The COVID-19 pandemic significantly accelerated the need to provide consumers with products and services that are relevant to them, customized for their specific needs and habits, and delivered in the way that best suits their lives. As we move beyond the pandemic, I believe these consumer expectations will likely increase. That will drive great competitive pressures and the need to transform core business models and capabilities to be local and customized (to serve consumers competitively) and also global and at scale (to achieve the right costs and capabilities for products and services).
An accelerated focus on local service
Increasingly, consumers are demanding more from businesses as digital capabilities provide service and product delivery that can be customized to individual wants and needs. The pandemic has accelerated this trend, training consumers to expect an even higher level of service than they received in the past.
Today’s consumers want choice, customization and frictionless purchasing. Many also want companies to know who they are, what they like, how they want to interact with companies, and how they want to purchase and consume products. Customers also may want contactless delivery, clean packaging and the opportunity to provide feedback. COVID experiences will set the baseline for performance going forward, and consumer-focused companies may never be able to go back to pre-COVID expectations.
A continuing need for a global supply to respond to disruption
But local customization alone is not enough. Multinational companies also will continue to build and efficiently leverage extensive supply chain capabilities and distribution centers to serve a global customer base. In direct-to-consumer situations, they require a reliable, secure way to handle the last-mile stretch to the customer’s home.
Managing COVID and other future disruptions will require new ways of thinking about how to fulfill global demand efficiently, while also addressing heightened consumer expectations, and anticipating the new disruptions and risks that have become apparent during this pandemic. Redesigning supply chains to account for these disruptions and to build operational resilience will likely drive new investments in local value chain relationships and new operations capabilities as a hedge against potential global risks. These investments should provide firms with multiple ways to respond when their supply chains are disrupted.
A distributed workforce and fit-for-purpose office locations
The pandemic has also affected team members and offices, showing us how remote work can be as effective as the office for many roles. That raises a key question: Do we really need to have all team members in the same building in order to do our work going forward?
Many firms are thinking about the best ways to customize their work environment to help increase employee engagement and to tap into a broad pool of team members for whom the home is a more productive work environment. Working from home has the potential to raise employee productivity while also giving companies access to more talent. Of course, this has significant implications for the function of the office, which will likely become more focused on worker needs, such as capabilities for collaborative design.
The new distributed workforce will also require technology that enables an ongoing focus on collaboration and productivity, the automation of manual work, provisioning of laptops and other devices for workers’ remote needs, home office power and WiFi needs, and business process redesign and enabling technologies that support employees who are working from home as well as those on-site.
Tech plays a role in building out post-COVID capabilities
Technology is one of the biggest levers that companies have to navigate and deliver against each of these local needs.
Getting local consumer engagement and services right will likely require a significant investment in digital and analytics capabilities. Digital will focus on overall engagement and transaction experiences, including e-commerce platforms, content management systems and financial systems — with a goal of moving from browsing to buying as quickly as possible. Data and analytics technologies will enable businesses to collect and analyze their data to identify trends and insights they can put into action by, for example, optimizing pricing or merchandise assortments.
New supply chain designs will be enabled by investments in technologies such as demand and capacity planning, Internet of Things (IoT), logistics and transport, warehouse management, robotics and advanced manufacturing execution systems (MES). Companies will also need technologies such as distributed order management to allow them to quickly respond to disruptions and reconfigure their supply chains to provide the best fulfillment routes.
Finally, cybersecurity is another top area of investment that will need more attention. Most businesses were already focused on improving their security posture before the pandemic, but since COVID-19 heightened cyber threats — not only to data, but also to reputations — audit committees and boards have paid even more attention to security issues. They’ve also been placing a greater focus on their cybersecurity investments and on determining which threats should be mitigated first. The shift to working from home is obliging many companies to further enhance their security approach in order to help their workforce be secure in a non-company setting.
The pandemic is creating new demands and requiring new investments to meet local needs and capabilities across the value chain. Businesses that step up their investments in these areas can be ahead of the competitive pack and will be much better prepared to handle the next major disruption.
Want more insights on the big issues facing business and society in the year ahead? Our global series reveals how six disruptive forces are shaping our world in the year ahead and also serve as a framework to identify opportunities in the next normal.