
Noah Alldredge, owner of Hydration Health Products, BigTime Results LLC and Fitness ER LLC, says supply chain issues have been a particular challenge this year. His Fitness ER venture, which repairs, installs and sells used and refurbished exercise equipment, has felt the pinch.

“It’s just been really difficult sourcing equipment,” he says, noting one of his vendors raised prices 30%-40%. “We’ve had purchase orders submitted in June and still haven’t received them. Prior to the pandemic, we’d get orders within a couple of weeks.”

Thomas and Perches both say through the pandemic they’ve learned the need to be resilient and adaptable to change.

“No idea is a bad idea. You’ve just got to try it out,” Thomas says. “The pandemic forced you to try whatever.”

Jack Henry has been able to complete software implementations remotely during the pandemic, Zengel says. It’s part of finding new ways to do work and still maintain metrics where possible.

“Everybody understands it’s a different environment now,” he says. “We’re trying to be safe but also trying to continue business where it makes sense.”

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