How will coronavirus change the world?
One thing we can be sure of is that after this pandemic nothing will be the same. Changes are here to stay and are making us rethink our business models.
One thing we can be sure of is that after this pandemic nothing will be the same. Changes are here to stay and are making us rethink our business models.
What seemed to be faraway news from China at the beginning of the year has now turned into a global crisis without precedent. The Covid-19 outbreak quickly became a pandemic, altering the world’s social and economic order at a furious pace.
Coronavirus doesn’t care about borders. It’s a crisis that has hit advanced economies, emerging markets and developing economies alike. The International Monetary Fund expects a global contraction of 3%, a recession which would leave behind the 0.1% fall that was the product of the 2009 financial crisis.
We currently know that this pandemic will bring about negative consequences, yet what we do not really know is what the consequences will be, the extent they will have, or what their cost will be, since if there is one thing that characterizes this virus is uncertainty. This is why today the scenario is unforeseeable for most sectors of the economy and critical for others.
At the present time, globally speaking, we’re going through a stage of isolation and restriction. We will eventually enter a stage of stabilization and, later on, a stage of recovery. During this period, there were sectors such as the food and beverage industry, cleaning and hygiene supplies and personal hygiene products, which even saw an increase in sales in relation to the same month last year, due to the behavior of consumers, who wanted to stock up on these goods. However, this way of stocking up (added to the purchase limits which are imposed as the virus advances) will make their demand contract in the next stages of the crisis.
The retail industry is a sector which has been generally badly hit from the beginning. The isolation and social distancing measures adopted to avoid infection have resulted in little movement of people, preventing customers from buying in stores. Many businesses decided to close their doors and sell through digital channels. However, this sector is not damaged by physical restrictions only. During the stage of isolation, consumers need to distribute their available income differently, allocating a higher percentage for saving and buying essential items.
The industrial sector has been severely damaged from the start, as the problem was initially one of supply. Some of the factors which caused problems to this sector were a sharp decrease in the prices for industrial raw materials, production delays due to an excess of inventory, disruptions to supply networks and less staff in factories.
Both the hospitality and travel sectors are, without doubt, the big losers in this crisis, not just because reservations and tickets are practically non-existent, but also because it will take them long to recover. When other sectors go through the stage of recovery, this industry will still show negative variations compared to the previous year.
We could write many more lines in order to analyze the situation for each sector in particular, but we’d only be displeased. It’s time to ask ourselves what the world will be like when this is finally over because, if we can be sure of one thing, it’s that nothing will be the same.
So I ask you, are you rethinking your business model? Are you introducing the necessary structural changes for your business to adapt to the new consumer?
Today more than ever we need to strengthen the digital channel as a sales channel, redefining and innovating on services such as logistics and maximizing value. We need to know that, after the pandemic, a new type of consumer will arise; this consumer will be much more demanding and conscious, and will require new services, experiences and greater transparency.
There will also be changes in supply. Supply networks and production processes will be shorter, and possibly less globalized. There will be a trend towards less risky models.
The scenario will also be different when it comes to marketing. We’ll have to redefine strategies which will have to be exclusively directed towards digital marketing. This new consumer will also demand greater support from business, so it would be interesting to consider creating communities to develop a close relationship with the user, despite the fact that physical proximity would be impossible.
It’s crucial that this global reality teaches us something. Nothing will be the same; changes are here to stay. It’s up to each of us to work and adapt as quickly as possible so that we’re not harmed neither by the virus nor by the world after the pandemic.
Now more than ever we need to look for the right tools in order to grow. At CreateTrade Capital we support your business and help you finance your domestic and international purchase orders. Trust us, we’re here to help you.
Until next time!
By Julieta Colella for Create Trade
Photo created by freepik - www.freepik.com
