No one could have foresaw it and no business could have prepared for this. But Covid 19 is an unprecedented once in a life time event that has impacted the entire world. Aside from attempting to contain the health crisis and prevent the spread of this deadly virus, the corona virus has also left numerous businesses in its wake. Unemployment claims in the United States alone tops 42 million people and somewhere within that are hundreds and thousands of businesses and entrepreneurs that were forced to close their doors due to lack of business and liquidity to tide through this period. For the fortunate few who has amassed enough liquidity over the years to tide us through, most of us just can’t wait to get our doors open again so business can be as usual.
But most of us are wrong. Business will never be as usual and things will not be the same again post covid 19. Like the internet when it was first introduced, Covid 19 has changed our lives and business forever, and those who do not adapt, will fall behind.
Now with the worst seemingly behind us (in terms of economic impact and confirmed cases), economies are slowly opening back up and most countries are going through a transition phase towards businesses resuming again. This phase proves to be the perfect opportunity for entrepreneurs and business owners to change their business strategies and prepare for this new post covid 19 world.
Some of the changes that we can expect include:
Change in consumer spending habits
Before Covid 19, the world also enjoyed an unprecedented decade long bull run in the stock market where world wide businesses were thriving and unemployment rates were at an all time low. With better spending power, global standards of living gradually improved and millennials who lived in the technology age never had to worry about spending.
When Covid 19 hit and people start losing their jobs and/or new graduates who are unable to find jobs, that was an immediate wake up call to everyone. Covid 19 gave people a financial lesson better than any school, teacher or parent ever could. For those who lived pay check to pay check, they now understand the importance of an emergency fund. This worry that an income stream can unexpectedly stop one day will stay with all who lived through this pandemic and this new spending/saving habit will shape the next two decades as kids who lived through this today will grow up with this mindset.
The travel and luxury industry would most likely be most impacted as airports continue to remain close and air travel could potentially be changed forever too. Consumers are expected to now think twice about spending on wants and reduce overall expenditure.
Digitalisation of the World
In a true but ironic statement, it states that Covid 19 led the digital transformation of enterprises faster and better than ANY Chief Digital Officer ever did.
Covid 19 was swift and wide spread; for most of us, it meant that by the time Covid hit our country shores, we have literally weeks if not days to prepare for the imminent country lockdown. Staff are forced to work from home and processes were reviewed and restructured in order for them to be done away from the office.
What this means for business:
- Digital is the way forward, and companies who were reluctant to see it in the past must have quickly learnt and understood the benefits of digitalisation. During this period when sending out direct marketing mails were impossible, they turn to social media platforms like Facebook to advertise, which I assume would have seen instantaneous results. Like a drug, once companies understand the benefits of digitalisation, they will definitely be looking to explore more in that area, opening pathways for services and businesses who are able to expedite digitalisation and provide tested services.
- More importantly, with global businesses now digitalised. This means that companies who used Digital as their unique selling point will no longer be unique. We have reached an age where digital marketing no longer exist, because marketing today IS digital marketing. Companies and entrepreneurs who have relied on that in the past, must now find new ways to improve and innovate their business.
- Digitalisation is also a double age sword for the country’s labour force. Like how the World Wide Web connected all of us, digitalisation is the same. Think about it, with employees now being able to work from home, employers can now also not limit their talent pool to local talents and can now source from a global pool of people. However, this also means that with a global supply of employees, we can expect the market to have an lower average salaried worker with lesser purchasing power.
Increase importance of Corporate Social Responsibility
Most companies have fallen during this covid 19 period, one company that did not was Amazon. Amazon and Netflix were amongst the few giants whose share price not only did not tank, but instead rose throughout this pandemic. In January of 2020, Amazon shares were trading at apex $1,828, today at the point of writing, Amazon shares are worth approximately $2,474.
However, despite this amazing rise, Amazon shareholders recently demanded the company to address workplace safety concerns after hearing about the conditions in Amazon facilities. The unrest between warehouse workers and the company’s safety protocol has been brewing for months with the increasing number of deaths and confirmed cases at their facilities.
What this means for businesses:
In this day and age with social media being the enabler to spread views and thoughts, there has been an increase importance in not just sales profits, but also corporate social responsibilities.
Diversifying of Global Supply Chain
In an ideal world, we plan and everything works out. But as every entrepreneur and business owner would tell you, it often doesn’t. Companies that used to either be part or have a single country supply chain, quickly learnt during covid 19 that they need to have backups.
Much like how an individual learnt the importance of an emergency fund, international enterprises learn the need to have global suppliers and/or global clientele (if you are part of a supply chain).
What this means for business:
For international businesses who are part of a global supply chain, it is now critical to both find global supplying alternatives (if you are a buyer) and find global buyer alternatives (if you are a supplier). This is especially important for the latter as buyers across the world would have either prepped for or at least planned out an alternative in the event that your supply chain is stuck during this pandemic.
Support Local Movement
The support local movement has always been part of a thing in small startups over the years. While the movement does carry its weight, it wasn’t fully embraced pre covid. But covid really bonded citizens together as people start understanding that the fiscal situation flows within the country and if one is affected, it affects everybody down the line.
Throughout Covid 19, there has been a louder call for consumers to support local brands as citizens band together to fight this virus. In Singapore for example, the hashtag #SGUnited was used to show support for citizens supporting each other.
This movement is also embraced by Social Media giant, Instagram, as they launch “Support Small Business” stickers.
What this means for business:
As a strategy, appeal to the local side of things towards your consumers. Increase touch points with your community through caring for the society, engaging them with or without a sales deal. Treat leads as family and they will take care of you like you are part of them. Improvise and create products that have a localised taste to further band your brand and the people together.
Effects of Social Distancing
Governments around the world has encouraged social distancing and discourages their citizens from spending too much time outside throughout the covid 19 period. With the risk of a second wave in the back of everybody’s mind, the stay home movement is expected to continue at least for the next 6 to 12 months. This gives rise to a wide array of consequences that businesses, brands and entrepreneurs should take note.
Increase importance in Branding
With lesser time spent outside, consumers no longer have the luxury to shop and explore various options before they decide. With limited time available, consumers would go for what they already know and want. Aside from the importance of having a digital presence, is also the importance of branding, now more than ever. Brands need to establish themselves in consumers’ mind as a top of mind recall. If you think about it, it’s also the companies with the most established brands that survived the best throughout this whole pandemic.
Increase of convenience
“If I can _______ , why should I _____”
With consumers having to spend lesser time outside, there has been an increase need for to be able to reach businesses easier and better. For example, in pre covid days, F&B brands who used to rely on delivery platforms quickly learnt during covid that they are restricted by the proximity of their restaurant. Restaurants then had to set up their own island wide delivery that could reach consumers easier and further.
For retail businesses, this could also potentially mean a change in the way consumers will behave. Instead of having to head down to a retail space, is there any other way that a consumer can reach out to you?
The key (in my opinion), is breaking the code of a consumers mind. “If I can ____, why should I ____”. If they can have the same quality of food at home, why should they head all the way down to the restaurant. If I can purchase online, why should I have to head down to the store. If I can do it myself, why should I buy it from you (refers to next point).
Home DIY kits
This stay home lockdown period while bearable at the start, quickly turned consumers into an entertainment starved group as we see a rise in baking, dalgona coffee, tik Tok videos etc. Brands who were able to capitalise on this entertainment starved group were able to come up with home made DIY kits that consumers can do themselves right in the comfort of their own home. Plant shops created DIY planting kits that consumers can plant and grow in their own home. Restaurants that send raw steak with needed ingredients in a stay home cook at home pack. Wedding Photographers who adapted and learnt that they could shoot couples virtually. Bubble Tea shops in Singapore who create their own DIY Bubble Tea kit that consumers can make on their own.
These home DIY kits not only opens up the opportunity for some businesses to also create a DIY kit, but also increases the expectation of consumers. Imagine ordering a home cook DIY steak package and realising that the steak you pay $500 for at the restaurant taste exactly the same.
Increase expectations of service
People don’t want to leave home, they don’t want to take the risk of exposing themselves to the virus. But if they have to, it has to be worth their time.
Remember these consumers who are leaving their home, your sales people are probably the first few people they are going to see in the last couple of months. The expectation and yearn of a human interaction has to be met and fulfilled. Because if it is not, they are tons of businesses that would be willing to be in your place.
Increase importance of being Genuine
Consider this 2 real case gym scenarios.
Gym A, despite government lockdowns and gym closures, Gym A continues to charge members full price of their monthly fee. In their issued statement, they mentioned that they care for members safety and hence closed down the gym but continues charging them (although they did highlight that the impacted periods of closure would be extended for member’s membership)
Gym B, Gym B comes out and explain that the gym has to be closed during this period due to safety measures. Their note to members was that they are a small business and would appreciate any support they can get to tide through this period, but they would understand if members would like to temporarily stop their membership and instead offer free 1-1 personal training for those who does not.
Cost wise, apart from overhead cost, both gyms do not incur any additional cost for both methods. While gym B suffers a membership pause rate of 10% of their members, which gym do you think has a higher chance of members extending their membership after their term is over?
In this day and age, especially post covid, it is no longer a world where brands rule and consumers follow. Brands need to be down to earth, genuine and relatable to hold their customers trust and loyalty over the long run and many businesses and entrepreneurs underrate that factor.
Adoption of Technology
Personally, I foresee the rise in the adoption of Virtual Reality and Artificial Intelligence. In the past, adoption rate was generally slow as humans had no additional incentive to venture into things like VR and Artificial Intelligence.
However, with social distancing limitations, VR and AI could be the next step in retail and business as we are forced to reduce human interaction.
Rise of QR Codes
QR codes were supposedly the “cool” kid back in 2015 for marketers. It was the “must adapt” technology that marketing magazines sold to all of us about. But QRs didnt fly as quick as marketers hope it would be and adoption rate within the general consumers were pretty slow and eventually, the world moved on and only a few hopeful companies (unless absolutely necessary), continued using QRs.
But when Covid hit the world, the world didnt had time to react and they swung back to the thing they already know, yes it was QR. Businesses were using QR to force consumers to check in and out when they enter premises. QR codes partnered with handheld mobile phones with cameras were the perfect combination for contactless interaction.
And with Government enforcements to use such technology, even the late adopters to QR were forced to adopt it. Thankfully, QR codes are now a norm and everybody finally understands its usage, how it works and you will no longer need to station a staff on site to explain to them that they can use their phones to scan the QR to access certain page or information. This opens the door to plenty of usages and QR codes can now be used to its full potential.