Digital Square: The Importance of Location in a Pandemic World (Part 1)
Why CXOs planning for the Pandemic and Post-Pandemic world will invest rapidly to be in the “Digital Square” ecosystem? For some companies this strategic focus on mobile will mean relevance or irrelevance, and this 3 series post covers why.
For this post, Waleed and I, have researched how businesses and consumers have adjusted and some have thrived during the coronavirus pandemic in many parts of the world by leveraging mobile technology. In addition to different geographic regions, we also covered covered demographics including those with disabilities and age groups.
Before the DotCom boom eCommerce names like Amazon, Alibaba, and eBay did not exist. Neither did cloud software companies like Salesforce, Slack, or PayPal. Digital convenience for retail, software, payments, and much more has changed markets the world over.
Eventually, after broader adoption of eCommerce, even B2B industrial companies like Exxon and 3M took advantage of this trend and invested in simplifying commerce through the web. Now billions in revenue flow through eCommerce sales for these traditional B2B supply chain companies.
In our current Pandemic world — digital has kept many lights on and saved many lives. Digital is also about to accelerate even faster through mobile smartphones and the team at Mesmer is fascinated by the pace.
We have learned so much in the past few months that we decided to put together our research and share our thoughts with you.
Location in the DotCom Crash
It was November 9, 2000, 5:24 pm, a little warmer and breezier than a usual November day, in NYC. Outside on the pavement, you could see the wind blowing the leaves and litter altogether and an article just went live on CNN Money. You wouldn’t have been alerted on your phone’s news feed because the idea of a mobile phone in everyone’s hands was hard to imagine. You might have been emailed the article or perhaps read it in the next print. Regardless what was in the article wasn’t a surprise, rather just another confirmation of how far things had turned. The article reported that $1.7 trillion in market cap was lost on 270 stocks in just 12 months. Billions of people around the world were feeling the impact.
But the world didn’t stop.
A few months later Randy Garutti opened a hot dog stand called “I ❤ Taxi” in Madison Square Park in New York City. Madison Square Park was not in its best shape. NYC was trying to bring some vitality back and people thought this could be a new Square where people can come together. For this hot dog stand, it turned out to be the right location at the right time. Turns out it was a great location with the right product because there were still many open businesses a stone’s throw away like the Credit Suisse US HQ and residents who would need a place to grab a quick bite and get on with their day. By 2004, this hot dog stand evolved in size and menu and became known as “Shake Shack” and offered natural burgers, thick belly-filling shakes and other gourmet fast-casual fare. Fast forward from this post dotcom apocalyptic world there are 275 Shake Shacks and an average Shake Shack location brings in $4 Million in revenue, much more than an average McDonald’s.
But then came the C19 Pandemic, and in March 2020 sales have gone down 29%.
On April 6, 2020, Randy Garutti, CEO of Shake Shack, had more to say about why that number isn’t lower. “We’re pivoting. The good news is the investments we have made the last few years with digital have been huge for us. Massive indicators for our ability to still be open right now. Our own app… is growing every day”. He now believes that Shake Shack’s mobile apps and pre-order capabilities will drive customer loyalty and engagement post pandemic.
Corporate HQ Location
It was another strong economic growth year in 2017 and location became one of the biggest topics in corporate america. That was the year the most publicized search for a corporate headquarters played out weekly and created over 55,900 articles continuing until today. This never-ending news cycle, as you well know, was driven by Amazon’s search for HQ2. Everybody including yours truly had ideas about which location would win. This topic began to inspire other companies to consider their locations as well.
Aside from the PR noise and controversy around incentives, Amazon in it’s RFP was looking for a large metro area with at least 1 million people, “stable and business-friendly environment”, “potential to attract and retain strong technical talent”. But if you put yourself in the shoes of Amazon executives, no matter what incentives were provided, Amazon needed a strategic location where it can source talent, suppliers and serve its customers. No offense to the state of Alaska, but if Alaska offered Amazon $5 Billion in incentives Amazon would probably still say no for the reasons previously mentioned. Why did Amazon have to pick the DC area? Simple: federal contracts. Why did Amazon have to continue with NYC? Simple: supply of talent, strategic location for distribution of their products, and the biggest regional economy in the US.
C19 seems to have done well for Amazon thanks to the need for social distancing and mobile and eCommerce being the main way to buy.
But what Amazon was not immune from is that all of Amazon’s corporate offices have mostly closed. The physical Corporate Town Hall at most companies is also not relevant.
“Location, Location, Location”
“Location, location, location.” Most people have probably heard this phrase before and it’s for good reason. Being in an easily accessible location for your customers can mean everything for a business. That is why companies hire agents and consultants and run surveys to pick the right place. Then they will spend a considerable amount of time shopping for and investing in the right location.
Location can determine relevance or irrelevance.
The Town Square
A young and dusty American Frontier town called Rose Creek, nestled in a valley between the Rocky Mountains, gained the attention of a robber baron named Bartholomew Bogue in 1879. He recently claimed his stake to a gold mine in the nearby mountainside. Bogue decided that the main purpose of the town inhabitants was to make sure his gold mining activities were successful.
On a hot summer day, not too long after Bogue’s hostile arrival, many of the Rose Creek townspeople crammed into the Church at the center of the Town Square. The people included the Saloon owner, farmers, women and children, and others. The sun was unforgivingly strong, there was dust in the air and sweat was dripping down the wrinkles of the worried foreheads of everyone while they debated their situation.
The pastor was standing at the podium talking to the crowd and said, “It’s only a matter of time before he (Bogue) drives all of us out of here!” Then a congregant in a tired brown suit stood up and quieted everyone with his loud voice by saying, “For the sake of our children!” and then his voice softened and he said, “I believe it’s time that we leave Rose Creek.” Then a man in the back with the sunset lighting the side of his face stood up and responded in an empathetic voice, “I know you’re scared; we all are. But we came far to get here. Suffered losses too painful to bear to make this our home, but we did it.” Then the story of the famous Western movie, the Magnificent Seven plays on in the struggle to save their town.
Globally during the C19 Pandemic many have suffered and might be feeling that we’re losing the spaces and places that we all hold so dear, but all is not lost.
It’s not easy to forget these spaces though. These town squares, cities, and spaces we would connect with each other, perhaps debate, and catch up on our life’s stories. We would sort out our finances, pick up groceries, and consult a doctor. They were our Mecca.
Now it’s Spring 2020. We are in a global Pandemic and physical locations and Town Squares are no longer relevant.
The Digital Square
Although the physical town squares are empty and so are the corporate town halls, but we are still connected. People are still shopping, still debating, still sorting their finances, still consulting physicians and much more. We have congregated in a new global Mecca.
We have found each other and businesses and organizations closer than before. In the palm of our hands. Our mobile phones. The “digital square” if you will.
Consumers in the Pandemic Digital Square
Social Jetlag: It’s a Thing in the Pandemic World
Waleed here. Thought I’d share a personal story. My 2020 New Year’s resolution. The only thing different this year compared to my past attempts was the fact that I had finally summoned enough strength and self-discipline to drag myself to the gym this time. I was consistent. I lost a few pounds and it felt great! I truly understood why consistency, rhythm, and most of all routine were key elements in achieving a set goal. A few weeks in quarantine and 10 pounds later, here we are, back to square one. It started with sleeping in for a few extra hours on a Monday morning. I usually work during evenings and given that pretty much everything outside was closed, I figured this would be the best use of my time. Admittedly, waking up 3 hours later than usual on a Monday felt great! It felt like I had achieved the lifestyle I had always dreamed of. Sleep in till late, munch on a few snacks, binge on that new Netflix release after finishing work for the day. Maybe have some more snacks?
Ideal.
And that right there was when the snowball started rolling down the hill. I realized soon enough that this wasn’t working though. This was not sustainable. My extroverted self had started craving social interaction and my newly formed haphazard lifestyle wasn’t helping my situation at all.
The World Economic Forum reports that COVID 19 related anxiety can potentially have a negative impact on the sleep patterns of an individual. Constant refreshing of social streams can lead to an irregular sleeping pattern which affects the brain’s circadian rhythm resulting in a form of “social jetlag”. The report further explains how this can have a direct impact on the overall immunity of an individual by affecting their mood, memory, behavior and learning ability.
As I felt the growing dissonance between my biological and social clocks, I began noticing that I was being impacted by the effects of social jetlag mentioned in the report. Recently I’ve even found myself confused about what day of the week it is more often than not. I’ve noticed how others are struggling to keep a track of time as well. Just last week on one of our regular customer calls both sides realized that it was Good Friday and it was supposed to be a holiday. But the call had already started and both parties thought they might as well finish the meeting because the only other option for both of us was household chores.
What to do with the currency we have the most of? Time
If there is one thing we now have in abundance, which for most of our lives has been scarce, it would be time. Long commute times, grocery shopping, going to the gym, dining out, going to the movies, all of these add up to quite a bit of time spent. Now that these routine excursions are not possible, we find ourselves in uncharted territory. We’re just not used to this amount of free time.
Frank (not his real name to protect privacy), an international student attending school in New York is one of many that had to travel back to his home country. For students like him, mobile technology is not only helping them continue their education using video conferencing apps such as Zoom but also maintain their social lives through apps like Houseparty. When Frank isn’t attending lectures, he usually finds himself spending time with his friends playing games on the Houseparty app. He had the following to say about the app.
“There’s not much to do around the house once I’m done attending my lectures or working on assignments. To say that I miss my life in New York with friends would be an understatement. Houseparty is making it a little easier though. I get to see my friends for a bit every day, play some games, and share a few laughs. Keeps you going in these tough times. It isn’t half bad I’d say.”
It turns out that Frank is not the only one who’s turning to the app to stay connected. With average weekly downloads increasing from approximately 130,000 in February to more than 2 million downloads per week Houseparty is a perfect example of how consumers like Frank have flocked to mobile apps to fill the social void that has been created in their lives due to the crisis. The app hasn’t only proven to be an instant hit with Millennials and Gen Z teenagers that crave social interaction but even their parents. Many under lockdown globally have enjoyed family dinners and drinks with friends while playing different games. Even companies have used the app to schedule virtual happy hours in a bid to keep employees connected and keep morale high.
Covid 19 — Turning competitors into partners
However, it’s not just apps like Houseparty that are enjoying growth during these uncertain times. According to a forecast conducted by Techcrunch, mobile app spending is estimated to continue growing and double by 2024 despite a hit to the global economy due to the COVID-19 crisis. Worldwide consumer spending in 2019 was recorded at $85 billion and this figure is expected to reach $171 billion by 2024. The data also shows at least an 80% growth in revenue in even the slowest growing regions on both Apple’s App Store and Google’s Play Store by 2024. This signifies the continued presence and increased involvement of mobile in how the world runs. In fact, mobile apps will be extremely relevant in our fight against the COVID-19 as companies such as Apple and Google partner with each other to leverage contact tracing technology. This is perhaps why estimates suggest that global mobile app downloads will reach 183.7 billion downloads by 2024, which is up 9% from an earlier (pre-COVID-19) forecast that had initially accounted for 7 billion lesser app downloads worldwide.
Let’s be honest, we never really imagined Apple and Google ever working in tandem. But these are unprecedented times when the world needs to come together to fight this crisis. It turns out that their intended solution will utilize Bluetooth technology in smartphones to alert users if they’ve been in contact with someone infected with the virus through an app. The fact that symptoms are not noticeable for the first few days of contracting the virus can be very dangerous. But if people can be alerted to having been potentially exposed to the virus, they can immediately isolate themselves and save countless lives.
Another unprecedented partnership has been seen in the pharmaceutical industry. Two of the world’s biggest vaccine manufacturers, GSK and Sanofi are joining hands in their fight against COVID-19 in an effort to bring a treatment to the market in the next 12 to 18 months. Sanofi’s head of vaccines was reported to have said that it makes logical sense for the two companies to partner up as each holds a piece to the puzzle. The companies hope to combine their existing product portfolios with experience in different areas to produce an effective vaccine that is jointly produced.
About
Zain Ali and Waleed Masood are part of Mesmer. Mesmer is the leader in RPAD which stands for Robotic Process Automation in Development. Mesmer’s AI bots automate the full-stack testing of mobile apps for Customers Experience and Accessibility for ADA WCAG compliance. For more information visit: mesmerhq.com
