Innovating established business models and bringing them to the digital era – something most companies are well aware of. However, the COVID-19 outbreak has shown that digital transformation has not progressed to a level where working from home and digital business models are the norm. Whereas digital offerings received extraordinarily high demand, many physical businesses had to close temporarily and experienced declining revenue. In Italy, the online sale of groceries grew about 20% from February to March 2020, and JD’s China sales at the beginning of February 2020 were up more than 200% compared to the prior year (Callaghan et al., 2020).
Firms with non-digital business models were forced to adjust to the circumstances and invest quick and heavily into digital initiatives. According to a report published by Twilio, 97% of the participating executives stated that the pandemic had accelerated their digital transformation (2020). Almost four out of five executives said that COVID-19 has led to an increase in their budget for digital transformation (Twilio Inc., 2020). At the same time, the pandemic required many companies to implement WFH for the first time with doubts whether this will lead to a sharp decrease in productivity. However, a majority of the firms found themselves in a situation where 67% of the participants expect remote work opportunities after COVID-19 (Twilio Inc., 2020). The flexibility that comes with WFH could help companies to attract necessary talent, which allows capitalising on their digital strategy.
As we can see, COVID-19 and its consequences started a process for non-digital businesses. The question of their future remains unchanged and whether this process will finally bring to the digital era. Do you think COVID-19 could serve as a catalyst for non-digital companies and help them to innovate successfully? Or will it will the pandemic only accelerate their decline?
References:
Callaghan, S., Loesch, M., Rickert, S. and Teichner, W., 2020. At the heart of a crisis: How consumer-health companies can lead in the time of coronavirus. Available at: https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/at-the-heart-of-a-crisis-how-consumer-health-companies-can-lead-in-the-time-of-coronavirus [Accessed 29.09.2020].
(Picture) Morgan, B. 2020. Is COVID-19 Forcing Your Digital Transformation? 12 Steps To Move Faster. Available at: https://www.forbes.com/sites/blakemorgan/2020/04/05/is-covid-19-forcing-your-digital-transformation-12-steps-to-move-faster/ [Accessed 28.09.2020].
Twilio Inc. 2020. COVID-19 DIGITAL ENGAGEMENT REPORT. Available at: https://pages.twilio.com/rs/294-TKB-300/images/UPDATE_Aug_Twilio_COVID-19_Digital_Engagement_Report.pdf [Accessed 29.09.2020].
