INSIGHTS

The future is digital: insights from COVID-19

  • June 16, 2020
 

COVID-19 is changing the way we work and live. With the increase of remote working and reliance on screen-time for entertainment and social interaction, the digital industry is said to be booming. The Financial Times reports, “Tech companies are still hiring feverishly as they move to take advantage of a world shifting increasingly to digital as a result of the coronavirus, despite mass lay-offs elsewhere and growing concerns over plummeting global markets.”

Companies with existing online infrastructure are seeing new subscribers, more time spent on digital platforms and increased reliance on e-commerce. According to The Economist, “Alphabet, Google’s parent, saw sales rise by 13% in the first quarter compared with the year before, and profits reached $7bn.”

But will this digital trend last?

Although we expect an eventual return to in-person activities, COVID-19 is expected to have a long term impact on digital engagement. For example, “tech phobia” is commonly cited as a reason why some, particularly those over 65, may avoid new technology. However, with no alternatives, this age group are embracing new technology. In addition, younger family members are taking the time to help them get set-up and familiar with these new apps and services. What this means, going forward, is that mobile and digital offerings will have a much wider audience, beyond tech-savvy customers and digital native millennials.

MckInsey recently highlighted the post-pandemic trends beginning to emerge in China. For example, there has been a 55% increase in customers planning a permanent shift to online grocery shopping and an increase of 3-6% percentage points in overall e-commerce. Once people overcome the initial barriers, this data indicates that customers may permanently switch or significantly increase their use of digital services.

These behavioural changes are being supported by rapid transformation of digital infrastructure. On an individual company level, businesses are investing in digital strategy – for example, Hotel Chocolat recently announced a multi-million pound investment plan. There is larger scale investment from business – Alibaba Cloud will be putting $28 billion into developing their infrastructure over the next three years. Further government support will be available for UK businesses driving innovation and development.

Finally, an internet connection is now essential for information regarding the pandemic and accessing vital goods and services for those self-isolating. The Human Rights Watch have emphasised the importance of achieving equal access to digital services (and particularly a good quality internet connection, which thousands are currently struggling with). It is clear that we can expect further investment in digital infrastructure in our future.

Who will thrive in the post COVID-19 world?

Evidently, those with a strong existing digital service will be well placed to retain their position once the pandemic has subsided. COVID-19 has created a form of ‘digital Darwinism’ according to Mary Meeker, author of the annual Internet Trends Report, whereby businesses with a clear digital strategy will leave behind those without. In a recent report, McKinsey outlined several actions that should be taken to meet customer needs and prepare for the future. These actions include:

Focus on care and concern: prioritise employee needs and the wider community by reaching out and staying true to company values.

Meet your customer needs: adapt or create digital services and models that meet remote and social distancing requirements.

Reimagine the post-COVID-19 world: plan for economic cuts, changes to brick and mortar stores and increased uptake of digital channels.

Build agile capabilities for fluid times: utilise resources such as social media and ‘ear to the ground’ insights to respond to fast-moving customer signals.

It is these companies, who support customers through the crisis by providing efficient digital services, that will retain customer loyalty in the post COVID-19 world. Those who look further ahead, to develop exceptional experiences and utilise developments in infrastructure, will thrive in our digital future.