The Rise of the Low Touch Economy
5 minutes read
Most people are currently focused on the everyday measures dealing with the Coronavirus outbreak, but what about the period after this outbreak? Will there be a period after Coronavirus and what will it look like?
It is expected that the post Coronavirus era will be shaped by the new habits that we have developed during the isolation period. It will affect the way we interact with other people, the way we eat, the way we exercise, how we manage our health and socialize.
Why will the world as we know it be different?
Why will the world as we know it be different?
The UK Research and Innovation agency ( https://coronavirusexplained.ukri.org/en/ ) claims that the creation of a vaccine will take 12-18 months. Until a vaccine is found or herd immunity is reached, there will be continuous ups and downs or disruptions in our personal and business lives.
The general rules will vary depending on how strong the outbreak is: limited gatherings, travel restrictions, hygiene requirements, and the protection of the elderly and the vulnerable groups.
We will adopt new habits through a changed way of working. More people will embrace the benefits of home-office, e-health and e-commerce platforms as these will exponentially gain in popularity.
A few expected shifts in Consumer Behaviour
1.) People will feel more lonely and anxious because of the isolation. Some of them will lose jobs and will be confronted with sickness or different relationship issues. People are already being recorded buying more pets due to loneliness. Online entertainment is also booming and we are seeing an increased need for online coaching and therapy services.
2.) There will be less trust in the hygiene of people or products because we are unable to know who could be infected and how a product has been handled. Organizations and people will expect proof of good health status of the subjects they are interacting with. Contactless ways of paying or delivering products are already increasing.
3.) Extended travel restrictions, even within a country are already happening and they are going to continue. Travel and hospitality industries are suffering substantial consequences and loss. The risk of another outbreak will have to be taken into consideration when travelling. Local tourism will be profiting from this situation because local places and offerings will suddenly be perceived as exotic and even luxurious.
5.) Rising tensions and conflicts between businesses due to the new and unpredictable situation many businesses have found themselves in. That might result in the sudden end of many contract agreements and business relationships.
Consequently, firms will need legal support. New and more modern legal automation tools might rise and many lawyers will have to shift to providing part or all of their services online.
6.) We can predict that global levels of unemployment will increase considerably, and force people to rethink their careers or switch to new ones. People might also become more entrepreneurial to be able to earn extra money.
The International Labor Organization expects millions of newly unemployed workers due to the COVID-19 crisis. From 5 to 25 million additional workers will lose their jobs globally, depending on how strong the impact of the crisis will be on the economy. The numbers are confirmed by the level of unemployment during the last economic recession of 2008. The higher the level of unemployment, the longer it will take for the economy to recover.
7.) We will demand home delivery for everything. This might result in the changes within the existing supply chain, drop off to address or delivery of frozen goods will be in demand.
8.) We will also have limited contact with elderly people or vulnerable groups. Until a vaccine is found group meetings will be limited. This will influence family gatherings like weddings, funerals, birthday parties, baby showers and other similar events. We will have to rethink our way of socialising.
9.) We will want to express our identity with something more than just our job titles. For many people, their professional role is an important part of their identity. The prolonged home office experience will have a lasting impact on that: we will want to express more of our identity through fashion, online avatars and design.
Adapting your strategy based on the expected changes.
In the following table, we present the possible strategies that should be developed in order to tackle the different crisis scenarios:
We can already see that the hardest-hit businesses are within the travel, hospitality and leisure industries. The stock prices in these industries experienced a big drop in value. It is very hard to predict when people will feel again safe enough to engage in such activities.
However, those businesses and services connected with the “homely life” have already benefited from this situation and will do so even more in the coming months.
No one knows for sure what the real consequences of the health crisis will be and how big the economic impact is going to be on our society. But we know that this forced change in human behaviour has to be taken into consideration when crafting and reevaluating our strategies.
The businesses should take into consideration how each change in consumer behaviour will affect them and what they can do in adapting so. If you are a small shop how will you make your goods available to your customer, how you can deliver them. If you are a psychologist, how can you be reachable to your customer, have a Zoom talk, have your own platform, make sure that you can help them solve their anxiousness problems. If you are an event organizer for families think how older people could have easy access to your online platform: is it simple enough and can they learn quick enough to use it in order to take part in a virtual event with their families? If you operate in the distribution of goods, how can you develop systems or platforms to reach your customers effectively?
The business world has to pay close attention to changes. Companies should use this time to invest in R&D (The 100 most innovative companies spend even more on R&D during a recession!). They should help their employees and collaborators learn new skills and be fast in adopting new technologies and ways of creating revenue flows.
This is a hard period for our economies, together we can build strategies that will help us get past this crisis as winners. If you want to learn more about how you can fine-tune your marketing for the digital marketplace, make it crisis-proof and ready for the low touch economy, drop me an email and we can have a chat about it!
Author: Borka Hajdin