How to Stay in Business During COVID

How to Stay in Business During COVID

The medical toll from the pandemic caused by the coronavirus (SARS-CoV-2) continues to rise. As of September 25, 2020, the U.S had recorded 6,958,632 cases, according to data supplied by the Centers for Disease Control and Prevention (CDC), while COVID-19, the disease caused by the virus, had claimed 202,329 lives. For September, the nationwide death rate is around 850 per day. In addition to its public health impact, the pandemic has also crippled economic activity. In Q2 2020, gross domestic product (GDP) fell by 31.7 percent, after a modest decline of 5 percent in the first quarter. The slowdown has hit small businesses hard and although most appear to be weathering the storm, aided by support schemes such as the Payroll Protection Program (PPP) as we reported a month ago, about 5 percent of small business owners said they might have to close shop in the next six months unless things dramatically improve.

The onset of the pandemic has accelerated a trend that was already underway: digitization. Consumers and businesses alike have turned increasingly to digital alternatives such as video conferencing, remote work, and online shopping, to comply with social distancing and other safety guidelines. The adoption of these technologies is taking place on three fronts: internally, as businesses reorganize their operations, for purchasing and supply chain management, and in sales and customer engagement

Remote Working
With the onset of the pandemic, remote working or telecommuting has come into its own. Working from home was already undergoing rapid growth, although one high-profile detractor—Reed Hastings, founder, and co-CEO of Netflix—says home-working and “not being able to get together in person, particularly internationally, is a pure negative.” Jack Dorsey, head of Twitter, doesn’t agree. He says the company’s staff can work from home “forever.” Dorsey’s approach is in line with recent trends. From 2005 to 2018, the number of people working from home increased at a compound annual growth rate (CAGR) of around 46 percent. Thus, even before the pandemic struck, there were around 4.3 million remote workers in the USA, about 3.2 percent of the entire workforce. That modest proportion suggests that even in a world that had escaped the pandemic, telecommuting adoption would continue to climb.

Technological advances aside, the reasons “why” have been revealed by several studies that found remote workers are happier, more productive workers. Some 86 percent of respondents in a recent survey, for example, said that working remotely reduces stress. And these happier workers stick around. Companies that allow remote working have lower employee turnover—by about 25 percent—than those that don’t. Now, as an aspect of social distancing, more people are working from home. But, as so often happens, out of evil cometh good.

The ongoing COVID calamity has triggered a period of social experimentation that, in the end, may lead to more satisfying work experience. People, in general, hate the bother and expense of commuting, which obliterates around four hours a week for the average worker. That’s four hours that could be put to more productive use. As a consequence, the proportion of the workforce working from home has risen from around 3 percent to around 62 percent, according to a survey conducted recently by Gallup. Naturally, this upsurge in telecommuting would not be possible without remote-working technologies, such as Asana, G Suite, Slack, 15Five, and Zoom. These technologies came of age just in time to mitigate the depressing economic impact occasioned by widespread lockdowns. Despite its success, no one is quite sure if remote working will prove to be a superior model in the long run or if it will lead to a loss of creativity and motivation, as well as other ills.

Robotic Process Automation (RPA)
Automating internal processes is one way that businesses and organizations are reducing personal interactions that spread the coronavirus. A relatively new field, robotic process automation (RPA), uses algorithms, or “robots” to behave just as a human interacting with a computer application would. These robots support human workers by performing a variety of repetitive, mundane tasks. By reducing the level of human involvement required to perform “paperwork,” they increase employee productivity, cut costs, and leave workers with more time for creative and complex tasks.

RPA has proved especially useful to healthcare providers. The Cleveland Clinic’s use of robots to handle many administrative tasks related to coronavirus case management has reduced the per patient time from 3 minutes to 16 seconds. At the Mater Misericordiae University Hospital, a major teaching hospital in Dublin, RPA takes care of data entry in minutes, a task that normally took a 3-hour bite out of a nurse’s schedule. This allows nurses more time to spend with patients. A major benefit of RPA is that it can be integrated with existing applications in use, which avoids expenditure on costly upgrades or replacement of entire legacy systems.

Supply Chain
Supply chain managers are also turning to digital technologies to speed up deliveries and improve the efficiency of logistic systems. Retail giant, Levi Strauss, has been using AI and predictive analytics to make decisions about moving product to its 2,800 stores. The system proved its worth after the onset of the pandemic. The company says it would have taken “weeks or months” to reorganize well enough to cope with the surge of online orders but it was able to accomplish the shift “in a matter of days.”

The same deluge of online orders flooded Majid Al Futtaim, the Dubai-based conglomerate that operates the Carrefour grocery chain in the Middle East, Africa, and Asia. The company operates 315 brick-and-mortar stores in 16 countries but since 2015 has been bolstering its online presence and capabilities. As a result, the infrastructure to deal with the 400 percent increase in online business as the pandemic hit was already in place.

Ecommerce, already a significant but still minor part of the retail landscape, has exploded during the pandemic. In August, the Census Bureau of the Department of Commerce reported that U.S. retail eCommerce sales in Q2 2020 were up 31.8 percent from the first quarter, reaching $211.5 billion. This second-quarter rise increased eCommerce sales to 16.1 percent of total retail sales, up from 11.8 percent in the first quarter of 2020, and represented growth of 44.5 percent year-over-year. In the U.S., the Amazon marketplace dominates, capturing around 40 percent of the transaction value. Its competitors lag far behind. Second-placed Walmart has a little over 5 percent, while eBay, less than a percentage point behind, is in third place.

The growth in online sales has cannibalized transaction volume at physical outlets. Still, most retail sales are brick-and-mortar transactions, a reality that has led to the genesis of an entirely new business model: online-to-offline (O2O) commerce. O2O capitalizes on the propensity of modern shoppers to research products online before purchasing, a hybrid solution that woos customers online with the hope of enticing them to visit a physical location. O2O was a development that seemed inevitable. In a world where smartphones are ubiquitous and there is widespread familiarity with digital applications and platforms, virtualizing the “window shopping” experience was a natural progression.

Another upshot of digitization in the retail world is the use of augmented reality (AR), employing computer-generated images to provide a richer, more informative visual experience. AR is almost like being there. The technology allows a shopper, for instance, to turn a handbag around and view it from all sides, much as she would do in a physical setting. AR differs from virtual reality (VR), where what the viewer sees is completely generated by a computer. Conversely, AR shows a modified actuality by overlaying computer-generated images onto the headquarters. Users can bring up and view technical bulletins and schematic drawings while they work, or open or send documents, simply by using voice commands. At BMW, at least, the age of the cyborg has already arrived.