INTRODUCTION
2. MICRO RESET (INDUSTRY AND BUSINESS)
2.1. Micro trends
2.1.1. Acceleration of digitization
In the pre-pandemic era, the buzz of “digital transformation” was the
mantra of most boards and executive committees. Digital was “key”, it had to be “resolutely” implemented and was seen as a “precondition to
success”! Since then, in the space of just a few months, the mantra has become a must – even, in the case of some companies, a question of life or death. This is explicable and understandable. During confinement, we depended entirely on the Net for most things: from work and education to socialization. It is the online services that allowed us to keep a semblance of normalcy, and it is only natural that “online” should be the largest
beneficiary of the pandemic, giving a tremendous boost to technologies and processes that enable us to do things remotely: universal broadband
internet, mobile and remote payments, and workable e-government services, among others. As a direct consequence, businesses that were already operating online are bound to benefit from a lasting competitive advantage. As more and diverse things and services are brought to us via our mobiles and computers, companies in sectors as disparate as e-
commerce, contactless operations, digital content, robots and drone deliveries (to name just a few) will thrive. It is not by accident that firms like Alibaba, Amazon, Netflix or Zoom emerged as “winners” from the lockdowns.
By and large, the consumer sector moved first and fastest. From the necessary contactless experience imposed upon many food and retail companies during the lockdowns to the virtual show rooms in the
manufacturing industry allowing clients to browse and choose the products
they like best, most business-to-consumer companies rapidly understood the need to offer their clients a “beginning-to-end” digital journey.
As some lockdowns came to an end and certain economies crept back to life, similar opportunities emerged in business-to-business applications, particularly in manufacturing where physical-distancing rules had to be put into place at short notice often in challenging environments (e.g. on
assembly lines). As a direct result, the IoT made impressive inroads. Some companies that had been slow in the recent pre-lockdown past to adopt IoT are now embracing it en masse with the specific objective of doing as many things as possible remotely. Equipment maintenance, management
inventory, supplier relations or safety strategies: all of these different activities can now be performed (to a large extent) via a computer. IoT offers companies not only the means to execute and uphold social- distancing rules, but also to reduce costs and implement more agile operations.
During the peak of the pandemic, O2O – online to offline – gained major traction, highlighting the importance of having both an online and offline presence, and opening the door (or perhaps even the floodgates) to eversion.
This phenomenon of blurring the distinction between online and offline as identified by the famous science fiction writer William Gibson who stated
“Our world is everting” [130] with the cyberspace relentlessly opening out has emerged as one of the most potent trends of the post-COVID-19 era.
The pandemic crisis accelerated this phenomenon of eversion because it both forced and encouraged us towards a digital, “weightless” world faster than ever, as more and more economic activity had no choice but to take place digitally: education, consulting, publishing and many others. We could go as far as to say that, for a little while, teleportation supplanted transportation: most executive committee meetings, board meetings, team meetings, brainstorm exercises and other forms of personal or social interaction had to take place remotely. This new reality is captured in the market capitalization of Zoom (the videoconferencing company) that skyrocketed to $70 billion in June 2020, higher (at that time) than that of any US airline. Concurrently, large online companies like Amazon and Alibaba expanded decisively in the O2O business, particularly in food retailing and logistics.
Trends like telemedicine or remote working that expanded extensively during the confinement are unlikely to retreat – for them there will be no return to the status quo that prevailed prior to the pandemic. Telemedicine, in particular, will benefit considerably. For obvious reasons, healthcare is one of the most heavily regulated industries in the world, a fact that
inevitably slows the pace of innovation. But the necessity to address the pandemic with any means available (plus, during the outbreak, the need to protect health workers by allowing them to work remotely) removed some of the regulatory and legislative impediments related to the adoption of telemedicine. In the future, it is certain that more medical care will be delivered remotely. It will in turn accelerate the trend towards more wearable and at-home diagnostics, like smart toilets capable of tracking health data and performing health analyses. Equally, the pandemic may prove to be a boon for online education. In Asia, the shift to online
education has been particularly notable, with a sharp increase in students’
digital enrolments, much higher valuation for online education businesses and more capital available for “ed-tech” start-ups. The flipside of this particular coin will be an increase in pressure on institutions offering more traditional methods of education to validate their worth and justify their fees (as we expand upon a little later).
The speed of expansion has been nothing short of breathtaking. “In Britain, less than 1 percent of initial medical consultations took place via video link in 2019; under lockdown, 100 percent are occurring remotely. In another example, a leading US retailer in 2019 wanted to launch a curbside-delivery business; its plan envisaged taking 18 months. During the lockdown, it went live in less than a week – allowing it to serve its customers while
maintaining the livelihoods of its workforce. Online banking interactions have risen to 90 percent during the crisis, from 10 percent, with no drop-off in quality and an increase in compliance while providing a customer
experience that isn’t just about online banking.” [131] Similar examples abound.
The social mitigation response to the pandemic and the physical-distancing measures imposed during the confinement will also result in e-commerce emerging as an ever-more powerful industry trend. Consumers need products and, if they can’t shop, they will inevitably resort to purchasing them online. As the habit kicks in, people who had never shopped online
before will become comfortable with doing so, while people who were part- time online shoppers before will presumably rely on it more. This was made evident during the lockdowns. In the US, Amazon and Walmart hired a combined 250,000 workers to keep up with the increase in demand and built massive infrastructure to deliver online. This accelerating growth of e- commerce means that the giants of the online retail industry are likely to emerge from the crisis even stronger than they were in the pre-pandemic era. There are always two sides to a story: as the habit of shopping online becomes more prevalent, it will depress bricks-and-mortar (high street and mall) retail still further – a phenomenon explored in more detail in the next sections.