Navigating Covid-19 Crisis: Digitalization for Business Survival
“Covid-19 Pandemic has brought businesses to its lowest point due to restrictions and operational absence. However, some are successfully tackled this issue by implementing Digitization Strategy. So what they did to digitize their product and how it might change the way of business operations?”
Coronavirus pandemic has brought significant challenges to the world economy. Countries from all segments of wealth have been affected negatively by the lockdowns imposed to control the spread of the virus. The virus emerged early in 2020 in China, which spread out quickly across the globe. Governments imposed numerous measures including closing down air travel, implementing social-distancing and stay-at-home policies to disrupt the spread of the coronavirus. As people stayed indoors and transportation between places closed, business operations ceased, sales dwindled, and the economy took a turn for the worse, prompting a crisis that affected a huge portion of the world economy, including the small business and also the big ballers.
Some industries suffered great deal of damage because of coronavirus. One of the Industry that suffered from this tragic pandemy is Aviation. IATA, a trade association of more than 300 airlines worldwide estimated that airline revenues would plummet by $252 billion in 2020. Travel industries face similar results thanks to countries closing their borders. Some other sectors such as the energy sector as well as banking, retail, entertainment, and construction companies among others are hit hard as stay-at-home policies hampered consumer demands as well as greatly limiting their operations. Some others instead are thriving. Netflix are able to reap 32% increase of market share thanks to their streaming model fulfilling people’s entertainment needs while staying indoors. E-Commerce, digital, and delivery businesses are also facing an overwhelming increase in demand. Indeed those sectors have the right business model for this pandemic era, especially by being able to provide services to people staying indoors. Some other businesses, however, managed to limp through the crisis through tactics that reflected the current needs.
Burger King are giving additional bonus meals for purchases made through their app to encourage drive-through purchase which has significantly fewer risks of coronavirus exposure than dine-in option. World retailers such as Walmart, Carrefour and Tesco are introducing curbside pickup to prevent consumers gathering in their store which could become Covid-19 spread points. Smaller, nimbler businesses are more innovative and aggressive. CrossFit, a gym chain specializing in gymnastics has turned their classes digital since the lockdown policies were implemented. CrossFit franchisee Chase Ingraham closed his gym and instead began opening Zoom classes to teach his consumers digitally and allowing them to bring home necessary gym equipment. In Indonesia, street food vendors are increasingly turning towards online food delivery services such as Go-Food and GrabFood in order to cater to consumers staying in-doors.
The changes in business models implemented by businesses to stay afloat during the Coronavirus pandemic reflected the basic changes in consumer behavior, namely the need for a continuous products utilization while being confined at home. Government restrictions on opening stores and restaurants also fostered businesses to change their business model. Numerous models have appeared, but these can be generalized into a rising phenomenon: digitalization. Take the example of Crossfit. Their normal business model relies on people gathering in a single location to receive instruction on their fitness programs. However, Coronavirus has forced instructors to rely on digital platforms such as Zoom or WebEx to train while being “remote” at their own homes. Food vendors in Indonesia are turning into online food delivery apps to remotely serve their food from their stalls to the consumers’ home. Teleconference apps Zoom and Google Hangouts are in high-demands, along with other more specialized platforms such as educational storytelling app Yarn which faced 97% increase of user during the pandemic, or BYJU’s, a Bangladeshi online educational and tutoring firm providing online class apps that has seen two-fold increase in their apps usage during the crisis.
Indeed digitalization is a fitting solution to the current situation because it helped maintain connections between business and its consumers. However, turning into a digital model is rarely an easy task and requires effortful action. First of all, businesses need to evaluate their relationship with customers. What kind of transaction happens between the business and its customers? Intangible products are easier to transfer digitally because they can be decoded into materials that can be easily transferred through the internet. For example, intensive communications that become the method of transaction of educational and consulting business can be transferred through videoconference, teleconference methods, or emails depending on the language intensity and the need of visual cues such as found in gym dojo businesses. Some businesses are harder to digitalize, for example those that involve the transaction of tangible products. Businesses should be creative in adapting digital solutions into their transaction. For example, food vendors cannot imagine themselves digitally transferring their food products to the customers, but they can instead digitalize the ordering process by creating online web where menus are shown and consumer can put their order, and then improvising on how to deliver their products to the consumer with minimal contact, such as through home-delivery options or curbside pickups. This can also work for other tangible products and indeed is the basis of e-commerce sales.
Aside from customer interaction, digitalization can also be implemented within the company, that is, how employees interact with one another. The pandemic restriction applies for all kinds of gatherings and this includes the gathering of employees in a business, therefore, digital solutions can be applied to replace normal employee interactions. Again, teleconference or videoconference applications came to the rescue. As lockdown and stay-at-home policies hit the world, businesses worldwide have turned their employees to work at home using virtual video conference services, or more traditional methods such as Google Drive. Furthermore, as coronavirus pandemic has forced firms to cut costs and hence led them to reduce their workforce. This in turn gave them the time needed to cut jobs and turn them digital to help streamline their business. For example, cutting accounting jobs and instead working on automated accounting services. This measures may help firms in cutting cost and perform their streamlining operations which may be constrained during the normal period.
In order to swim into a digitalized world, the company needs to know how they should intensify their engagement with the customer. Digitalization is not only a matter of creating sophisticated products, or using sophisticated tools at the office, but it is also when businesses incorporate digital tools that can help customers answer their needs. Customers did not only want to get their food, but they wanted to get it safely without crowding, then came Uber with its UberEats application to channel food vendors with customers. Employees do not want to expose themselves to coronavirus by meeting their colleagues directly, so teleconference or videoconference applications are used. Therefore, digitalization should be viewed as not only an overly complex method of changing business operations or renewing their model into a futuristic, digital-punk machine, but can also be done as a small, incremental application of available digital technology to help answer consumer needs.
Recently, there are many startup companies that are setted to help businesses with product digitalization and customer engagement. They help the company to widening market coverage, optimizing product value, and channelling communication between customer and businesses. Their platform, moreover, can be employed by any form and scale of businesses. For example, Thuisbezorgd, a Dutch online platform for food delivery, serves customers from McDonalds to local cafes. As the pandemy is still the customer’s largest concern, Businesses can still operate with the enormous contribution of Digital platforms.
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