In a crisis, a business can grow and profit by responding to the changing dynamics of the marketplace. Crises tend to stimulate change in people and buying behaviours can shift. The opportunity is there for businesses to respond to these changes, in the right way at the right time. A business that has knowledge of its customers' needs and behaviours will be able to serve them better AS WELL as manage their own business more effectively - both now and as we move into a post-pandemic world.
So what has changed since this crisis started? How has the current climate affected how companies operate and do business?
- Customers are facing cost pressures – some buyers, with a diminished or removed pay, have less disposable income. Businesses may have fewer lines of credit open to them, making it more difficult to attract and retain customers - particularly if routes to market have been disrupted through the enforced closure of business premises.
- While spending may not have abruptly halted, consumers and businesses are definitely far more discerning about disposal income while the crisis is upon them. They may become less brand loyal, more price sensitive and are more willing than ever to ‘shop around’ especially with lockdown programs and health concerns about being in public spaces.
- Competition has quite possibly intensified - perhaps from, not usually seen, adjacent sectors - as a result of these changing conditions. Think about the pivot away from eating out to eating at home as just example & how this impacts supply chain & purchasing habits.
The pandemic may force many industries to fundamentally rethink their business model. Just think of one example: restaurants. With so many forced into closure, some have pivoted to selling produce from their suppliers directly to consumers. That's a positive outcome from a crisis: putting quality produce directly in the hands of consumers. It may lead to a rise in food education, development of alternative supply lines, and different ideas about what a restaurant is, or should be.
As The Lowy Institute noted in a recent publication: "the overall dimension of this loss should be kept in perspective — it is a tiny fraction of the disruption experienced in two world wars during the 20th century. If the COVID-19 crisis marks the end of globalisation, it will be the fault of policy responses rather than the result of the epidemic itself. "
Next time: