Published Tuesday 1st September 2020
The events surrounding the COVID-19 crisis, both here and across the world, have drastically changed our lives. For the last six months, our standard week of work and leisure has had to take on new forms to match the requirements of this modern time.
For many of us, these changes feel like a short-term necessity, a bump in the road before we can return to normalisation. However, as the pandemic drags on and people become accustomed to this new way of acting, many analysts now believe this year has left a permanent impact on the business world.
In this article, we’re looking at some of the biggest changes that have hit businesses and how this year may have transformed the way companies operate long-term.
The Online Transition
There has been extensive reporting over the last ten years on the continuing growth of online retail, and the subsequent decline in bricks-and-mortar. 2020 has seen that transition reach speeds never seen before, and some analysts are wondering if demand for face-to-face retail will ever return to pre-COVID levels.
The figures for online retail during this year paint a stark picture. According to the ONS, internet sales as a percentage of total retail in the UK rose from 19% in February to over 30% in April, May and June, the highest percentage in history.
With many businesses forced to close during March and April, people once uncertain about using online platforms have been forced to adjust. More consumers have discovered the convenience and price advantage of online shopping, so we can expect a significant percentage to maintain this new practice beyond this year.
However, during these times, visiting stores does provide an opportunity for safe and secure human connection. The ONS has reported that in July, retail sales reached pre-COVID levels for the first time, and the percentage of sales that were online dropped below 30%.
While total high street sales remain low, businesses will be hoping that these early signs of a recovery translate into something more concrete in 2021. How significant the recovery will be, however, could be the difference between success and closure for some firms.
Working from Home
One of the first and most notable changes at the beginning of the coronavirus pandemic was people working from home. The broad lockdown saw many people outside of the manufacturing, construction and production industries turn their homes into offices. Services such as Zoom achieved newfound levels of success, as businesses made a sharp change into a new way of operating.
In August, the UK Government changed its position on working from home, encouraging those that could return to the office. The move was seen as an attempt to help local businesses that had lost the custom of workers. However, many of the biggest companies in London and further afield told their employees to continue working from home. Many companies in the financial sector have spoken of a seismic shift away from the office culture, and offices in general.
Google and Facebook have announced plans for employees to work from home into next year, while Twitter has announced an indefinite model. Financial companies have also jumped on this new trend, which some have found to have little to no impact on productivity as was previously feared.
However, working from home is not for every company. JP Morgan, for example, invested in substantial coronavirus measures for its Canary Wharf office to get people back to their desks safely and securely.
This year has seen working from home become more popular than ever before. There are concerns regarding this as a long-term solution, particularly when it comes to employee rights that may have to be re-written for the change in work styles.
However, the level of success achieved while working from home has piqued the interest of many business leaders, and we would expect some to retain this method of work long into the future.
A New Direction for Vulnerable Industries
The coronavirus pandemic has impacted specific sectors more than most. While online retail has enjoyed a successful few months, other industries have been affected in such a way that entire business models may have to be reimagined.
One of the worst impacted sectors has been travel. Stories of cruise ships dominated much of the early conversation, and losses at businesses large and small have been reported. Demand for travel is likely to remain, but people will be increasingly mindful of how they travel and in what circumstances. Domestic tourism has soared in popularity, while sustainable travel is also hoping to experience a resurgence over the next few years.
Hospitality and leisure have also experienced significant declines in revenue, with new measures forcing businesses to rethink their offering to consumers. While many of these sectors are expecting demand to return in 2021 or 22, to simply reach that point requires new thinking.
Preparing Your Business for the Next Normal
It’s widely excepted that this year will leave an indelible mark on how businesses operate, both domestically and internationally. Once companies have consolidated their position this year, attention needs to turn to how they can adjust their current practices to fall in line with changing expectations going forward.
Here at Expense Reduction Analysts, we are experts at helping major companies review their procurement strategies for long-term success. Our cost reduction consultants work in a range of cost areas, from distribution to property management, ICT to utilities.
If you are considering evaluating your current business practices in preparation for the new future, why not get in touch with our team today? Our experts are ready to help you achieve your financial goals.