At this point, there’s no question that COVID-19 is changing the behavior of consumers for both the long and short terms. The impacts of the virus are profound, and they’re exposing weaknesses in our public health policies, infrastructure, and businesses. Many companies are on the brink—or past the brink—of failure.
Further, it is human nature to react strongly and viscerally to emergencies. All too often, this devolves into panic. Such reactions only exacerbate the stresses on our economy and the businesses that support it. Panic and confusion can make it difficult for business leaders to objectively analyze the true nature of the threat and formulate and implement effective responses.
COVID-19 is straining the economic and social fabric, and it is important to understand that it presents challenges as well as opportunities for everyone to step up, adjust, and do things differently.
But what can we do?
In the short term, companies must organize crisis management and response teams and provide them with the needed authority to draft and implement innovative solutions. Many businesses have been able to respond quickly to the crisis and put in place new policies and adjust their internal operations to respond to the threat of the virus and government-mandated restrictions. However, these adjustments were primarily intended to support business internally, rather than to support how businesses interact with their customers externally. In this regard, many were unprepared to deal with supply chain interruptions, fulfillment challenges, and increased demand on their ecommerce operations.
These challenges underscored the need to think strategically about making fundamental changes to business operations, rather than thinking only in tactical terms. We must assume that COVID-19 is not a one-and-done crisis. There is every indication that it will return seasonally, as influenza does now. And until researchers develop a vaccine, we could well endure severe virus reprises for months—even years. In addition, research from Astound and others indicates that this crisis has also changed consumer behavior, and that these changes are likely here to stay.
In other words, we are now in a new world or “new normal,” one that obligates companies to develop a wholly new set of long-term strategies. Companies need to be rigorous in their self-assessments. They must stress-test their systems for a variety of new-world potential realities, mercilessly discarding those approaches that speak to the past rather than the future.
Brands must create a set of use cases, drills, and what-if scenarios, methodically evaluating every aspect of operations to ensure they are flexible, resilient, and responsive to consumer needs. There must be extensive investigation into re-engineering supply chains, moving away from traditional, warehouse-bound fulfillment models, and employing third-party logistics and drop-shipping and innovative point-to-point and micro-fulfillment models.
One clear trend has emerged already: the need for business models that can adjust capacity on demand. SaaS models brought flexibility to IT; now is the time for bringing SaaS-like models to business operations. The ability to scale up or down quickly is an evolutionary trait that will assure dominance in the new post-COVID-19 commerce ecosystem. Retailers who understand this—and implement functional systems such as commerce, order management, fulfillment, and business operations that reflect that understanding—will thrive.
This article also appears in the Astound Insights special report COVID-19 and the Consumer. Download your copy today for recent data on shifting consumer behavior and more insights from our experts.