This article is part of a series of associated insights and research.
Over the last few weeks everything has changed
Now, perhaps more than ever before, we have the evidence that the future is not neatly laid out in front of us, like a predefined runway just waiting for our plans to land. Forget about jet packs. The only thing we can predict with certainty, is that the future is uncertain. Like it or not, ready or not, we need to adapt at speed.
“The only way to make sense out of change is to plunge into it, move with it, and join the dance.” – Alan Watts
Risk aversion becomes the greatest risk
If we can accept that uncertainty is the new normal, then we will need to embrace it: use uncertainty as the lens we apply, not the problem to be solved. We can learn from increasing velocity of customer behaviour in the early part of the COVID-19 crisis in March. From the sudden shelf clearing of bread machines (demand up 652%*) to fitness equipment (demand up by 307%*), new ‘winner categories’ emerged at speeds not seen before. What is clear is that customers are thinking and moving faster than the businesses they rely on for consumption. Can our organisations react at the same pace?
The need for organisational agility has never been more pressing but the window to reposition is narrow. Now that quarantine restrictions are gradually being lifted, those first back in market with new, relevant, product and service offerings for "the new normal", are establishing a sizeable ”first mover” gap between themselves and competitors.
The risk averse, now with limited capital and traditional market options, may well seek validation for hunkering down to wait this out. These businesses create an opportunity for their competition. Competitors who seize the moment, especially with relevant offerings surfaced and served up at speed to consumers via great digital platforms: they’ll create a killer competitive edge that may prove insurmountable.
“In the choice between changing one’s mind and proving there’s no need to do so, most people get busy on the proof” – John Kenneth, Economist
*March 2020 compared with March 2019 (Stackline retail intelligence report).
The customer as market signal
From bread makers to exercise equipment, home office monitors, face masks and hand sanitiser, it is the consumers that define what is valuable and what is not. But predicting these demands in an uncertain market will be difficult and traditional customer research will struggle to accurately predict where the market is heading in the mid to long term.
In a contracting economy, price cutting won’t defend market share as all vendors ease pricing in a mutually assured race to the bottom. So other non-price dependent factors, that customers perceive as highly beneficial, will emerge as substantial market differentiators.
Here’s our pick:
Trust. Consumers will increasingly favour suppliers and vendors who can demonstrate solid practices that ensure minimal risk to the customer in transacting goods and services.
Safety. Businesses that demonstrate a clear concern for their customers welfare through spread-prevention initiatives and interventions across customer touchpoints and journeys.
Convenience and access. Consumers constricted travel patterns are likely to drive the emergence of innovative delivery and fulfillment logistics options.
New ways of working. Expect to see more professional and one to one consulting services move to online
Market disruption always demands change
Business has decisions to make.
We can stick with the current status quo and wait for the economy to re-settle and then adapt to suit. Or we can get close to our customers, keep in step, and adapt our business rapidly. There have been rapid market changes before. The difference is that now we have the tool sets we need to come out of the gates at speed.
Our focus now needs to be on how best to adopt them.
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Greg Whitham is a Consulting Director in Datacom’s Advisory practice. Specialising in customer experience and digital communication where he has had 20+ years’ experience working across retail, fintech, energy, and construction sectors.