5 ways the world will be different after the coronavirus pandemicThe Aftermath of Global Pandemic
While there is no way to tell exactly what the economic damage from the global coronavirus pandemic will be, it is sure that it might represent one of the biggest shocks of recent decades. An analysis of the global payments industry by McKinsey & Company predicts that coronavirus will result in a loss of revenues of between 165 and 210 billion dollars in 2020, while IMF warns about the severity of the economic fallout.
The New Normal
The world cannot return to the former status quo once the recession is over, said the United Nations Secretary-General Antonio Guterres. The post-coronavirus world will be very much different, and the leading thinkers agree that there’s going to be a permanent shift in political and economic power in ways that will become apparent only later.
It seems that apart from economy and politics, human behaviour is inherently changing in every possible way, and that we as people showed the ability to adap to these challenging times in an extraordinariliy quick period of time.
Being isolated has put a lot of pressure on business too, but some manage to cope by extensively leaning on digital channels while some faced this situation completely unprepared.
However, all is not bleak. We have a few things we can learn from. The first one is the last "new normal" where we had the opportunity to see some enduring examples from the Great Recession, from brands like Netflix, Lego, Amazon.
They kept on expanding their horizons through "investment, innovation, customer treatment, alternative pricing models, and transparency in communications", according to Ipsos.
While their competitors weren't as agile in communication or clinged to old business models, brands lik Netflix or Amazon pursued consumers in the right way and according to Ipsos "delivered value in a time of contextual fluidity and behavioural change".
We can also learn from other countries, who faced the virus earlier and who reacted more quickly in not just limiting the spread of the desease but also jumping up the economy, like China and South Korea.
The Future Is In Digital
There is no doubt that the post-coronavirus world will be much more digital than in the past. According to a new analysis from UNCTAD, the coronavirus crisis has accelerated the uptake of digital solutions, tools, and services, speeding up the global transition towards a digital economy.
Joe McDonnell, head of WGSN Insight, predicts a forced acceleration of digital transformation. “The companies which are best placed to benefit from the situations are those which offer comfort, convenience or necessity for consumers. For brands there’s space to think about the digitization of your product, not just the delivery,” he said.
And digitalization is indeed happening as you are reading this, because many in the payment environment recognized the need the Coronavirus created for digital solutions.
Banks, like Singapore's DBS have been investing in digitizing as much of their business as possible and are now in times like these inspiring others to follow its lead.
More precisely, according to Finextra the bank "has digitalised 11 common trade financing processes to reduce reliance on physical over-the-counter exchanges and is offering clients 50 free FAST transactions a month to cut the need for physical cheque handling. Meanwhile, to help train people on how to use digital tools, the bank is running webinars and customised teach-ins as well as digitising its DBS SME Academy's training courses."
The Future Is In Online Shopping
majority of shopping has already moved online. Businesses that didn't have an
online option faced financial ruin, and those who already had some
capabilities ramped up their offerings. Before the crisis, only 4% of
Americans ordered groceries online, but since the self-isolation orders went
into effect, many shoppers are shifting their grocery shopping online.
Businesses that want to remain competitive after the crisis is over, will have to figure out ways to have steady online services in the future, to accommodate the shift in consumers’ newly learned habits.
Both businesses big and small are finding the ray of hope in ecommerce amidst the crisis. L'Oreal, for example, reported their sales rose for 6.4% in China, for the same period last year.
Many experts are also advising many in the payment environment to update their digital strategies. One of the advice given by McKinsey is to "expand digital-wallet solutions beyond payments".
"Commonwealth of Australia (CBA) reports digital wallet users spent a AUS$1 billion (about $630 million) in March 2020, a high for the bank that's part of an acceleration to digital wallets and contactless cards during the coronavirus crisis."
And by enabling digital-wallet solutions beyond payments, they mean enabling wallets to provide other functions, such as digital IDs and tracking and reporting transaction.
With feature like these, your phone could tell you when it is too crowded to go shopping or alert you when your goods are ready to pick up when you arrive. Such capabilities will make a difference to the reopening of some stores.
In addition, organizations that have viable solutions for both consumers and retailers to make seamless and contactless payments would certainly have a distinctive advantage over rivals.
The Future Is In Contactless Technologies
"PayPal has seen business trends stay strong with the growth of online shopping during stay-at-home edicts globally. The company indicated the negative impact from the virus could be about only one percentage point."
Piers Fawkes, founder of retail innovation and research firm
PSFK, believes that just as SARS 2003 outbreak led to the growth of ecommerce
in China, the impact of coronavirus might lead to the potential rise of facial
recognition technology or an increase in grocery delivery.
Coronavirus has made us hyper-aware of every touchable surface that could transmit the disease, so in the future an option to pay for goods and services that does not require any physical contact is likely to gain traction. It is also expected that we’ll have fewer touch screens and more voice interfaces and machine vision interfaces.
So, voice recognition be vital not just for making payments but also for stopping fraudsters. Despite coronavirus taking a toll on physical retail and utilities, people use call centers and this kind of interaction with customers is becoming very important.
But, in crises like these, fraudsters are trying to take advantage of call center workers that can be overwhelmed in situations like these. Therefore, sophisticated speech recognition systems, that rely as much on what's being said as on the voice inflection of those who say it, are needed do combat the currently rising number of fraud.
Nevertheless, there are many contactless options available for payment, but not everyone is used to using it. For example, mobile wallets provide a great contactless solution, but adoption has been limited so far. According to PaymentsSource, "contactless mobile payments using NFC wallets at the point of sale account for just around 2% of in-store" transactions in the U.S.
"Retailers in Europe have a keen interest in developing proprietary mobile wallets and coronavirus could be another catalyst, along with open banking regulations that are expanding merchants’ options"
The Future Is In Wearables
Wearables have been growing in popularity over the years, and as the sensor technology continues to advance, the demand for them will only grow. This is particularly important if we have in mind that wearables have a great potential for in-home diagnostics. Huge amount of data they collect and aggregate about our health and physical state could potentially predict similar events in the future or help in containing them.
MediBioSense, a UK-based startup, works on wearable patches for real-time monitoring of a wide range of vital signs, such as heart rate, ECG, temperature, respiration rate, and blood oxygen levels. Technology such as this can provide us with a potential warning of an emerging situation, such as a rise in people with the coronavirus.
The Future Is In Remote
What weeks in self-isolation have proved so far is that many meetings held over the years could have been simple emails.
Additionally, many meetings could have been held online and many business trips could have been avoided.
And although some companies have already known for a while the benefits of working remotely, the world is only now joining the club.
In the post-coronavirus world, the in-person events probably won’t be replaced entirely with remote events, but there will be a rise in hybrid events where parts of the event take place in person, and others are delivered digitally.