‘COVID-19 will reshape the very dynamics of business in post-pandemic world.’
The corona virus pandemic has swiftly and rapidly changed the world. It has brought the world to a new order, reshaping everything. There is only one news story now telling us about world’s economy coming to a screeching halt, people are afraid and quarantined, border controls in place, and major businesses facing massive disruptions. But as any other black swan, this crisis will also end someday by bringing into reality a new landscape and a new order. It is worrying for businesses as it raises questions such as, what that landscape would look like and how their future will be reshaped when the ashes settle?
Many of the changes are going to be short term like social distancing, border control, curtailed travel, work from home, focus on workplace hygiene, etc. but the consequences that stay with us will only emerge once this public health crisis is over. This article will shed some light on how COVID-19 will reshape the very dynamics of business in a post-pandemic world.
☑ Reshaped supply chains:
One of the massive hits that corona virus is going to place would be on globalized supply chains. Due to globalization efforts, many companies have their product manufactured on one place and assembled and sold on other. With this outbreak, most of the manufacturing that was taking place in China has been disrupted making big companies like Apple and Intel realize that how big a bottleneck over-reliance on China is to their global supply chains. Now, in post-corona world, China’s rule as ground zero of manufacturing might end. Companies might re-evaluate the risk associated with central reliance on lengthy global supply chain and diversify it by bringing production local, leading to emergence of new countries as manufacturing hubs. They may now also go for vertical integration of supply chain to make sure their suppliers are also local.
Another trend that is going to change is the inventory practice. Up till now companies were doing lean management and keeping inventories as small as possible. With the advancement in forecasting technology, companies could predict their product demand ahead of time and hence, acquiring the inventory accordingly was made possible by the fluid movement of products across countries and regions. But with the breakout of corona virus, half of the world has been under lock-down and companies are now scrambling to keep their shelves stocked. After this crisis ends, we might possibly see companies returning to the traditional practice of keeping high inventories and reserves at hand.
☑ Upswing in D2C and online business:
Despite online shopping gaining popularity, consumers have always been wary of purchasing online, but this pandemic has forced them to buy the staples such as, food, groceries, medicines, etc. online which they would otherwise be reluctant to buy online. The lock-down and social distancing imposed on us by this pandemic might push people to try to buy stuff online which might create a major upswing for online retail market. However, this surge in demand might overwhelm the e-tails current resources, forcing them to change their strategies related to fulfilling order and delivery.
Similarly, Direct to Consumer (D2C) business arrangements may also get more popularity. In these times, when the supply chains of major companies are disrupted, agile startup are performing better than oil tanker-sized competitors. D2C are in a better position to meet customer’s need as they rely on only themselves for managing every aspect of the supply chain themselves, from manufacturing to distribution, marketing, and fulfillment.
These D2C brands are in almost every sector, and in almost all of the FMCG space. Millennials have shown acceptance towards these brands as they are more in touch with digital marketing, online purchasing, and social media ads but older consumers have been wary of such experiences. But now, as the pandemic has put bars on everyone, young and old, people are urged to opt for these D2C brands to meet their needs. This is going to give a much-needed push to D2C brands, and they may see better days in post-crisis scenario.
☑ Adoption of digital payment and online banking:
According to many public and health officials, one of the greatest vectors of corona virus can be paper money exchanging millions of hands. In response to this, people are now encouraged to avoid cash and to use their credit/debit cards in order to limit the exposure to virus. The measures taken in order to limit cash usage has and will lead to adoption of a contact-less [wireless] payment and digital wallets which much of the market was reluctant to use before. Similarly, the pandemic has also shifted traffic from physical branches of bank to online banking apps leading to spike in digital banking activity. These new trends can bring many new opportunities for e-commerce and fin-tech businesses.
☑ Remote work arrangement may stay forever:
As the pandemic is getting its grip tighter on the world, more and more companies are showing effort to make sure that their staff does not come to office and rather work from home. Up till now, work from home, despite its merits has always been showed little interest by managers owing to challenges associated with ensuring productivity and performance but now companies are bound to roll out mandatory work from home policies to ensure safety of their employee and all this is happening so fast. As employees are getting more time at home, they might develop new skills. Workplaces are now re-engineered, removing any low priority work.
Now, it’s also quite possible that companies may find this remote work arrangement efficient convenient & even cheap and carry on with it even in post corona virus world. Companies may shift from static bureaucratic structures to more dynamic work arrangements. On similar footing, because many important conferences, events and meeting with vendors and partners had to be cancelled, many companies are also resorting to online means of maintaining touch with partners and vendors through teleconferences, webinars, presentations, online training sessions, etc.
So, distributed work forces and digital collaboration might be more common even after the pandemic ends. Hence, it is advisable for businesses to keep their eyes open and re-calibrate their patterns of collaboration to accommodate this new business reality to fit into the growing startup market.
☑ A boost for 5G roll-outs:
Although it’s still very early days for 5G, but up till now businesses have shown little enthusiasm in 5G. It was expected that in coming years the adoption of 5G technology will increase, but this public health crisis is going to push the adoption rate at a much faster pace. With many big and small business going remote, the need for fast, uninterrupted and instantaneous communication has increased manifold, making governments and Telecos work hard to make sure the necessary infrastructure is there and readily available. Many companies are now relying on teleconferencing and virtual workspace tools like Microsoft Teams, Slack, Zoom, etc. to keep their operation afloat. It is believed that this need for faster and real time communication is going to build a strong case for 5G’s adoption.
☑ Refashioned marketing approach:
Social media websites have always been a famous go to place for millennial but owing to the social isolation and lock-down, the usage of internet and social media has increased dramatically even by the older consumer segment. More and more digital content is demanded and consumed each day as people are now craving entertainment. Even if you are a business that was using in person marketing, now that doing it is out of question, you should be thinking of ways to connect and engage with customers using virtual means. In this regard, content is the king let it be in the form of live streams, videos, articles, new trends etc.
The goal is to create digital content that is personal and interactive and that can keep your target market engaged and connected with you. In this regard, social media should have a pivotal role in your new marketing strategies. Create event-like experience for your target audience for anything like new product launch, new promotion or store opening and reward those who visit and follow your content (like top 50 visitors gets special discount codes). No matter in what business you are, it’s the time to get creative in creating ways to engage your customers even if they are physically distant by showing them the content that matters to them.
☑ Keep an eye out for the inflection point:
No doubt that corona virus pandemic has been a black swan event of 2020; something that is going to leave a story that points far into the future and create far reaching consequences some of which we can’t even predict yet. Though one thing is clear that with the rate corona virus is shaking the dynamic of world’s operation, there would surely be new normal in the post-corona virus world. Nonetheless, to emerge as a business owner who survived this crisis, you have to be cautious of false optimism, be realistic, be fast enough to adapt to the changes corona virus is going to leave in the world and re-emerge with a strong footing.
Believe in what Darwin says about those who survive, “are not the strongest or the most intelligent, but the most adaptable to change.”