The Low Touch Economy, and The Global Change in Retail.
COVID-19 will have many losers, but let’s focus on the winners. The shock of the Coronavirus has brought us to party, celebrate and hold business meetings on Zoom, to download & experiment with Grocery apps, attend Easter & Passover service on YouTube, etc. etc. Choices that the majority of us would have never considered before, have now become necessities.
The Winners:
Marketplaces: As foot traffic to non-grocery retail stores declined more than 97 percent during the last two weeks in March, online market places like Amazon and Walmart are having trouble keeping up with demand. Giving priority to essential products, over non-essentials.
Retailers of essentials are clear winners: Clorox, Lysol, paper towels, disinfectants, etc. are sold out pretty much everywhere. From: store shelves to online market places.
Digitally native brands are outperforming forecasts. They are seeing an increase in mobile engagement and big drops in Customer Acquisition Costs (CAC).
Grocery apps see record downloads. Instacart, Walmart Grocery, and Shipt have seen respectively 218%, 160%, and 124% increases in average daily downloads compared to the previous month, according to research from Apptopia. Consumers have become more confident about shopping for groceries online, while stores are witnessing a sharp decrease in instore foot traffic.
Home Services and Entertainment: With people working from home and spending more time indoors, the focus on at-home comfort and higher quality living has been winning big! Streaming services, like Disney+, attained more than 50-million subscribers since the Coronavirus outbreak, for example.
What changes can we expect after COVID? From the examples above, we can clearly expect many changes and clear shifts in consumer behavior. Some changes and shifts were already happening gradually; however, we will now see an acceleration and more immediate behavioral change arising from social distancing and the inability to physically acquire products.
- Delivery & inspection robots are being seen at Airports, Hotels, and Supermarkets since 2018. Stop & Shop had already started to deploy robots to their stores in 2019 to enable associates to spend more time serving and interfacing with customers. Expect more!
- Police helmets with Infrared vision to catch potential Coronavirus carriers with the help of futuristic-looking smart helmets. It can also display pedestrians’ personal information on a virtual screen inside; dystopian imagery that is undesirable or frightening.
- F1 switched to esports, with real drivers but instead of racing in real cars, they were racing in front of screens.
- The Supreme Court will start hosting court cases virtually this May, including cases over Trump tax records and Electoral College. And The National Law Review is already offering Tips for Taking Depositions by Videoconference in the Age of COVID-19.
- Religious Worship is starting to be broadcast online: Synagogues, such as the Central Synagogue are broadcasting services and Easter Mass was broadcast from your favorite Church around the world or where your favorite celebrity attends.
Other unexpected changes are happening too:
- Zoom.us: Beginning April 18th, Zoom premium customers, will be able to customize which data center regions your account can use. Opting in or out of a specific data center region for real-time meetings.
- Immune certification, Germany will begin to issue coronavirus antibody certificates to allow quarantined to re-enter society to facilitate a proper transition into post-lockdown life, as Chancellor Angela Merkel’s handling of the crisis has led to a boost in the polls.
- Consumers and organizations are becoming much more careful about the people and products they interact with. Resulting packaging redesigns, sharing of personal health records and temperature, retail/ hospitality formats with free service add-ons focused on cleanliness, Preference towards high-quality products over ‘natural’, Contact-free deliveries and drop-offs.
- Contactless everything, beginning with Payments systems to add an extra safety measure for customers and store associates amid the coronavirus (COVID-19) outbreak.
NOW, WHAT? Set up your new economy growth initiative, and ask yourself & your teams!!!
Assess the impact:
- What is the Low Touch economy, and how will it impact my industry & job?
- How will my customers, workforce, market(s), and business overall change in the mid to long term?
Develop a Growth Strategy
- How can I grow and outperform competitors?
- How should I focus my investments and what are the new rules?
Go on offense
- Develop opportunity pipeline: a short-term pipeline of new business opportunities, driven by new customer behaviors & expectations.
- Develop an M&A Roadmap for inorganic growth opportunities to make your company stronger. Many companies are very late in digital transformation.
Change is already here. Acknowledging it is the next step. So, use this moment and time to make changes, refocus and to reinvent the culture of your companies in a positive way.
[1] Board of Innovation — https://www.boardofinnovation.com/low-touch-economy/
