In a survey undertaken in conjunction with Novus at the beginning of April 2020 into what effect the coronavirus pandemic was having on digitisation, we found clear indications that the pace was about to pick up. In this article, we will take a look back at our findings and talk about what has happened since then.
Micael Dahlen, professor in marketing and consumer behaviour at the Stockholm School of Economics, believes that the survey confirms the prevailing belief that the current crisis has hit the accelerator on a necessary transition within Swedish companies: These companies aren’t going to revert once the pandemic is over; they are going to move forward with ‘business as it should be’. Stronger and more sustainable.
4 out of 10 planned to adopt changes in their marketing strategy
IRM, which measures the development of media investments, has recently published their latest quarterly report, which features a summary of investments made in the second quarter of 2020. And it points to some really tough times for the media – investments were down by 18% compared with the second quarter of 2019. In monetary terms, that is almost two million euros. It is clear that a large share of this loss will come back once the market returns to a normal position. But that does not mean that the distribution of media investments will go back to being exactly the same. It is highly likely that the current crisis will force many to try out new pathways as a result of having fewer resources and of new purchasing behaviours. The most likely scenario is that companies will retain whatever exerts the most effect, and this will likely benefit marketing via digital channels.
Catching up on our digital debt
Most businesses have recognised for some time that digitisation is necessary and beneficial in the long run, but it is something we have been putting off. The arrival of Covid-19 meant it was no longer possible to keep waiting. For all the bad that coronavirus has brought us, one positive effect is that it has accelerated necessary digitisation and business development within certain companies by several years.
Customers cheer on change
Consumer behaviour has changed. According to PostNord’s e-Barometer in July, three out of ten say that they now shop more online since the pandemic began. Groceries have seen the largest upswing of all with the number of home deliveries shooting up in July. Sweden has lagged behind other European countries for years when it comes to the home delivery of groceries. Beauty and health also experienced a huge upwards surge, although this is most likely owing to the fact that pharmacy goods fall within this category. It is also interesting to note that the number of online shoppers has risen, primarily within older age groups.
In the long run, more online shopping will also have a significant impact on the real estate sector. The shop-centric concept is largely based on the idea that it is grocery stores which draw in customers, who then take the opportunity to run other errands once they are in the area. If those happy shoppers disappear, then the model runs into serious trouble. We are already seeing new concepts which seek to compensate for this – for example, the Mall of Scandinavia is building padel courts on its roof as a way to pivot away from the increasingly unprofitable realm of retail trade.
In our survey, the overwhelming majority of respondents said that they were planning to reduce how much business travel and face-to-face meetings they do. By no means a surprising outcome, but the fact that our behaviours are going to look different even after the pandemic is something we can be pretty sure about. Major airlines predict that it will take at least three to four years for them to return to “normal levels” of operation. Many predict that the “new normal” will be more like 70% compared with pre-pandemic volumes. This is what the airlines themselves are predicting. Personally, I think the figures will be even lower. Nobody bats an eye lid nowadays if I decide to participate in a meeting over Skype or Zoom. Which means there is now very little motivation to pack a bag and physically travel for that two-and-a-half hour meeting at head office in the outskirts of Düsseldorf. Travelling will, of course, come back and we do have a need to meet up physically, but now that alternatives exist, and are the politically correct option, it is only natural that we will become more selective in choosing when to travel. I believe that digital meetings will have the same revolutionary significance as previous developments such as fax and email for how we work and communicate with each other.