Covid-19 and digitalisation
The Covid-19 pandemic is reshaping the global business environment with the UN anticipating that the crisis will result in a $1 trillion hit to the world economy this year.
For digital leaders this means company priorities shifting by the hour and a dramatic seesawing of fortunes between sectors; travel and transport are in crisis with airlines such as EasyJet grounding all its aircraft and BA suspending many flights, whereas supermarkets are experiencing rapid growth.
While employee health and safety rightly remains the top priority, digital leaders also need to consider carefully the continuity, scale and scope of their digital operations in these new and unfamiliar trading conditions. Inevitably, as they struggle with business plans in a constant state of flux, investment in digitalisation projects will be way down their list of priorities.
Without minimising the devastating impact of Covid-19, it’s important not to lose sight of the digital business opportunities that are emerging right now. While these are often in response to short term requirements they have the potential to become long-standing shifts in the digital landscape once the current crisis has passed.
Here are four areas of tech that we believe will thrive post epidemic:
1. Data-enabled healthcare initiatives will increase
As consumers focus much more on their health, testing is the order of the day, whether its Covid-19 tests mandated by healthcare organisations or consumers opting to use private companies to test themselves for different medical conditions.
With the right privacy limits in place, the resulting massive increase in healthcare data represents an opportunity for various data and AI specialists to develop useful solutions that will help reduce risks of contagion, relieve consumer anxiety while also providing reassurance to help them cope with these difficult times.
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2. Scalable digital business models will start to replace product focused operations
As Covid-19 pressurises the global supply chains of companies such as Best Buy, Wayfair, Nike and Gap, companies will increasingly start to build resilience in their businesses by complementing product-focused models with scalable and stable digital alternatives. This might include businesses diversifying from their core offer to sell data and AI assets to third parties.
Supermarkets such as Walmart already sell point-of-sales data to brands including P&G and Unilever who use it to ensure adequate stock of products in their warehouses and to promote real-time availability of their products in grocery stores.
Beyond retail, we can expect the digital-enabled sharing economy which currently includes examples such as Combiworks (matches supply and demand of manufacturing capacity), and Cargomatic — which connects shippers with local truckers – to accelerate into B2B much more rapidly as businesses face urgent pressure to find smart and quick ways to slash costs and monetise existing assets.
3. E-commerce will experience a renaissance
Due to self-isolation, consumers who normally visit physical stores are increasingly shopping online with the result that e-commerce is booming especially when it comes to tinned goods, pasta, health and sanitary products.
The uplift in e-commerce may well become permanent if people remain wary of mingling in real life, and increasingly replace shop visits with online purchases.
Logistics platforms, like Bringoz, are already revamping their concepts to match the new market circumstances by enabling retailers to scale home delivery fast. We can expect similar innovations going forward.
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4. Digital collaboration and entertainment tools to see an upsurge in valuation.
As companies rapidly — and in some cases also permanently — move towards remote working, the market for digital collaboration tools such as Microsoft Teams, Google Hangouts and Zoom is likely to grow quickly. Zoom has already experienced a 50% increase in its share price since the start of the year.
What’s more, as staying in becomes the new going out, instead of visits to concerts, museums and events, consumers are seeking equivalent AR and VR experiences, which can be enjoyed safely while sitting on the sofa. Hand-in-hand with this, we are already seeing growing demand for digital media and entertainment including social media, gaming, news, video streaming and books as people seek to relieve boredom and fill the time previously taken up with travelling and socialising face-to-face.
How can companies ensure they beat the odds and come out on top?
The challenges Covid-19 presents to different sectors means it’s hard to generalise about how to turn a crisis into an opportunity — airlines and travel companies for example will struggle to re-engineer their business models fast enough to offset the massive damage being done to their bottom line.
In sectors that are less impacted by the epidemic, businesses need to fundamentally rethink what creates value, what is important right now and in the future, and what role digital innovation can play in making new things happen. Companies which stay human and customer-focused and manage to quickly innovate new digital businesses to solve problems created by the new conditions are best placed to seize any nascent opportunities.
Right now it’s essential for businesses to create and maintain a strong and pervasive digital culture. As work becomes increasingly remote, leadership styles, mindsets, habits and ways of working matter now more than ever. Winning cultures encompass trust in people, transparency of work, caring for others, as well as continuous learning. Nurturing these important values during difficult times will ensure that firms retain their digital talent, get things done and continue to thrive.
Finally, companies that show social responsibility and offer solutions to the emerging health issues will have an edge over their greedy rivals who only strive to maximize their EBIT and shareholder value.
At best, the Covid-19 outbreak will give rise to new, more agile, more resilient, kinder and more human ways of doing business that will allow companies to withstand a wide range of threats, both anticipated and unexpected, while still caring for the people working for them and their customers.