"All industries are bound to be reinvented by a digital product or service sooner or later"
To say as such these days might be considered a cliché, but it remains as relevant as ever. The Coronavirus has shaken up the ways we do things, but is also bringing changes that creates new possibilities. The enterprises that are proactive are the ones that will be able to gain from this.
In certain industries, digital has rewritten the rules book and forced the players to reinvent themselves in order to survive. In other industries however, those changes have yet to be implemented. We hear a lot of people talking about the « digital revolution », but the courage to really transform the business model and the culture around it is more rare. The courage to bring down those walls, climb above internal politics and the comfort of immobility afflicts many of our most precious organisations, that is hard to find. The courage to take action , to take those first steps and start new initiatives, that is even harder to find.
Warning. It is too easy to point the finger at the leaders and managers of these enterprises. Large organizations do not always move rapidly, but people sometimes take even longer to change their habits. How many enterprises have been bold and launched initiatives that have not had the expected success? Because we must not be deluded: even if today everyone agrees that digital has transformed our lives, one fact remains: the digitization of services, products and business models too often remains marginal in many regards. If we take the image created by Everett Rogers in his theory of the diffusion of innovations, in most industries, digital initiatives still affect only a handful of early adopters, the majority of people still having not changed their ways of doing things. In several industries, digital initiatives have not yet managed to cross the chasm of Geoffrey A. Moore.
Examples abound. By 2020, the majority of retailers are likely to be e-commerce (if you are a retailer but still do not do e-commerce, you are looking for trouble). Despite everything, analysts estimate that only 10.9% of retail sales in the United States are made online and that 47% of these sales are made by Amazon. Closer to home, it is possible to shop online with one of our client IGA since 1996. According to an article published in La Presse on March 24, 2020, only 1.5% of all food sales were made online before the crisis.
The end of traditional TV has been predicted for several years with the advent of online content distribution platforms like Netflix and the phenomenon of cord-cutters. Despite those factors, it is estimated that 25% of American households might no longer subscribe to cable by the end of 2022. In Quebec, 79% of Quebecers are still subscribed to a cable service.
In most industries and with many of our clients, transformation is more akin to a marathon than a sprint.
Necessity is the mother of invention.
- Platon, La République
All this could be called to change.
We are incredibly fortunate at Mirego to be at the forefront of what is happening in many industries today. The crisis in which we are currently navigating makes us experience something quite unique in history. In the space of a few weeks, several sectors could make more progress than they have made in the last 10 years. The digital transformation of several industries, announced and predicted for decades, is currently taking place in fast motion before our confined eyes. We have, all of us, taken a leap forward of several years.
Everywhere around the world, confined people are forced to use online services to support themselves or get entertainment at a rate never seen before in history. Once they adopt the behaviors, the changes in their habits might end up being permanent, as could their impacts on the markets. Several digital companies have known the best weeks of their existence since the start of the pandemic. Others have shown ingenuity in pivoting and seizing opportunities:
- Amazon has announced the hiring of 100,000 employees to meet the increased demand.
- The number of people shopping online has exploded since the start of the pandemic. Here in Quebec, this number rose to 9% as of March 24, according to Sylvain Charlebois. Instacart has announced the hiring of 300,000 people as the past few weeks have obviously been the busiest in the history of the San Francisco business.
- The National Health Service (NHS) in the United Kingdom had to react quickly and approve 11 solution providers in less than 48 hours (!) for video consultation in order to allow adequate follow-up of patients during the crisis.
- Video conferencing software broke all download records last week. Video conferencing, usually used for business meetings, is now used by classes, health professionals or simply by groups of friends who want to get together. In fact, the Houseparty app (which belongs to Epic, the firm behind Fortnite) has suddenly gone viral and has generated several million downloads in the past few weeks.
- The US Congress is evaluating the possibility of online voting.
- Uber has started delivering medication to Brazil and groceries to several countries such as France, Spain, England and Australia.
- Capsule, New York-based digital pharmacy saw its new customers acquisition rate increase by 500% in one week and had its best day ever last Friday according to The Information
- Ethos, the online only insurance company in Silicon Valley, has seen a 200% increase in its submissions since the start of the pandemic, according to The Information.
- More than 30,000 artists and creators created an account on the Patreon platform in March, a much higher number than usual. The platform allows musicians, artists, podcasters, writers, journalists and creators of all kinds to easily monetize their audience by offering them online subscriptions.
- The Notarize platform must hire 1,000 notaries in order to respond to the explosion in demand for its online notarial services.
- The Winnie platform, which helps parents in the United States find child care, has launched a tool to help parents who have to work even if their daycare is closed find emergency care.
- ClassPass, which usually helps people who wish to train to find the best gym for them, has launched an online course service.
- In Quebec, several retailers have shown ingenuity in order to meet demand. For example, our client, Chocolats Favoris, created several new ways to serve their customers in just a few days: contactless car service, home delivery and Uber Eats delivery. Besides, it's Easter next weekend. Hurry up and place your orders! ;)
What is happening right now has the potential to be a turning point for many enterprises. The longer this crisis lasts, the more significant the changes it will bring about. Enterprises will disappear. Consumer habits will be forever changed. New leaders will emerge.
Many have good reason to be discouraged by what is happening now. Some of our customers have difficulty meeting demand. Others are going through very difficult times that are heartbreaking. Despite everything, I remain fundamentally optimistic; change brings uncertainties, but also opportunities. It's up to us to seize them. No one knows what tomorrow will be like, but we all have a unique opportunity right now to roll up our sleeves, rewrite the rules and build the future.
It's cliché to say it today, but I feel it's more true now than ever: the time for digital transformation has come. It’s time for everyone to focus on agility, innovation and action. It is time to put talks aside and take action.