Just as COVID-19 has changed the division between work and home, so it has also altered our shopping behavior. With roughly 95% of the US population in lockdown at the peak of the pandemic crisis, it’s not surprising that COVID-19 delivered a crash course in e-commerce.14 Reports show that there was 129% year-on-year growth in US and Canadian e-commerce orders as of April 21, 2020, and 146% growth in all online retail orders.15 Rising online sales have an impact on the packaging sector, which not only must enable products to arrive safely to consumers, but also must facilitate easy restocking if returned. Consumer demand for more sustainable solutions to packaging is rising, replacing single-use plastic with circular packaging.
In China, property sales closed by the country’s top 30 developers unsurprisingly slumped by 30% during February 2020. Yet, China property developer, Evergrande, managed to double year-on-year sales that month, thanks to aggressive social media marketing and the use of virtual reality technology.16 Similarly, Nike, building on its positive digital retail experience in China during the pandemic, posted a 30% global increase in online sales in the first four months of 2020, even though most of its stores were closed during that period.17
In many developed economies, online shopping was already growing in popularity before the pandemic. COVID-19 has accelerated e-commerce, filling gaps and boosting familiarity with online shopping experiences among late adopters. Starbucks, for example, has been ahead of the consumer shift to remote ordering, with 80% of transactions ‘on-the-go’ prior to the COVID-19 outbreak. And the crisis has only sped up the rollout of a new store format—Starbucks Pickup—to meet and elevate consumer demand as a compliment to its traditional café stores.18
However, the digital infrastructure that makes this and much else possible is unevenly distributed. Just as developed economies roll out 5G technology, with its promised enhancements to processing speed and power, a 2019 Pew analysis showed that 44% of American adults earning less than US$30k a year do not have access to broadband internet.19 Digital exclusion bars those without strong connectivity from the digital economy of the future: it’s about a lot more than the time it takes to download a movie.
The enhanced mobile connectivity of 5G is no mere upgrade; it’s a game changer. It will allow 100 times the number of devices to be connected (enabling the Internet of Things (IoT)) at 100 times the data speed of 4G, using just one tenth of the energy. It will act as a catapult for new business models, as it enables exponential bytes of data from connected devices that advanced analytics can use to develop better insights. Manufacturing can employ remote diagnostics on connected equipment to drive predictive maintenance cycles and increased sales of service and parts. And commercial real estate automation will increase, creating more rich data on, for example, space and energy usage patterns that can lead to efficiencies and savings.
Higher education has been universally affected by the pandemic lockdowns and subsequent social-distancing regulation. The question facing many institutions is how much of their perceived value to students is inextricably linked to the physical, and how much could be effectively delivered leveraging technology. Off-campus courses can attract a wider net of students, increasing access both by offering more flexible class times and by being geographically neutral. Although a large majority (78%) of higher education students felt that the online learning experience was unengaging during COVID-19 crisis, this doesn’t have to be the case.20
Organizations will need to explore an effective blend of the physical and virtual. Parents of children whose schools remain closed, for example, have been underwhelmed by their digital experience with remote education: nearly half (49%) are concerned about the negative impact of the COVID-19 crisis on their children’s learning.21 The balance of in-person and remote ways of delivering services may be different in, say retail and restaurants, than in personal care or early childhood education.
- Focus on three to five critical digital priorities. Digital transformation is a common thread through every dimension of the Lens for Better. What investments can be made to better transform your business model through digital?