How COVID-19 Will Change the Way We Do Business, According to a Business Owner
4 min to read
The world is shifting again, and fast. The focus of the COVID-19 crisis is moving away from hospitals and towards the economy. The stock market is rising, and money being dragged from Main Street to Wall Street.
The unprecedented unemployment rates in US are a sign of new times and the world economic recovery remains uncertain to everyone. As we look towards the future, the best we can offer is a “crystal ball” forecast.
One thing that can be said with certainty, however, is that the COVID-19 is not just going to enact temporary behavioral changes, but rather a long-lasting restructure of our societal frameworks. Looking back, every global crisis (Pandemics, Wars, Recessions) introduced a revolution to mankind.
In the case of COVID-19, this new concept of "Social Distancing" is changing not only the way we build and foster relationships with people, but also how we do business.
Here are 10 ways that I think the Coronavirus crisis will impact the way businesses operate.
1. The Evolution of Digital
Brands will have to get rid of all the half-baked digital “campaigns”, along with all the digital marketing “gurus” that got there by reading 2 articles and creating an Instagram profile. It’s either digital strategy, or nothing. The business world will be a survival of the savviest, and only the competent digital platforms will survive.
2. eCommerce as the Core Sales Channel
Online stores (e-commerce) is no longer a secondary shopping option. Physical stores will be redesigned as spaces for experimenting the brand, but sales will migrate online, reinforcing the contactless world.
3. Pandemic Residue
85% of Starbucks stores have reopened in China but store movement is 40% lower than what it was before the pandemic. People are consuming less in the store, but buying and leaving instead. Starbucks admitted that they will have to revise their business model by reducing living space. This crisis will leave individuals with a sustained trauma- a sort of pandemic residue- and they will not return to their old, carefree shopping habits. There simply is no going back; there is only going forward, and forward is going to look different for businesses.
4. Greater Reliance on External Resources
The largest American retailers have already laid off more than 1 million workers, and are expected to re-employ only 85% of them at the end of the crisis. Most of them expect a decrease in traditional retail operation. As companies will generally look for ways to decrease overhead, they’ll be employing smaller in-house teams and relying more on outsourcing, external partners, and third-party logistics (3PL) providers.
5. Operational Preparedness
Across several verticals, companies are experiencing issues with stock and delays in goods delivery. The sourcing industry (both internal and external) will have to be readjusted. Companies will need to future-proof their inventory and distribution channels, always maintaining a “just in case” stock. This will be an important time for wholesalers, warehouses, drop shipping and logistics centers.
US and Europe have developed a supply chain with China and the Far East that is showing its fragilities right now. This high level of interconnectedness has proven to be an Achilles Heel. I believe this will this will change for security reasons. Globalization might experience a setback, and a lot more protectionism will arise.
7. Digital Will No Longer Be Optional
Digital will be viral. There are no sectors of the economy that can say "We don’t need digital". If you know anyone brand still saying this, they have no future.
8. Staying Grounded
Travel and hospitality habits will change radically. We expect a huge reduction in business traveling, which is to be replaced by conference calls (due to economic constrains, environmental impact, and health security). The new auditoriums will be Zoom, Skype, Hangouts and WhatsApp. Even holiday trips will be more inland again, focusing on local destinations (by car or by train), in remote places with low concentration of people.
9. A Tense Consumer Climate
Civil rights vs health rights will be one of the biggest themes for debate, as our individual freedom is directly impacting other people’s health. Every move performed by governments, health departments, insurance companies, pharmaceutical industry, health care services and public funding instruments will have huge impact on public opinion. In a time like this when everything can become political, it's a very fine line between being targeted, and being divisive. With tensions high, brands need to be deliberate with their brand voice and communication.
10. Digitalization of Everyday Consumer Habits
Millions of consumers were "forced" to online shopping during this pandemic. Many people are discovering the convenience and ease of ordering their everyday goods, like groceries, online. First studies show that companies who are able to provide a good experience to customers will most likely not have them back at the physical stores when this pandemic is over. This means that brands should be fostering the relationship with their customers in order to build long term affinity and loyalty.
Bottom line, this is not a moment to cut costs, but a time to shift investment into a structured digital strategy. It’s time to explore in new areas, new technologies, new sources of data, and new streams of revenue. There will be a lot of opportunities ahead for companies that act now.
The new BC/AC for Marketing is here, and no one will forget the "Before Corona" and "After Corona" meaning. Probably not even the religious.
||This article was written by Bruno Gavino, CEO and founder of Codedesign. Bruno has over 15 years of experience in starting his own business ventures, as well as helping bring projects to market as a digital business consultant and an advisor for Start Up Lisboa.
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