We know that the pandemic is causing a seismic shift in the economies of the world. We know the impact will be fierce and we know that companies will have to be more agile than ever before in order to survive.
The question is how agile, and where is the money flowing from – and to?
Part of the answer to this question is obvious.
Airlines are suffering and will continue to do so. Accenture’s latest study points to business travel being one of the last areas that gets back to anything like ‘normal’. We are now too used to virtual meetings. Meanwhile, bosses are now looking at cost-cutting and efficiency and concluding that some ‘half-way house’ is probably the best balance for the future.
Restaurants, pub, bars and the retail sectors are all taking a battering, according to Accenture (and anyone who has tried for a night out recently). In fact, some research points to restaurants being the worst places for virus transmission, the risk being four times greater than the next most risky place, the gym.
The shift will be huge, has already started and the figure that is shifting amounts to $3 trillion.
One bright spot, however, is that people are saving money. They are not going to pubs or travelling abroad for holidays, and this must provide great opportunities for those who now find themselves in the right place at the right time during the shift.
Some early examples are emerging.
Hotels are now renting out rooms for a daily rate, so that executives can ‘go’ to an office, of sorts.
Some airlines are experimenting with a virtual travel experience, using VR technology to ‘take’ business class passengers to their favourite destinations, ply them with top notch food and have them home in time for tea.
Of course, the online world is seeing the benefit of this seismic shift. Predictions for everything from online gaming to VR to any and all technology that telcos and their partners can throw into the ring are buoyant. 5G could not possibly have hoped for a better start than against a backdrop of data-hungry customers willing to pay a premium for a faster, better experience.
One area that we would argue with Accenture is in the niche between normal retail and premium.
The report says:
‘As the economic downturn persists, several international statistics agencies are warning of “consumer scarring,” where there is greater permanency to consumer behavioural shifts. Consumers are saving more money than usual, and they are looking for bargains. Our COVID-19 Consumer Research found that 29% of respondents expect to spend more on budget brands, and 42% of respondents expect to spend less on premium brands.’
We would say that is true but only to a point. The pandemic has stopped us buying decent work or leisure clothes, but there are moments – and many of them – when people need a treat. That extra nice bottle of wine, the new lipstick or perfume or the premium version of the gym ware they love that helps counter the ‘other’ pandemic – mental health.
The seismic shift is real and upon us. It will cause untold damage but it will create untold opportunities, mostly in the space between the physical and the virtual.
Companies will have to be very agile to take advantage of the shift. And it would be very beneficial to read up on companies that have completely reinvented themselves in times of crisis.