To rephrase German entrepreneur and religious leader Dieter F. Uchtdorf in today’s time of the 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-seen-before 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 is yet to be developed, businesses, on the other hand, can “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 look at the pandemic as an opportunity; a chance to implement, if not done already, digital technology to tackle the 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:
Sub-category 1 (a): Those that have implemented data analytics
Sub-category 1 (b): Those that have not
For Category 2, the only advice we can give is to use the COVID-19 pandemic as a start-off 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 means digitalized business operations have to become data-centric as soon as possible, which is where our sub-categories come in.
Both the categories and their sub-classes today face the same question — has COVID-19 made online buying the new normal?
While we may not like to play the role of an oracle to try and answer that question, this much is certain: there shall be a residual effect of the disease on everybody’s buying habits post the pandemic.
Maybe not everyone who was forced to start purchasing online during COVID-19 shall continue to use online shopping as the ONLY channel, but most will definitely continue using it as an additional one. An example would be where a shopper who previously only purchased from a store will, after the pandemic, browse the online catalog, shortlist a few items, and then visit the nearest store to check on the availability. This means now is the time as good 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 these responses, though different, have to be scientific and based on an analysis of the available facts, which is exactly what data analytics offers. But, for that, your business has to be on a digital platform to help it collect all the data.
Allow us to explain:
Let’s look at scenario 1: till COVID-19 lasts: There are many surveys out there that show that online shopping or e-commerce activity has gone north during the pandemic. This report by digitalcommerce360.com says in North America alone, the number of online orders for web-only online retailers was up 52% year-over-year in the US and Canada for the 2 weeks of March 22 through April 4, according to an online tracker from marketing platform Emarsys and analytics platform GoodData.
Another one by Adobe Analytics showed a 25% boost in average U.S. daily online sales from March 13-15 compared with March 1-11. The growth is primarily due to a boost in online grocery sales, which have increased 100% in daily U.S. online sales March 13-15 compared with average daily sales March 1-11, it said.
The surge is being attributed by experts to:
- Panic buying, as COVID-19 brought in times of uncertainty;
- Crowd mentality, where otherwise-reluctant shoppers started buying because others were simply stocking up; and
- Social distancing, which stopped otherwise offline shoppers to move online to buy.
Another survey by Engine found that people were spending on average 10-30% more online.
All three reasons shall not remain 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 in times of 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 diseases’ progress, requires an agile and 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, the shopping behavior of your customers keeps changing to meet the crisis. One week, they are buying in bulk, the next, they are only stocking up on what’s necessary for only that week, or 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 ensure it can manage this kind of erratic demand and supply?
Also, what about marketing? The messaging during the COVID-19 pandemic and after have to be different. Adobe says e-commerce sites doubled ad spend in less than a month, from $4.8 million for the week of Feb. 17 to $9.6 million for the week of March 9, according to data from MediaRadar.
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 be looking at the tools in data analytics that can be utilized for decision-making.
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