The year 2020 didn’t get onto the most prosperous start. Entire countries under lockdown, widespread travel restrictions, and manufacturing closures have become a commonplace due to the coronavirus outbreak. The global economy, and sectors like tourism and supply chains are in total disarray.
The current outbreak of coronavirus poses a number of challenges for brands. Global growth rates have taken a hit. The change in consumer behaviour as they take protective actions against the virus is likely to have immense social and economic impact.
One of the immediate impacts of the pandemic is the scarcity of products and a disruption of supply chains. China has been the factory to the world. With companies across the world dependent on China for its manufacturing prowess, brands are already experiencing a hit in their supplies.
The crisis is unfolding and worsening by the day. The short–term responses to the crisis taken so far are wise and necessary too. Operationally, most brands are dealing with the immediate situation but are we ready for the long-term impact of this crisis? Let’s try and understand some of the short- and long-term impacts.
One man's loss is another man's gain
While brick-and-mortar stores are getting a big hit, the online stores are likely to boom. The healthcare and wellbeing brands are likely to have better growth prospects in coming years with increased investments in healthcare and sanitation sectors.
Goes without saying that these are the most challenging times for brand owners and marketers. There were signs of a slowdown already and the COVID-19 outbreak has increased the apprehensions. Product launches have been deferred, malls and restaurants have downed shutters, movie theatres are closed, streets are deserted, and travel has come to a grinding halt.
But some are also seeing it as an extraordinary opportunity for brands to engage with their consumers. As more and more people around the globe get locked up in their homes, brands have captive audiences glued on to their television or mobile screens consuming a lot of content.
In these uncertain times, brands are treading cautiously looking for the most cost-effective ways to deliver products and services. It may seem obvious to cut marketing spends, but that’s only a short-term solution that is bound to have long-term consequences.
This is the time where brands need to stand by their consumers, add value to their lives, and earn their trust. Maintaining brand visibility in the market is essential.
Consumers, on the other hand, may be spending less but are still spending. They don’t want to risk wasting in these troubled times. They want to buy the right products/services from the brands they trust. As brands we would need to figure out what they’re spending majorly on.
Necessity is the mother of all inventions. We have seen technology getting stronger under challenging times like these. As events and conferences are experimenting with their online alternatives, there will be a dire need of innovation in the technological sector to enable business as usual. To replicate in-person business opportunities or networking over live streaming will be a challenge.
Many brands are grappling with the need to equip their employees to work from home. While the marketing and branding agencies seem to be better equipped in this regard, the growing need for remote interactions during the pandemic will only lead brands into investing in developing better infrastructure for remote work.
Telehealth is now a reality where doctors can diagnose, treat, and operate patients without the need of the patient being physically near them. We’ve already heard of such cases from China during its combat against coronavirus.
Even e-commerce brands are using the power of technology and algorithms to limit the number of units per person that can be ordered to prevent hoarding.
Online content consumption will tick up worldwide
The COVID-19 pandemic is going to boost digital media consumption as people spend more time at home. The greatest beneficiaries are going to be the social media network brands as people turn to these platforms to connect with their loved ones or to access relevant information. OTT platforms like Netflix and Amazon Prime are also likely to see rise in both subscription and view times as people seek news and entertainment.
A spike in digital payments
We had already witnessed increased adoption of digital payment methods in India after the demonetisation phase in 2016. WHO has already recommended contactless payments to limit the spread of the virus through cash. In a do-or-die situation, consumers who would have otherwise continued with cash, are also likely to make the shift thus speeding up the adoption curve of these cashless payment brands.
E-commerce will emerge with a bigger share
As physical shops close down and consumers try and avoid crowded stores, e-commerce is bound to grow. Consumers who usually prefer visiting the grocery shop personally but are practising social distancing at this moment will get onto online buying for the first time. At least some of them will find it convenient enough to stick around post the crisis.
However, such a surge in demand is also going to overwhelm logistics brands and their employees in the short term.
E-commerce brands would have to revisit their fulfillment and delivery strategies in order to cope with the surge and also in an endeavour to keep their employees safe.
These are exceedingly testing times for brands. By the time the COVID-19 crisis is over, we will realise the real impact it will have on the way brands conduct their businesses as well our societies at large. It’s likely to boost online shopping, online education, flexibility in work-from-home policies, increased healthcare investments, better sanitation facilities, to think of a few.
It is likely to change how brands configure their supply chains and their dependencies on a few manufacturing centres. Hopefully, it will also make us more responsible towards our environment that we take so much for granted. Be prepared for a changed world.
(Edited by Evelyn Ratnakumar)
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)