As the pandemic continues we are now seeing empirical data that shows companies are adopting tech as a coping mechanism.
In the space of only a few, hectic months COVID-19 has revolutionised the way that many retailers work with shoppers switching to online models and in-store sales requiring much greater levels of contactless fulfilment.
As we move through the different stages of the pandemic response, much more information is becoming available as to how businesses have adapted to the crisis and how consumers have reacted now and expect to behave in the future.
What we see overall is increasing use of digitization, whether that be in supply lines, customer interaction or in fulfilment chains and a remarkable willingness to experiment with new technology.
Indeed the most remarkable aspect of the business response to COVID is the speed of that technological change and the widespread nature of the transformation.
The speed of tech adoption is increasing
In a recent survey, global consulting firm McKinsey discovered that the pandemic has hastened the adoption of digital technology by a remarkable seven years.
Whereas before the crisis executives were reporting an almost institutional reluctance to embrace new technology McKinsey state that “Nearly all respondents say that their companies have stood up at least temporary solutions to meet many of the new demands on them, and much more quickly than they had thought possible before the crisis”.
Whilst companies are moving towards tech at a faster rate than ever before, their customers are responding in a similar fashion with a global move towards digital interactions.
Source:https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever
What is interesting is that the shift towards technology is a worldwide phenomenon, with emerging nations seeing even greater moves to new retailing models than more developed countries.
source:https://unctad.org/system/files/official-document/dtlstictinf2020d1_en.pdf
Tech solutions for the COVID era
So with this increasing move towards tech what sort of changes are we seeing from businesses?
Probably the most visible for the majority of people will be in face-to-face retail environments.
Whilst the move online has been remarkable, bricks and mortar stores still have their place and retailers have certainly had their work cut out.
Many businesses that eschewed technology in the past and relied purely on cash-based transactions have now adopted point of sales systems as the focal point of their business, combining these with cashless payment solutions to improve their contactless sales.
The use of POS systems that link up with an online store also provides extra channels for retailers that are struggling to get footfall.
Whilst we are seeing a move towards tech on a micro-scale, this is also evident at a macro level with entire industries moving towards digitization of supply lines.
As would be expected, this has been more pronounced in industries that do not deal with physical products such as financial services, entertainment and healthcare and given the long lead times for changes within the manufacturing sector this is to be expected.
Tech adoption has revolutionised the back-office
Whilst most of the data available concerns the effect on sales and front office functions, there is good evidence that some of the most surprising and valuable change has come in support departments.
Executives are reporting quite astounding increases in the use of technology in business decision making, remote working, collaboration and migration to the cloud.
Communication is also something that has had a radical shakeup and there can’t be many of us that hasn’t become an overnight expert in Zoom, Skype or Microsft Teams!
Will there be a retail spring?
Many retailers have been pinning their hopes on a form of mini-boom once COVID restrictions are eased and the data from the UN Conference on Trade and Development (UNTCAD) shows some evidence of the potential with up to 33% of people saying that they have postponed larger purchases.
If there is to be a ‘retail spring’ then it is likely that the retailers who are able to get their supply lines up and running the quickest and have the sales channels that their customers prefer will do better.
source:https://unctad.org/system/files/official-document/dtlstictinf2020d1_en.pdf
What we are seeing across Europe is that COVID doesn’t necessarily ‘end’ as such, but in fact, second spikes and local lockdowns mean that businesses need to build in flexibility to remain competitive.
The use of technology gives companies the ability to send back-office workers home to continue their jobs remotely and the already developed supply line technology is still in place helping to keep the wheels of industry rolling.
The change is not temporary
One of the features of the political debate around COVID responses is the stress on the temporary nature of the situation however the data is starting to suggest that consumers and companies intend to carry on with their digital transformation in the long-term.
Consumers seem to have enjoyed the switch to digitization and the convenience it brings appears to have lasting appeal.
Most consumers are now saying that they intend to continue with digital interaction wherever they can.
From the business point of view, it is difficult to imagine companies that are seeing productivity increases and reductions in fixed costs wanting to go back to old ways of working simply for the sake of tradition.
Conclusion: is the move to tech the COVID silver lining?
For advocates of technological solutions, the past few years have been a frustrating time as executives continued to drag their heels on aspects such as moving to the cloud and the adoption of remote working.
What COVID has shown is that if the need is great enough and there is sufficient urgency then companies can make massive, fundamental changes very rapidly indeed.
Executives have seen at first hand that staff can use technology to remain productive and stay in contact through enforced absence from the workplace.
Dramatic changes in consumer behaviours have pushed businesses to reevaluate the way that they interact with their customer base.
And finally, consumer sentiment seems to be saying that these changes are not temporary and that companies that have grasped the nettle and made the leap towards a technological solution will come out of the pandemic in much better shape than their competitors.
