There are moments in time when everything changes. This is one of them. Our habits and our perspectives are not the same now and we may never go back to the way we were, leaving businesses scrambling to figure out what will be the “next normal.” Experts believe there will be a refocusing on business models and innovation that will drive execution, conversion and efficiency. The Innovator rounds up some of the predictions.
“The uncertainty that the crisis is creating for consumers -in their health, their financial positions and more — is already reframing how they view value,” writes CB Insight analyst Laura Kennedy in a research note. “The pandemic could fully transform customers perceptions of what constitutes quality, convenience and engaging shopping experience.”
CB Insights notes three big shifts:
· The surge in online grocery orders will fuel retailers interest in micro-fullfillment centers to make filling orders more profitable.
· Retailers who care about giving shoppers an “experience’ will increasingly adopt livestream shopping, immersive product content and virtual stores to get more attention but will require more attention in an efficiency-focused world. (For more on efficiency during the pandemic read Reuters story on how an Alibaba subsidiary handled deliveries during the worst part of the crisis).
· Retailers will also be looking at ways to maximize profits driving interest in technology that can automate the store, including AI for inventory management, robot associates and cashierless checkout.
On a global Zoom call Thursday with 1000 participants (including The Innovator) tech advisory and investment firm GP Bullhound said it also foresees a permanent change in consumer behavior, accelerating migration from offline to online.
It additionally notes that coronavirus has convinced businesses that even with a market as large as China’s that it is dangerous to rely on one market, accelerating the appetite to go global. Elsa Hu, GP Bullhound’s Hong Kong-based executive director, told webinar participants to “expect a new wave of Chinese tech companies to seek interesting targets in the West.”
Amongst the biggest losers in the crisis are luxury goods, the travel industry, transportation companies like Uber and Lyft, the advertising sector and the telecom sector, according to industry observers.
Jupiter Research notes that in a high impact scenario over 650 million passenger trips will be cancelled due to coronavirus over the next nine months. This is over 80% of the anticipated international passenger trips that were previously forecast before the spread of the virus.
The research assumes that over half of all roaming revenue for the year will be affected, amounting to $25 billion in lost revenue for telecom operators. The research also highlighted the period between June and August as of particular significance when the demand for international travel is high. It forecast that operators could lose up to $12 billion in roaming revenue alone in these three months.
So who will be the winners? While 2019 was a big year for digital health, 2020 could be the biggest yet, according to AngelList. COVID-19 has put enormous pressure on the global healthcare system, which is short-staffed, overwhelmed, and lacking the resources necessary to support the rising number of confirmed coronavirus cases. As a result, more people are turning to digital health companies to play a vital, and virtual, role in safeguarding those stuck at home.
From aging populations, to those with mental health conditions, to those suffering from chronic illness (and everything in between), a growing list of digital health companies are helping with the care and self-management of patients from their homes.
In the past week virtual care platform Bright.md raised $8 million, bringing its total disclosed equity funding to $21 million. Its AI-led SmartExam product frees up providers by automating administrative work and remotely screening patients using its intelligent chat function. Bright.md has offered all U.S. hospitals free access to its Covid-19 evaluation, screening, and escalation tool. It has already screened more than 34,000 patients and claims to have saved 9,500+ hours for providers, notes CB Insights analyst Marcelo Balive.
GP Bullhound noted that in addition the surge of online commerce and digital health services changed habits and a slower economy are having a positive impact on video and music streaming, , home fitness, gaming, edtech, food delivery and software that makes working from home easier. Netflix, Spotify, Zoom and Slack will benefit. These trends are also expected to further strengthen tech giants like Microsoft, Tencent, Amazon, Alibaba, Facebook, notes The New York Times, as the pandemic has deepened reliance on services from the technology industry’s most prominent companies while accelerating trends that were already benefiting them.
In an article this week The Economist lists the companies that look positioned to do well. To get a sense of firms’ resilience it examined the largest 800 or so listed American and European firms. It took their average score on four measures: the cost of insuring their debt against default, operating margins, cash buffers and leverage. Silicon Valley and Big Pharma dominate, with technology firms making up 48 of the top 100. But the Economist notes that not everything may go the top dogs’ way. “Calls for a new social contract may get louder after the virus passes, with firms pressed to offer vital products for lower prices and to give workers more security,” says the article/ Capitalism may become less Darwinian, as weak firms are propped up by bail-outs and subsidised loans. The amount earmarked for cheap business loans and guarantees by governments in America, Britain, France, Germany and Italy is at least $4 trillion, or a fifth of their outstanding non-financial corporate debt. Some industries may temporarily be run as officially sanctioned cartels, colluding in order to stabilize prices and production. That will make it harder for strong firms to assert their advantage. Covid-19 won’t only have lasting effects on society and people’s behavior. It will also alter the structure of global business.”
ALSO IN THE NEWS THIS WEEK
Next month an alliance of Chinese government groups, banks, and technology companies will publicly launch the Blockchain-based Service Network (BSN). It will be among the first blockchain networks to be built and maintained by a central government. Think of it like an operating system, where participants can use existing blockchain programs, or build their own bespoke tools, without having to design a framework from the ground up.
Japanese firms Toyota and NTT are teaming to develop smart city platforms
You can access more of The Innovator’s News In Context articles here.