Why businesses must continue to evolve in a post-Covid environment
As Australian businesses emerge from extended pandemic lockdowns, attention is focussing on formulating strategies for growth in coming years. Pieter DeGunst, Managing Director at Tecala Group, outlines why businesses must continue to invest and evolve to tap into the big opportunities emerging out of the new environment.
Uncertain economic conditions and geopolitical tensions have forced many organisations to adjust their plans. Roadmaps that had been in place prior to Covid-19 are being rewritten to reflect shifts in everything from supply chains to customer demands.
When the pandemic first began, large numbers of businesses put investments on hold. Rather than expanding operations and chasing market share, they circled the wagons and waited to determine the fallout from the virus.
Now, more than two years later, attitudes are changing. Senior business leaders can see opportunities emerging and are pushing ahead with programs to take advantage of them.
Capital that had been held in reserve is now being allocated to new ventures. Not only will this aid the resumption of growth, it is likely to accelerate it.
Interestingly, many of the large business consulting firms believe Australia is at the start of a growth curve that will last the next decade. The consensus view is that a return to business-as-usual in a post-Covid world will not be sufficient and a faster pace will be needed.
The market has changed
In the months ahead, business strategies will need to take into account some fundamental shifts that have occurred in the marketplace. These changes will influence everything from capital investments and expansion to marketing and client retention. Some of the biggest shifts include:
Consumer behaviour has been reset
Recent research shows that since the pandemic began, more than 50% of Australians have adopted new shopping behaviours, and 30% have tried new brands. Depending on the segment, digital adoption has increased by between 30 and 50%, and 60% of baby boomers are now regularly using these channels. This has significant implications for businesses across all sectors.
Further reading: McKinsey & Company outlines covid-19's impact on consumers.
Employee experience has been transformed
Many businesses are now offering levels of flexibility for their staff that would not have even been contemplated just a few years ago. Back in 2008, only about 1% of Australian employees worked primarily from home. By 2019, about one-third of the working population was regularly working from home and, in 2022, almost the entire corporate population now does this.
Technology has driven a huge increase in productivity and efficiency while working from home and forced a fundamental acceptance of video conferencing and remote meetings that is unlikely to ever disappear.
Further reading: Five ways to improve employee experience in 2022.
Social responsibility is now a driver of demand
The rise of the more ethical consumer is not new, though the trend has been more prevalent among younger segments compared with their older peers. However, now more than 20% of every demographic group reports that Covid-19 has made them more likely to purchase from companies that sell sustainable and eco-friendly products.
In addition, consumer attitudes to locally produced products have also shifted. There is a significant opportunity to challenge conventional wisdom that says companies must manufacture in low-cost countries. Micro factories and automation present true capabilities to return to local manufacturing and eliminate material and shipping constraints.
The concept of what is ‘possible’ has changed
Changes that have previously taken organisations months or years to achieve are now taking just weeks or even days. One Australian grocery retailer doubled its online order volume in a single month through rapid redeployment of people and innovative offerings.
An Australian brewer increased and switched production from bulk B2B to small package sizes in just one week. Gin distillers retooled their operations to be able to rapidly produce hand sanitizer to meet the demand generated by the pandemic. Meanwhile, suppliers with 3-D printing capability were able to shift to production of personal protective equipment, and temporarily closed restaurants innovated by packaging cocktails and high-end food for home-dining experiences.
People’s beliefs about what it is possible to achieve have shifted, and the implications for future investment and growth are profound.
The road ahead
Recognising these changes will be important for businesses as they formulate roadmaps for the next few years. Senior leaders will need to recognise that the plans they had in place prior to Covid-19 may no longer generate the results that had been expected.
However, while conditions may have evolved, big opportunities still exist. The businesses that invest strategically and position themselves to take advantage of these changes in customer demand will be best positioned to thrive.
