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May 26 2020

Opinion: Rebuilding consumer confidence is central to our economic recovery

This op-ed was originally published in the Calgary Herald on May 26, 2020.

Do you dine at your favourite restaurant? Do you have a drink on a patio with friends? Do you shop at your local retailer? Do you enjoy sports and entertainment events? What will it take for people to feel safe enough, sure enough, to engage in their local economies? In short, what will bring back consumer confidence?

As a black swan event without modern parallel, the COVID-19 pandemic is a crisis on multiple, simultaneous fronts.

That it is a public health and economic crisis is clear and well-documented. As of this writing, there are globally more than five million diagnosed cases and more than 340,000 deaths, according to the World Health Organization.

It is also a crisis of mental health and of gender and social inequality, exacerbated by COVID-19 but caused by fundamental vulnerabilities in our social, political and economic systems.

And it is also a crisis in consumer confidence.

Canadian consumer confidence plummeted to historically low levels in April, easily surpassing the negative sentiment of the 2008 recession. While the freefall seems to have slowed since hitting its lowest point (37.08 on April 24) consumer sentiment remains very negative (38.86 as of May 15).

Consumer foot-traffic trends in Alberta show that between March 28 and May 9, retail experienced a 38 per cent drop and workplaces a 30 per cent drop in traffic, compared to a pre-pandemic baseline. And in Calgary, recent analysis by Deloitte shows that the median distance travelled by residents between March 20 and May 4 is only a fraction of pre-pandemic levels.

At its core, consumer confidence rests on the ability to rebuild trust. According to the latest Edelman Trust Barometer, trust has declined across all industry sectors in Canada and across all news and information sources. At the same time, 65 per cent of Canadians do not trust societal leaders to address our country’s challenges.

The business community is already working hard to rebuild consumer confidence by demonstrating they are putting their employees and customers first. Businesses are going the extra mile when implementing safety protocols, such as erecting plastic barriers between cashiers and customers, in between booths in restaurants, and marking spaces to delineate physical distancing. And that they are partnering with government at every turn is all helping to turn the corner.

Innovation can also play a big role here, and businesses are leaning into their entrepreneurial spirit. For example, Canadian and international airports are already looking into how technology — from touchless travel to virus-detecting scanners — could improve passenger confidence.

From the academic and scientific communities, advancing and communicating public health research on treatments and vaccines will be paramount to rebuilding consumer confidence. Equally important will be partnerships with government, business and non-profits to inform protocols, produce treatments at scale and ensure no vulnerable populations are left behind.

Governments have arguably the most critical role to play in rebuilding consumer confidence. Through guidance, education and enforcement, government representatives and public health officials can provide the new frameworks that will guide our daily lives. The key here will be consistency across each level of government as well as clear and timely communications. Most of all, it will require the development of inclusive, future-focused policy.

However, at the end of the day, it will require us, as citizens, to do our part for our communities. This includes following public health orders and supporting local businesses as much as we can. But it also includes exercising our rights as citizens and consumers to ask for what we need to feel safe.

As we look to the future and to shape our new reality, I am hopeful because I believe we have the opportunity to forge deeper connections — with our neighbours, with the businesses we choose to support, with the work we choose to do, and with the governments we choose to represent us.

That drink on the patio may seem a little precarious right now, but by working together and being open to new ways of engaging, we will emerge from this pandemic more united and more closely connected. It all begins with rebuilding confidence and trust.

Sandip Lalli is the president and CEO of the Calgary Chamber of Commerce.