This is normally the time to make predictions for the coming year. Typically, the focus is on tech and business trends and evaluate which ones could get next year’s timing right. This time it’s different. In 2020 the pandemic was a disruptor of normal trends. It stopped some businesses, changed some and accelerated others. So, what we can expect to see when vaccines hopefully turn the tide of the pandemic?
If we briefly summarize 2020, it accelerated digital businesses by a few years, stopped travel and hospitality businesses, moved many activities from bricks and mortar to online and taught people to use many new tech tools. In 2021 the questions are, which of these trends will continue, which will turn back time to pre-pandemic and which businesses have changed forever.
One or two years won’t change human beings fundamentally. People can learn to use new services and products, but basic needs don’t change. Let’s take, for example, how people have adapted to food delivery services, but they still want to meet other human beings. People also look for easy solutions but usually hesitate to do things they don’t understand or haven’t tested. But home delivery and Zoom meetings, because they had to be adopted, became everyday options, that we quickly learnt to use effectively.
So, what’s the outlook for 2021? We must think about the things people have learned in 2020 and also what they missed in 2020. Then we must also consider which technologies and services took a leap in 2020. We can also evaluate, which trends started before the pandemic, and those that the pandemic has accelerated. Based on this, we can assess a little more accurately what we can expect to see.
Digital services are helping people in many situations. Virtual meetings help us save time and money. Digital signatures make it easier to handle agreements and use legal services. Home delivery makes grocery shopping more straightforward and faster. Sometimes it is more effective to work from home. These have been obvious changes in 2020, but they are still good examples of trends that will continue after the pandemic.
Airlines, hotels, restaurants and many other hospitality services took quite a beating in 2020. Many people have changed their views on travel and eating out, and are questioning if they need to take so many flights in future. This part is probably much more complicated. People still want to see new places, see other people, and break from daily routines and environment. But at the same time, many businesses are probably having second thoughts on the value of business travel and physical meetings.
People now see the value of physical meetings and hospitality services in a new light, having lived without them for so long. People have also noticed they can work just as effectively from home or remote places. Nevertheless, data indicates that flight bookings for late 2021 are strong and that new business models, like monthly subscription for flights, are emerging.
Retail businesses have suffered most from lockdowns and restrictions. Many retailers, even well-known, long-established department stores and chains, are closing down. But it would be a mistake to think the pandemic has been the only reason for this. Bricks and mortar retail has been in trouble for years, and surprisingly, why it has taken such a long time for some customers to adopt online shopping and use home delivery services.
The COVID situation has not only impacted consumer businesses. B2B business has also changed. We haven’t had trade shows, conferences and meetups to find new products, services and contacts. This has pushed the adoption of ‘self-service’ online sales channels, but at the same time, traditional ’face-to-face’ sales are vital for most B2B businesses. There is no doubt that B2B companies have also suffered, and there will certainly be bankruptcies after the pandemic when companies are forced to take a reality check.
Based on the above, here are some of my predictions for 2021:
- Travel, hospitality and service businesses will increase when the pandemic restrictions and risks are over. This doesn’t mean all companies in the sector will survive or that the services will be the same as before 2020. Still, it will be an excellent time for new companies to enter the sector, acquire some existing businesses and innovate new business models.
- More retail business will go online, and high street stores will continue to fail.
- More services will go digital and online, but it doesn’t mean that all new digital services will be profitable. Competition will be fierce in many areas, and companies will need to achieve significant volumes to survive. Many will need to go global to achieve this.
- A more significant opportunity than digital consumer services will be enabling components that make it easier, safer and more effective for consumers to use services. These will include better utilization of data for consumers, better trust in services and third parties, and solutions to improve customer experiences (e.g. VR/AR for shopping, better platforms for remote education and better solutions to manage home deliveries).
- Commercial real estate business will go through significant changes. Many retail stores will disappear, office space needs will change, and new requirements will emerge. For example, companies will need new office space types to accommodate people that work from home, occasionally coming to the office, something more akin to ‘hot desks’ than cubicles.
- E-commerce operations may need to enhance customer experience and marketing by utilising showroom type places, where customers can physically see the products and make orders, and where companies can promote their brands. Coffee shops and restaurants will also need more space to accommodate social distancing.
- People will become more aware of health and wellbeing issues, and wearable devices to give them more data. This will create many new digital services to improve wellbeing and monitor health and get remote healthcare services when needed.
These are just some examples of what we are expecting, but they illustrate the changes and trends we are going to see after the pandemic. Of course, the biggest question is whether mass vaccination will speed the return to some normality or are we going to encounter some new surprises. Anyway, we must always prepare for the next phase in business and be ready when it comes.