The COVID-19 pandemic created a tough economic situation in 2020, shutting down many businesses including restaurants and retail shops during mandatory lock downs. And yet, it was an extraordinary year for e-commerce.
Consumers turned online to purchase goods they could no longer buy in person or chose not to buy in person to avoid exposure to the virus. They opted for home delivery in lieu of in-store pickup staying at home to shelter-in-place. The pace of e-commerce accelerated in months from a rate that normally would have taken years.
Companies that pivoted to online orders and home deliveries were rewarded with increased sales. Target, for example, saw a 154% increase in Q3 sales due to online purchases.
A McKinsey survey of 200 organizations found that more than 90% of executives said they expect the fallout from COVID-19 to fundamentally change the way they do business over the next five years. As consumer buying shifted online, organizations shifted with them.
How can businesses prepare for the rapid changes coming in this new economy?
Companies need to build the foundation for post crisis growth to be prepared as the economy re-opens. Past assumptions that point to years of stable predictable growth are no longer applicable. With pent-up consumer demand the surge will occur at record speed.
The urgency of finding a vaccine for COVID-19 is an example of accelerated change. Efforts to find an effective vaccine that previously took many years of development was accomplished in months, by necessity and by the tools and knowledge that hasten discoveries.
What are the ramifications for business? How do these paradigms affect Go-to-Market models to take products to market? Technology rules outbound and inbound commerce to reach customers. Fulfillment is determined by competitive delivery times and locations as well as packaging houses that distribute them. These verticals now are connecting directly to consumers, reducing the need for channels that in the past were critical to distribution.
Those who innovate during a crisis, focusing on generating new growth versus weathering the storm, outperform their peers over time. To put an organization on a new growth trajectory entails three actions:
- Reallocating for the future by confirming sufficient funds and people to ensure rapid deployment
- Embedding flexibility – reorganizing around crises that inspire new ways of working, embracing “the way we do it now.”
- Hacking processes – focusing on the outcome rather than on activity; no need to spend as much time on tracking and managing processes
The result? Bold innovators emerge from crises ahead of their peers and maintain that advantage for years to come.