COVID-19 AND ITS EFFECT ON THE DIGITAL ECONOMY
5 Opportunity areas to explore and exploit
If there is a certain thing now in these times of pandemic is this: We weren’t ready. At least not ready enough to face the multiple challenges that arose despite the virus-driven preparedness of some countries. Before COVID-19, a huge business transformation process was coming together through the mega-success of online services like Netflix, Amazon, Spotify, Uber, among others that currently are part of our everyday lives.
The pandemic can be seen as a wake-up call for businesses that have been neglecting digital transformation and now can’t help but finding themselves immensely unprepared. Social distancing, border shutdowns, and lockdowns have made more than clear how dependent have we become to the digital economy over the last years.
If there were still any doubts about the necessity of digital transformation, COVID-19 has silenced them all. In an everyday more contactless world, you gotta go virtual or go dark, not many choices available since a huge chunk of interactions now must take place virtually. But, if something we have learned about the past recent big crisis is this: With each crisis comes a further shift to the digital economy. Today we want to discuss 5 areas that have proven to effectively adapt to the crisis and seem to draw the map of where to go to rising above the surface during these tough times:
1) CYBERSECURITY
Poor-security WiFi networks and modest online tools knowledge have led to multiple online threats. Take the now-popular video-conference platform Zoom, more than half a million accounts have been sold on hacker forums all over the dark web. With more remote workers having to work from home due to the outbreak each day, many more business opportunities will come to cybersecurity service providers to manage for increasing parts of the worldwide economy.
2) ROBOTICS
From simple things like monitoring stock levels to working with deliveries, using light beams to eradicate hospital viruses, and assisting with sanitation in grocery stores; businesses from all sectors are re-assuring the value automation and robots can provide to reduce the amount of human contact involved in supply chains and also in public health and infectious diseases management.
3) E-COMMERCE & DIGITAL PAYMENTS
According to a survey in late March 2020 by Electronic Transactions Association (ETA), 27% of small businesses in the United States reported an increase in contactless payments made via smartphones and contactless cards. The permanent closure of non-essential retailers across the globe brought up a worldwide surge in online shopping, and digital transfer companies benefited from this. Take for instance Remitly, located in Seattle, which helps people send money overseas, had customer growth beyond 100%, and registered a 40% increase in transactions.
The pandemic forced many people to shop online to get what they need — some for the first time: by mid-March, compared with end-February, e-commerce was up 25%. Grocery spending now represents 8% of overall e-commerce, topping 6% three years ago, according to Adobe Analytics. Based on the Blue Yonder March 2020 survey, 59% of respondents are purchasing physically less than they normally would because they are avoiding going out in public and cannot purchase things in-person. Online buying may well remain as popular even when the immediate threats of the virus will have diminished since newly acquired users have already enjoyed the advantages of convenience along with personal safety.
4) SOCIAL MEDIA
It only seemed natural for artists to find innovative ways to perform “live” during lockdown, with the aid of platforms such as Instagram, Facebook, and Youtube. Google searches for Instagram Live have increased rapidly.
Influencer marketing strategies are experiencing a spike in ad impressions and user engagement on sponsored posts on apps like Instagram and TikTok. Daily audio and video calls on WhatsApp and Messenger doubled as the virus spread, getting to levels usually reported only on Christmas, Thanksgiving, and New Year’s Eve.
5) DATACENTERS
As consumers become more unwavering in their demand for experience high-quality in their digital lives, companies and businesses must ensure they are providing services, and the data that is generated from them, real-time, on-the-go, via any network, to be personalized.
Post-COVID-19, the ability of data centers to ensure excellent customer experience will play an even more important role as big numbers of customers continue to work from home with less on-premises interaction. Companies will seek data center operators that can guarantee secure, ubiquitous, real-time access to services and data backed by superior customer support.
THE ‘NEW NORMAL’
The competitive landscape across all market sectors is changing. Now more than ever business is looking to technology to be agile in the face of disruption and create new digitally enabled business models for the post-COVID-19 “new normal.”
Looking across the analysis of the elements of the digital economy above, it seems that responsiveness, agility, and an understanding of changing customer values seem to have been key to businesses best navigating the pandemic economy. While the current global focus is rightly on navigating this humanitarian and economic crisis, the balance of our analysis also points to an accelerating digital transformation of the global economy.
FINAL THOUGHTS
Digital transformation is more necessary during this crisis, not less. But that doesn’t mean it will look the same as it did before the pandemic. Resources — both in terms of talent and money — will likely be constrained. Digital initiatives may need to be reprioritized based on relevance in the current environment. New problems and opportunities may come to light with greater urgency. For some businesses, the forces of disruption may be so great that the long-term strategic vision will need to be overhauled. And any digital transformation roadmap that does not deliver value at every increment will need to be reimagined. The key is continuing to experiment and innovate with digital solutions front and center. With the right approach, businesses can come out of the fray stronger, more agile, and more customer-centric than before.
With innovation come new technologies and complexity, raising the profile of the best service and support partners for companies looking to re-establish themselves in a new, post-COVID competitive landscape.
If you need a consultation to implement a digital marketing strategy to reach your audience or improving your existing one, please reach out to us.
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