To rephrase German entrepreneur and religious leader Dieter F. Uchtdorf in today's pandemic: It is your reaction to adversity, not the adversity itself, that determines how your business story will develop hereon.
The COVID-19 pandemic has put the world of business into a never-before-seen state of turmoil. It has disrupted productivity, manufacturing, service, and supply chains globally.
COVID-19 has put a question mark over:
(a) How to do business during the pandemic
(b) How to conduct business in its aftermath
While a shot to inoculate the masses against the COVID-19 pandemic has yet to be developed, businesses can, on the other hand, "protect" themselves from the fallout with data analytics.
Analytics is the one scientific response available to businesses to tackle the challenges posed by the COVID-19 pandemic in an agile and relevant manner.
Businesses of all kinds must view the pandemic as an opportunity; a chance to implement, if not already done, digital technology to tackle market chaos.
It would not be wrong to say that today, global businesses, including retail, can be compartmentalized into 2:
Category 1: Those that have turned digital
Category 2: Those that haven't (or have only made half-hearted attempts before the pandemic.
These can be further sub-classified as:
Subcategory 1 (a): Those that have implemented data analytics
Subcategory 1 (b): Those that have not
For Category 2, the only advice we can give is to use the COVID-19 pandemic as a starting point for their digital transformation.
For Category 1 businesses, their early digitalization investments may have started to pay off even before the pandemic broke out.
Why does Your Business need To Become Data-centric?
To ensure a steady ship through today's choppy seas, digitalized business operations have to become data-centric as soon as possible, which is where our subcategories come in.
Both the categories and their subclasses face the same question today: has COVID-19 made online shopping the new normal?
While we may not like to play the role of an oracle to answer that question, this much is certain: there will be a residual effect of the disease on everybody's buying habits post-pandemic.
Maybe not everyone who was forced to start purchasing online during COVID-19 shall continue to use online shopping as the ONLY channel. Still, most will definitely continue using it as an additional one. An example would be a shopper who previously purchased only from a store, who, after the pandemic, browses the online catalog, shortlists a few items, and then visits the nearest store to check availability. This means now is as good a time as any for the Category 2 businesses, irrespective of size or revenue, to transform themselves into digital companies.
COVID-19 has had an enormous impact on the marketing and sales activities of many industries, especially retail, health, and entertainment, though that's not the complete list. These sectors need to calibrate their responses for these two scenarios:
Scenario 1: till the pandemic lasts
Scenario 2: post-COVID-19
Both responses, though different, have to be scientific and grounded in an analysis of the available facts, which is precisely what data analytics offers. But for that, your business needs to be on a digital platform to collect all the data.
Allow us to explain:
Let's look at scenario 1: till COVID-19 lasts. Many surveys show that online shopping, or e-commerce activity, has increased during the pandemic. This report by digitalcommerce360.com says that in North America alone, the number of online orders for web-only retailers was up 52% year-over-year in the US and Canada for the 2 weeks of March, March 22 to April 4, according to an online tracker from marketing platform Emarsys and analytics platform GoodData.
Another Adobe Analytics report showed a 25% boost in average US online sales from March 13-15 compared with March 1-11. The growth is primarily due to a 100% increase in online grocery sales, which rose from 3.3% of daily US online sales on March 13-15 compared with 1.7% from March 1-11, it said.
Experts are attributing the surge to:
- Panic buying as COVID-19 brought during times of uncertainty.
- Crowd mentality, where otherwise-reluctant shoppers started buying because others were stocking up; and
- Social distancing has forced people to move online to buy.
Another survey by Engine found that people were spending on average 10-30% more online.
All three reasons will no longer be valid once the pandemic is over. But while COVID-19 lasts, they shall be a reality, and businesses need to be prepared for them, simultaneously factoring in disruption to productivity, supply chains, product availability, etc.
This is where data analytics steps in — for Scenario 1, i.e., marketing and selling amid COVID-19.
In the interest of brevity, this blog post will focus on the use of data analytics at the customer-facing end, but let's not forget that analytics can also be a formidable ally for back-ops.
For Category 1(a) (enterprises that implemented data analytics before the pandemic), the waning and waxing of customer demand, depending on the disease's progress, necessitate an agile, scientific response. Businesses must continuously update data points and datasets with revised behavior and sentiment data that will provide real-time insights into customer behavior, customer journey, and buying patterns.
All your decision-making must be data-optimized, and your teams must know how to exploit this rather "mixed signal", high-volume flow of data.
True that because we live in unusual times it requires unusual responses. But even atypical responses need to be backed by data analytics.
Here's an example: Because of the virus, your customers' shopping behavior keeps changing to meet the crisis. One week, they buy in bulk; the next, they only stock up on what's necessary for that week or is otherwise in short supply. New customers may or may not exhibit the same pattern or spend power. On the other hand, your supply chain has become unreliable. So, how prepared is your store analytically to manage this kind of erratic demand and supply?
Also, what about marketing? The messaging during the COVID-19 pandemic and after has to be different. Adobe says e-commerce sites doubled ad spend in less than a month, from $4.8 million for the week of February 17 to $4.8 million for the week of March 9, according to data.
With almost the entire world in lockdown, online is the only channel available for advertising, marketing, and sales till the pandemic lasts.
In the 2nd part of this blog, we shall look at the tools in data analytics that can support decision-making.
