Businesses

No doubt that the Covid-19 pandemic has changed the world in different ways. Economies are adopting new strategies to deal with the crisis. While we are consistently striving to come out of this uncertainty, we should not forget that it is nearly impossible to go back to the pre-pandemic phase. Acceptance of a new normal is necessary as the post-Covid years will bring more changes, economically and socially. 

2021 and beyond is going to be a period of transition and rather than trying to stay back and struggling, businesses should look forward to embracing new trends and reshape themselves.

Consumer Optimism and Spending

A McKinsey report on consumer sentiments in the US revealed that since October last year, 40 percent of US consumers are consistently optimistic, and greater spend and out-of-home activities are expected to increase once the younger population receives the vaccine. A Bloomberg report says how the UK economy rebounded after a mass vaccination drive and relaxation of restrictions, which led to an increase in consumer confidence. 

After an economic downturn, people usually spend more when the confidence is restored. Covid changed the way consumers engaged with shopping by shifting everything to digital platforms. This enabled people to spend even while in isolation or lockdown. However, many industries faced serious backlashes during the crisis like tourism, hospitality, and entertainment. Once these sectors bounce back, there will be a visible surge in spending and businesses should be prepared for this.

Acceleration of Digital Transformation

The pandemic-induced changes enabled the rapid acceleration of digital transformation and led to industry-wide adoption of disruptive technologies. A McKinsey survey of global business executives revealed that it is three times likelier than 80 percent of customer interactions became digital since the pandemic. The adoption of disruptive techs like artificial intelligence, intelligent automation, blockchain, etc., has enabled businesses to scale their services and stay at the competitive edge even during such a life-changing crisis. Like a blessing in disguise, this accelerated use of technology has advanced the Industrial Revolution 4.0. 

Since 2020, everything from customer service, eCommerce, and banking to healthcare, supply chain, and inventory management has climbed into digital and virtual platforms. According to the changing consumer behaviors, marketplaces, and consumer demands, many innovations took birth during the crisis. Considering the spike in digital transformation and innovation, the world witnessed a lot of new businesses and startups popping up. According to the data from the US Census Bureau, the third quarter of 2020 saw about 1.5 million business applications. This scenario is going to continue in the new normal phase.

Changing Shopping Behaviour

The digital shift brought by the pandemic had an impact on consumer behaviors. According to an Accenture report, limiting food waste and shopping more healthily consciously became the top two priorities of consumers in the initial stages of the crisis. Businesses are trying to adopt new ways to keep up with the changing shopping patterns. The McKinsey report states that the brands that have not yet figured out how to reach consumers in nascent ways, should better catch up or they will be left behind. Selling directly to consumers might be a bit difficult since retailers need to understand their needs and feedbacks. Thus, businesses should embrace new strategies, technologies, and capabilities to enable efficient direct-to-consumer selling.

Workspace Shift and Increasing Skill Gap

A Gartner survey of 317 CFOs and finance leaders revealed that 74% of respondents will move at least 5% of their previously in-site workforce to permanently remote positions post the pandemic. The shift in workspaces has had an impact on many businesses. Normalizing remote work is not very easy and this transition demands technological advancement and digitization. However, companies have found work from home effective and hence they plan to continue it beyond the pandemic. The biggest challenge in such a scenario is deciding the role of the physical office building and ponder if there needs a change in the infrastructure design. Even if companies are planning to call back their workforce to the office, they need to consider several precautions and changes. 

Another seeping issue is the widening skill gap since the rapid digital transformation and adoption of technology. The previously prevalent skill gap increased with the pandemic-driven digitization and companies should address this. Employees will need reskilling and upskilling to keep their jobs and enhance their knowledge.

Increasing Go Green Initiatives

Considering the depth of the current crisis, we can imagine how a climate crisis will look like. It will be rapid, systematic, and global. The economy would not be ready to face such a wide-ranging issue within less time. Thus, many businesses are arching towards embracing sustainable practices and promising minimal emissions. We witnessed how air qualities in different regions improved while all of us were confined to our homes and the vehicle count decreased drastically. According to reports, in late 2020, Chine pledged to reduce carbon emissions by at least 65% by 2030. Many companies are coming forward with a sustainable strategy to battle climate change, which will engulf the economy in a few years if ignored. A report by The Hindu revealed a surge in sustainable startups amid pandemic in Visakhapatnam, a city in Andhra Pradesh, India. 

These changes are just a few and there are more to look forward to. Businesses should be ready to adapt, adopt, reshape, and innovate in the coming years. The pandemic has redefined the economy and it is high time we accept the ‘new normal’ and get ahead with it. 2021 and beyond will open new avenues for businesses and we can hope that it will create a more responsible society.