Industry disruption intensifies
Nearly half of respondents expect supply chains will need to be reconfigured (49%), especially as the pandemic accelerates the destruction of many traditional, non-digital businesses (48%) (see Figure 2, page 5).
As the virus progressed, supply disruption hit businesses across industries – from healthcare and life sciences to manufacturing and retail – adding to the challenge of responding to shifting customer behaviors.
Linking digital and physical channels to identify, engage with and activate consumers will be a necessary capability to avoid the possibly worse ravages of a predicted severe global recession.
Previously, many digital alternatives – whether for finance, traditional healthcare, education, etc. – existed; there just weren’t that many incentives for businesses or customers to use them. When the pandemic took hold, however, necessity dictated: “Get over it, get going, get used to it.” Many of those changes to consumer and business behaviors are expected to persist, disrupting conventional ways of working in their wake.
For example, retailers had to rapidly innovate, quickly adopting “try-before-you-buy,” “pay later” and curbside pickup services as a result of the virus, even among new demographics such as senior citizens. Many retailers are now reviewing the amount of physical store space they will need when the virus recedes.
What it means
Supply chains built for cost efficiency rather than resilience were stretched to the breaking point as the virus started to shut down the world. Now, expect moves away from “just-in-time,” component-based manufacturing, for example, and significant shifts toward systems and processes that reinforce resilience (e.g., stockpiling, excess capacity, duplicated systems) vs. efficiency.
The way consumers engage with and consume products and services has irrevocably changed as a result of the virus. In just a few painful weeks, elegant, secure, scalable online content with a plethora of digital touchpoints went from nice-to-have to essential for every consumer-facing industry. Linking digital and physical channels to identify, engage with and activate consumers will be a necessary capability to avoid the possibly worse ravages of a predicted severe global recession.