The Winds of Change
By: Rich Quintyn
Tags: Consumer, Manufacturing, B2B, Remote Working, Future Of Work

The Winds of Change

Photo by Alesia Kazantceva on Unsplash

A short curation of thoughts I’ve been mulling over the past few weeks.

Shifting Consumer Behaviors

The most obvious change in behaviour is the mass migration to online shopping. A no-brainer.

The crazy thing is that ecommerce still comprises a small percentage of overall sales. In the US, ecommerce accounted for 11% of all retail sales in 2019. For Canada, only 9.5% of all 2019 sales were made online.

The last couple of months will undoubtedly drive these numbers higher by year end. April saw ecommerce sales increase by 49% over March figures, mainly due to online grocery orders. Other segments such as electronics, books and apparel also saw big gains.

Where a lot of change could happen is How and When of shopping.

Let’s start with the How: With people spending more time at home, we’re conversely spending less time at the office, commuting, in malls and other public places. Historically, these venues have either directly or indirectly provided a channel to purchase goods.

Without an in-person element, those impulse purchases at lunch or on a weekend walk have all but disappeared. More recently, consumption purchases are focused on necessities and items to optimize our home environment. Retailers built on in-person experiences (think luxury items, designer clothes, jewellery, vehicles) or without an online component (small businesses) are scrambling.

For those offering in-store (aka curbside) pick-up, almost the entire buying experience has now moved online. Smaller retailers are at disadvantage here with product research and discovery most likely to start on Amazon or Google.

And the When: Consumers are taking longer to make larger purchase decisions. Or postponing them indefinitely. Think real estate, a new car, appliances or a vacation.

With longer sales cycles, we start see a domino effect that impacts everyone along the value chain.

Now a homeowner trying to sell needs to hang onto their property for longer. Concerning if they were already struggling with mortgage payments due to lost employment.

Car dealerships may be faced with a glut of inventory with sales slowed. Running low on customers and space to store cars, workers making the vehicles, transporting them and selling them all become vulnerable.

Photo by Kelly Sikkema on Unsplash

Welcome Back Manufacturing?

Will the pandemic lead to manufacturing jobs returning to developed countries?

We can’t say for certain, but it’s definitely forcing local manufacturers to adjust or pivot in other circumstances.

Covid-19 has strained global supply chains and exposed the risks associated with having manufacturing centralized in and through China.

Shifting trade policy may force many manufacturers to consider options close to or at home. The reshoring of production has become a much more viable option.

Automation could also be a boon for the safety and efficiency of manufacturing already here. Increased use of robotics could allow for distancing within facilities and reduce the need for additional real estate to handle larger volumes.

The Office Goes Virtual

The one change that seems most likely to be permanent is the virtual workforce.

Having to shift employees to remote work almost overnight and to see its effectiveness, many leaders may be hesitant to bringing everyone together again under one roof.

Technological (cloud computing) and demographic (a Millennial-majority workforce) changes are making this much more of a reality than just a few years ago.

Digital-era businesses are positioned to take the lead on this. Clearly evidenced by many large tech companies closing offices for the remainder of 2020.

I’m highly interested to see what happens for B2B businesses.

Commerce in this area is not highly digital and is still underpinned by mechanisms from bygone eras (in-person meetings, trade shows/conferences, faxed/mailed requests, etc.). The lack of common marketplaces for buyers and sellers represents a massive challenge and, correspondingly, opportunity to embrace technology in purchase path.

What changes are you seeing in your industry?

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