COVID-19 as a driver of digitization

For many retailers, the digital era is dawning thanks to the coronavirus pandemic. Those who paid only minimal attention to digitization in the past are now facing an enormous challenge.

How the coronavirus pandemic turned the world on its head

It’s true that the pandemic caught us all off guard. When the media reported on the novel coronavirus in China for the first time at the end of 2019, many in Switzerland merely shrugged their shoulders. Then, suddenly, things started to happen very quickly: first, the virus hit Italy, and just a few days later, the danger that had seemed abstract was also here in Switzerland. The lockdown followed. Everything that was not systemically important was shut down overnight. Those who had no digital strategy were suddenly left stranded. But those who had already forged ahead with the digital transformation in their own company, even before the pandemic, now had a competitive advantage.

From crisis to opportunity

For many companies, the coronavirus crisis was a painful revelation of their own weak spots. But like every crisis, it also holds opportunities. It even has the potential to permanently shake up the retail landscape. The best example for this is JD Multimedia, whose founder, Richard Liu, faced the same challenge during the SARS pandemic in 2003. He took the opportunity and entered online retail. The result was jd.com, now the second-biggest Chinese Internet retailer after Alibaba.

New business ideas are needed

Many local retailers will probably want to enter the online market in the future, and new local delivery concepts will be created as a result. The new competition will put established players under pressure, because the new entrants are enormously flexible and can adjust their business models virtually overnight. For example, a Zurich startup focusing on delivering fresh produce mainly to office workers and companies quickly switched to serving private households during the lockdown.

It is therefore absolutely the right time to develop new business ideas. Many of these ideas will be in the digital space. You don’t even have to think particularly far to see the impact: during the pandemic, it felt like half of Switzerland was being run from home workspaces. Communication inevitably took place chiefly via video conferences. In the process, opposition to video conferences fell away. They are now as much a part of the office routine as the morning coffee. Why shouldn’t we harness these new habits in online retail as well?

Real-time data is driving digital business models

Taking advantage of new habits, integrating new ideas, developing new business models – virtually all digital business models will have one thing in common: they need to be fed with information, while they simultaneously produce a huge quantity of data. The true potential of the data cannot be realized unless it is constantly evaluated, summarized and distributed. Only through real-time monitoring does it become clear where digital touchpoints are useful. For example, an online consultation needs to be evaluated in real time in order to be able to show customers relevant information. This also reduces the advisor’s workload, leaving him or her free to concentrate fully on the conversation. 

However your digital business models develop, it’s worthwhile investing in solid data architecture from the outset. This will give you flexibility and the certainty of being able to adapt quickly to new circumstances. And you won’t run the risk of paying twice for rushed decisions.