Covid-19 speeds up transformation to a digital economy
The sudden attack of COVID-19 has resulted in a continuous national lockdown causing a potential slowdown in the economy of the country. Economists assume that if the situation does not normalize soon, disruptions might last longer, which is a scary situation. More than 40% of household consumption is related to services which are under lockdown and mobility restrictions.
Will this cause a permanent shift and transformation in consumer behaviour?
Due to COVID-19, more than 50% of the consumers have shifted to online shopping as they are fearful about stepping out and going to the store.
Consumers have taken the no-contact delivery approach as the key survival strategy, which is leading to faster and permanent digital-adoption momentum.
Brands have also started accepting the shift in online orders. The omnichannel retailers (Offline and online retailers) are experiencing the change in business and revenue on a completely different platform as well.
Retailers will observe more dependency on online orders with the shift of consumers’ behaviour. Either retailer can continue to accept orders via online aggregators which will lead them to a colossal loss towards margin affecting bottom-line, or they can set up their own domain for their store/brand and restrict the revenue directly to themselves. At such instance, for example; in April, Nike decided to pull back from selling on the marketplace and aim more on its direct-to-consumer business.
Brands will be improvising and capitalizing on online personalization efforts to segregate themselves from their competitors and online aggregators.
To increase direct communication with the customers and gain their trust, brands will drive personalized engagement which plays an imperative role in selling essential category items (groceries, medicines and personal care/wellness items).
During this current crisis, the entire business model is a requirement to boost the value of digitalization for both small and big businesses.
There needs to be an organisational goal” or policy to transfer their business to digital – or else they will be left behind.
read full article here http://bwsmartcities.businessworld.in/article/Facebook-RIL-deal-to-boost-digitization-and-job-economy/28-04-2020-190541/
Posted on April 30, 2020
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