Covid-19 has established itself as possibly the single largest global force for change in recent times. For practitioners of the PESTEL (political, economic, social, technological, environmental, legal) strategy, the E of Environment is bold and several fonts bigger than the others in the acronym, dragging along with it the other E (economy), the S (social) and the T (technology) as enablers to keep the economy’s wheels turning despite the hardships.
Historically, during calamities such as the Spanish Flu or the two World Wars, humanity has been spurred into innovation. The Bell Telephone Company found an opportunity to motivate people through a newspaper ad: “People in quarantine are not isolated if they have a Bell Telephone.” It went on to say “The Bell service brings cheer and encouragement to the sick and is of value in countless other ways.” One 1918 newspaper article described high-school students “holding regular telephonic conversations with their instructors.” Some shops put out signboards urging customers to call-in their orders and not visit the stores — leveraging the “modern” technology then available — the telephone.
The 1918 pandemic also brought about long-lasting change to the film industry in the US. With 80-90 per cent of movie theatres closed for 2-6 months, as location shooting came to a halt, Adolph Zukor, co-founder of Paramount pictures, saw the opportunity to control the movie theatres. He spearheaded the establishment of the studio system, which continues to dominate Hollywood. The vertical integration that followed, with studios fighting for control over the theatres, led to the creation of the system that still prevails in Hollywood today, which decides how movies are made, sold and shown to the world.
Array of products and services
Since 1918, mankind’s needs have evolved to span several categories; each with many nuances, some even catering to the concept of: “customer of one.” We are addicted to these products and services as never before, therefore companies have to address the challenge facing all of us: how does one continue to satisfactorily experience the dizzying array of products and services that we depend on in the Covid and post-pandemic era? We need to understand couple of things before we find answers to this poser.
Firstly, in India, it is commonplace to see pictures of two-wheeler riders with a face mask but no helmet. This tells us how deeply and quickly the messages of personal protection during the pandemic have been adopted. It is safe to reckon that such an aggressively adopted social-change of equipping oneself with the tools of a mask and a pair of gloves, following rituals with soap and detergent and the concept of physical distancing is here to stay for some time to come. Let’s call this “mask-hands-physical-distancing” social trend as the MH-PD behaviour.
Second, several media articles have described the debilitating effect the pandemic has had on various industries. It is not that the demand for their products and services have vaporised; customers are no longer willing to consume their products and services “delivered” to them in the “conventional” manner any more, due to hygiene concerns.
Implications for real estate, transport
To summarise a few habits that have undergone abrupt and possibly long-lasting change due to the MH-PD behaviour shift: the way we consume food and beverages, and the way we dress — with even brick-and-mortar companies having their offices run in WFH mode. It has had implications on commercial real-estate, public transport and travel and tourism — sectors that have seen a scale of impact that might have already pushed some players beyond the point of no return.
Others may follow if they do not reinvent themselves even in the “post-Covid” era by seizing the opportunities that have been throwm up during the pandemic. Companies would do well to figure out the “how” part of presenting and delivering their products and services to customers because that will be crucial to the way they do business in the future.
For example, people may long to savour their favourite restaurant dish but may not want to visit the restaurant to pick it up as they are apprehensive about the hygiene of the delivery person and/or the cooks at the restaurant or the people hanging around the counters to pick up their delivery. If the restaurant is a chain, it could seriously consider investing in a no-hands, fully automated plant to dish out favourite menu items, which can then be delivered or picked up by the customers.
Such innovation will not only help keep the business alive but enable faster growth, facilitated by the sudden increase in production capacity, reach and possible word-of-mouth effect about observing MH-PD processes. Companies could also think of offering partly processed food, of the ready-to-eat kind or even create and market kits comprising the right proportions of raw materials that can be put together at home, given that people are now keen to try out new recipes.
Once customers start experiencing such product and service deliveries, their habits are most likely to continue much after the pandemic as well, because it is convenient and avoids the hassle of driving, parking and waiting for a table at one’s favourite restaurant. It is hygienic and it does not cost a bomb to have a blast, with yummy food, at home!
Pre-fab construction
Similarly, the purchase of high-end apparel may come down, with WFH becoming a more acceptable and productive way of working, while attractive, easy-to-wear and maintain home-wear may see a significant rise in demand, requiring some innovation in fashion design, yarn and fabric perhaps.
Labour shortages due to migrant labourers not willing to move to other geographies may lead to a rise in pre-fab construction, which is less labour and skill-intensive. This may mean many homes and buildings and layouts may start looking the same but this may come along with economies of scale and speed, which are also positives for the customers.
In short, there are many more ways to spur the flagging economy, and India, well known for its ‘jugaad’, should use the time to make a serious shift in business operations, and bet big on some of the emerging scenarios that align with the MH-PD behaviour. Companies that succeed in such a shift are likely to see rapid growth, and could be the drivers that push the elephantine Indian economy into a canter.
( The writer is Managing Partner at CorEssentials, a strategy consultancy.)