Preparing for the post-Covid 19 new normal
The business landscape will forever be changed because of the coronavirus pandemic. Here’s a snapshot of what the new normal might look like.
As the economic damage from the Covid-19 outbreak continues to rise, businesses across a wide range of industries are struggling to cope with the disruption caused by measures aimed at containing the virus.
Certain trends are being accelerated – from online shopping and digital payments to telecommuting and digitalisation – and forcing businesses to change the way they operate as they adapt to changing consumer behaviours. And with social distancing likely to be in place for some time, SMEs will need to adjust to this new normal if they are to succeed in the post-Covid 19 era.
With the rising risk that many businesses will not survive the slowdown despite government support measures, SMEs would do well to understand the trends emerging from the crisis, beef up their resilience and find innovative ways to thrive in the new normal.
To help business owners through this period of unprecedented uncertainty and beyond, here are some key trends that they need to be aware of.
1. Digital adoption accelerates
The coronavirus has made it clear that digitalisation is no longer a luxury, but rather a critical aspect of doing business. In the face of plunging demand due to social distancing, SMEs in F&B, retail and other sectors are turning to ecommerce, digital payments or cloud-based systems to keep costs down and the cash registers ringing.
Covid-19 may be the much-needed catalyst that drives SMES toward digital transformation as part of business solutions. “This is a wake-up call for organisations that have placed too much focus on daily operational needs at the expense of investing in digital business and long-term resilience,” said Sandy Shen, senior director analyst at technology consultancy Gartner, said in a recent article. “Businesses that can shift technology capacity and investments to digital platforms will mitigate the impact of the outbreak and keep their companies running smoothly now, and over the long term.”
2. Ecommerce goes mainstream
The coronavirus has also fast-tracked the growth of online shopping for consumers. Whether it’s for meals, groceries or books, a generation of brick-and-mortar traditionalists have been forced to go online to get their retail fix, and discovering the benefits of doing so for the first time.
This has proved to be a boon for some SMEs in the ecommerce space. For instance, Singapore-based Prestigio Delights, an online seller of premium groceries on ecommerce platform Lazada, has seen a 200% spike in sales during the city-state’s circuit breaker.
3. Digital payments gets a leg-up
Social distancing has also provided an unintended boost for the adoption of contactless digital payment systems among businesses and consumers. Such payments, in the form of cards or e-wallets, are being recommended by authorities around the world as the preferred payment method to avoid the spread of Covid-19.
And with a host of options available, digital payments could be the low-hanging fruit for SMEs who want to embark on their digitalisation journey. DBS, for instance, recently launched a cashless purchasing card for the logistics sector that provides SMEs with a digital solution to settle payments and collections at container depots, eliminating the need for the manual, cash-based processes.
4. Development of supply chain 4.0
Whether its travel or export bans, or the closure of factories and retail channels, the global pandemic has disrupted almost all aspects of global supply chains. Supply chain systems that have poor visibility and flexibility have been particularly vulnerable.
As such, the crisis is likely to accelerate the adoption of next generation supply chain solutions – from data analytics and cloud computing, Internet-of-Things (IoT) and blockchain – as businesses rush to build more resilient supply chain management systems.
5. Telecommuting becomes a norm
With many physical offices forced to close due to the virus, remote work and telecommuting is fast becoming the norm for many businesses; a trend that is likely to persist even after the crisis ends. Apart from helping to prevent the spread of viruses, telecommuting also cuts down on commuting time and provides employees with more flexibility.
In Singapore, a recent survey found that 80% of employees in Singapore wish to continue working from home half their time or more after the circuit breaker period. Yet, effective telecommuting needs to be enabled by having the proper technology infrastructure in place, whether its virtual private networks, video conferencing software, or work collaboration tools.
“During this period, telecommuting becomes the main mode by which many organisations operate. However, this is only feasible for organisations that have adopted digital technologies in their work processes,” said Adrian Tan and Hoi Wai Khin of professional services group RSM Global in an article.
However, do note that when more people are working or studying from home, the potential of cyber threats also increases significantly.
“Cyber criminals know that when more people are communicating online, it’s much easier for them to use deception to gain access to protected information. At the same time, corporate IT and operations teams are working overtime to keep networks running without interruption – potentially impacting their ability to detect malicious activity quickly,” said insurance company Chubb Insurance Singapore Limited. The firm has listed some tips on beefing up your cybersecurity here.
6· Growing importance of business continuity planning and cashflow
The crisis has highlighted the inadequacies of many companies’ business continuity planning (BCP). SMEs that already had well-thought out BCPs in place pre-crisis have fared better during this period.
Many SMEs are also discovering the critical importance of cashflow, the lifeblood of any business. More than anything else, poor cashflow management is likely to sink a business during this challenging period.
“Cashflow is key, it’s the most important aspect of running a business. And so that’s why the majority of our Covid-19 relief measures are centred on cashflow support. Our bankers have also been proactively coaching our SMEs on how they can apply for the various financing options and relief measures digitally, as well as ways to create new income streams during this period,” said Joyce Tee, Group Head of SME Banking at DBS.
BATTLING THE CRISIS WITH TECHNOLOGY
Retailer Audio House quickly adopted digital solutions in response to the Covid-19 crisis
Like many retailers in Singapore, electronics goods retailer Audio House has had to shut its physical channels as a result of Circuit Breaker measures to contain the Covid-19 spread.
With unprecedented social distancing measures in place, the company responded quickly, setting up online channels such as Zoom to engage with customers and even launching Facebook Live sessions to introduce new products and specials.
“We had only four days from the announcement of the circuit breaker till we had to shut down our showroom on 7 April. All our staff had to learn very quickly how to use online platforms to run internal meetings and how to handle customers on a one-to-one basis through virtual platforms. We had a crash course on how to use Zoom,” said Audio House managing director Alvin Lee.
The company also launched the Audio House Online Concierge Service, which allows its sales staff to engage customers on through WhatsApp messages, voice calls, or emails. Meanwhile, the company’s first Facebook Live session held on April 22 was a hit, garnering over 22,000 views and more than 7,000 comments.
Said Mr Lee: “These experiences will definitely transform the way we will work in the future, post-Covid-19. We will also be setting up a whole new online team to take care of our online shoppers moving forward.”
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