To say that the world has seen an abrupt change due to the COVID-19 outbreak is a massive understatement. Organisations of all types and sizes have had to quickly pivot their business models to operate in a completely digital realm. Despite easing of lockdown restrictions in the UK, with no sign in the imminent future of going back to anything like normal working practices, these conditions may persist for some time yet.
I previously wrote about the importance of developing rapid digital innovation practices, and that creating a system for ideation and building partnerships is key to facilitating a fast exchange and development of digital solutions.
For this article, I will be putting the spotlight on why businesses should start investing in digital solutions now by looking at how industries have already been trending toward digital integration pre-pandemic, how this shift has become more urgent in our current situation, and how we can take lessons from our history of crises impacting the way we do business.
Digital Transformation is the Present and Future
Although the pandemic seemed to have stopped operations almost overnight, businesses and consumers have been moving towards the digital long before the world effectively shut down.
Our very own high streets are prime examples of this. In the first half of 2019, there was a net decline of more than 1,200 chain stores on Britain’s top 500 high streets. The rapid rise of online shopping has significantly contributed to this decline, as 82% of UK households made online purchases last year—a record high for online purchase penetration rate in the country.
Unfortunate as it may be, it came as no surprise that the coronavirus pandemic has hit these businesses the hardest. To inject life back into the high streets once our lockdown lifts, town centres could look toward public engagement, inclusive design, and community building via digital placemaking.
With many commentators saying pre-Coronavirus that the future of retail is in e-commerce, it’s not surprising that the pandemic has accelerated this trend. The first week of April alone saw online retail sales increase by 22%, as shoppers refused to risk their health, opting to make purchases through websites and apps instead.
It’s not just the retail sector that’s seen a massive and sudden jump to online platforms. Even the healthcare industry and the arts and culture sector are opening digital avenues to reach their respective bases.
Digital Tech Improving Business Performance
To assuage organisations’ rightful concern that pivoting to the digital world may not be financially rewarding, let’s take a look at some case studies that prove the positive effects of this transition for several retailers.
Best Buy moved their marketing efforts from mostly mail to an omni-channel approach. In 2012, 80% of their media spend was on mail. By 2019, 90% of their media spend is digital. Their success led to a stock price increase starting at $23.70 in 2012 to a peak of $87.96 at the end of 2019. The consumer electronics retailer also weathered the initial economic hit of COVID-19, with only a slight 6.3% decrease in sales year over year during the first quarter.
Meanwhile, Hasbro increased their ad spend by %1100, with a focus on social media and video based on customer data, leading to a record $5 billion in revenue in 2016. Their stock price also rose from $36.37 at the start of 2013 to today’s $83.92.
Nike only made their “massive transformation” to digital in 2017. The athletics brand has since enjoyed success with a 5% revenue increase in Q3 2020 and a 36% increase in digital sales from the previous year.
And it’s not just retail that can benefit from a pivot to digital tech. Rolls-Royce recently partnered with Calvium to develop an app to report foreign object debris (FOD) around military airfields. With FOD costing the global aerospace industry $4.4 billion a year, this project also shows how digital tech can transform maintenance, repair, and operations programmes in the aerospace sector.
Why Now is the Time for Businesses to Invest in Digital
Investing in digital solutions, especially if an organisation has not yet entered this space, may understandably grip any business owner with anxiety and apprehension. This is, however, the right move to make for several reasons.
The ‘New Normal’
COVID-19 has irreversibly altered the way people live, their behaviours and expectations. From how we socialise, how we work, how we play, how we learn, how we travel, to how we shop, it’s starting to be clearer that there is no “normal” to go back to.
Countries around the world are starting to lift their lockdowns in order to jumpstart their economies. Even then, there is no sign of COVID-19 simply going away, as there has yet to be a cure or a vaccine for the virus. While there is hard work being done by multiple research groups in developing a drug to treat the novel coronavirus, we do not have a concrete timetable for when we can expect an effective treatment.
People are rightly still wary about going out in public. Fears of a second wave hitting are valid, especially when the director of the European Centre for Disease Prevention and Control has advised EU governments and the UK to prepare for another outbreak. Our reliance on technology to keep us safe and allow us to continue our day-to-day living will only increase.
The Business World is Changing
For business leaders and employees that have not bothered to learn modern technology, whether it’s during company time or for personal use, the pandemic has been a wake-up call. Whether it’s doing internet banking or attending Zoom meetings, professionals the world over have gone through a crash course in telecommuting, digital finance, and online shopping.
Industries that still rely on people being in the workplace such as food and manufacturing face unique challenges to continue operations while maintaining the safety of their workers. Many business sectors, however, are realising how much of their labour force can actually work remotely and still get their jobs done efficiently. Even employee training, which has heavily relied on in-person sessions in a classroom setting, is evolving with the increase in demand for e-learning during the pandemic.
With worldwide lockdowns resulting in an unprecedented 17% drop in global carbon emissions, we have gotten a glimpse of what we can accomplish to address the climate crisis when radically changing how we do business.
Lessons from History
In any significant global event, new ways of working emerge and replace old ones. We saw the emergence of the Welfare State and the NHS after the second world and we have seen it after 9/11, when security grew much tighter around events and big workplaces in commercial hubs and travel became much stricter. Several of the most successful tech startups emerged soon after the financial crisis of 2008 devastated economies around the world, including Uber (2009), WhatsApp (2009), and Instagram (2010).
COVID-19 is set to make an even bigger, longer-lasting consequence than these past two major events, as it cuts across everything from health to migration to education to economies throughout all regions. Digital investment will be fundamental to seize the opportunities that today’s crisis presents.
Be Proactive and Prepare
The pandemic has hit businesses hard and fast. Organisations that have adopted digital solutions early are the only ones finding success, while those that are just making changes are struggling to survive. If your company is fortunate enough to stay afloat, now is the time to be proactive, adapt, and prepare for the new normal.
Open communication lines with your audience and listen to gather valuable insight. What you’ve learned should be discussed with the heads of the organisation and factored into the strategies you devise and implement moving forward.
Since digital solutions will be the new norm, Calvium can help bridge the gap between you and your customers through innovative digital solutions, so why not give us a call today if you want us to be a part of your transition towards this new normal.