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E27 • BY WAN WEI, SOH
Recently, there was a witty response to a multiple-choice question that went viral on social media. Like a tsunami, the COVID-19 pandemic resulted in unprecedented and almost instantaneous cash flow problems to retail, hospitality, travel, and tourism industries globally.
I want to share one story from a friend of mine that works for a larger organization that's trying to figure out how to make all of this work.
The crisis also raised fundamental questions on whether such companies can adapt to Industry 4.0 and cope with the new digital economy. While many companies have already embarked on their digital transformation journey— many others were completely caught off guard by COVID-19, often termed a "black swan" event.
Gone are days when we talk about "digital transformation" as a buzzword. I posit that digital transformation is now a question of survival because the aftermath of COVID-19 is likely to involve lasting and permanent changes in the consumer purchase journey. In about a year, companies that choose to reject the digitalisation process as part of their daily or business continuity plans will not be able to fulfill consumers' expectations and be forced out of business.
Consider the last time you stepped outdoors. Most likely, it was to do something classified under "essential services". Indeed, as countries face lockdowns globally, regular consumers like you and I are forced to stay home and minimise our social activities outdoors.
Let's take the simple example of online grocery shopping as an example. When Singapore's DOSCORN level was raised to orange, RedMart's weekly average number of orders tripled, while FairPrice said that demand for online orders exceeded that during the Lunar New Year period. For the first time in their lives, consumers felt compelled to shop online to feed themselves because they did not want to risk exposure to the virus.
Would consumers return to their original consumption habits "once the virus is brought under control?" I am compelled to say no. This is because the fear and unfamiliarity with the technology used to be a major barrier to online grocery shopping amongst the elderly and even some homemakers.
With this extended period of experimentation due to the circuit breaker in the context of Singapore, new consumption habits start to form. Furthermore, it is likely that Singapore will implement on and off circuit breaker measures until a vaccine is found for this virus. And bear in mind– it just takes 21 days for a new habit to form! There will be consumers who find great convenience and value in shopping for groceries online and will continue in this new habit.
And consumers who switch back to physical offline shopping might not do so entirely: they might feel lazy some days and choose to do part of their grocery shopping online. It is clear then that supermarkets that do not also go digital will lose out to those who do.
Ultimately, digital transformation is about how companies can deliver new and greater value to customers digitally. We look forward to the type of novel consumers' experiences which can emerge out of this period of experimentation, not just in the food industry but across all industries.
It is clear by now that the post-COVID-19 world will be vastly different from the world we used to have before the ordeal. The pandora box is now open and we are now testing the boundaries of what does work digitally, and what does not. Concurrently, consumers' expectations have radically changed to include digital, and this seems to be an irreversible process.
How can companies not "miss the boat" and kick-start their digital transformation then? The key is to remember that digital transformation is not about cutting edge technology and instead about a growth mindset and work culture.
Here are some tips:
All in all, perhaps digital transformation is indeed a question of survival due to the lasting change in consumer experiences and expectations brought about by the COVID-19 pandemic. Companies that are already more advanced in their digitalisation path before the pandemic would have obtained good data from this time period and become aware of which digital areas to hone further. This would have given them a competitive advantage as compared to companies that have zero digital presence.