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Knowing what sells after COVID-19

It was not the typical back-to-school this year for Anna, an 8th grade student at a private school. Topping her list of academic essentials was a laptop. Her school, like most, switched classes to online using Microsoft Teams to deliver content. Her parents had their dedicated work laptops and considering buying one just for Anna so that she could attend her classes. This is a conundrum that is being faced by many families globally during COVID-19 times.

Recently, DigiTimes Research reported that global shipments of laptops and tablets would surge in the second quarter after falling in Q1 due to COVID-19. Notebooks are expected to surge by 40% and tablets by 45% due to remote work and student demands. Gartner, a global IT research and consulting company, surveyed 317 CFO's and business finance leaders and results revealed 74% of respondents expect atleast 5% of their workforce who previously worked in company offices will become permanent work-from-home employees after the pandemic ends.

Industries other than the laptop/notebook that have witnessed a surge in sales globally during the COVID situation are online video gaming (Nintendo, Electronic Arts), online video streaming platforms (Netflix, Disney+, Hotstar),  household cleaning chemicals and materials (Clorox, Lizol), home exercise equipments,video conferencing (Zoom, Skype) and grocery marts. Zoom’s share price rose 41 per cent since February 16, 2020, tripling its listed valuation which occurred a year ago. Certainly in the western part of the world, toilet paper could test the Giffen’s paradox!

The need of the hour

The COVID situation has made companies, from proprietorship's to large corporations, rethink their strategies across the supply chain, not only to tackle the current scenario but to make their organizations more robust to handle such situations in future. For instance, agriculture and livestock companies have no choice but to realign their operations to cater to retail as their traditional bulk consumers such as restaurants, hotels and schools as well as their logistics partners closed down. Despite the high demand from retail customers and shortages for essential food items, farms in the US and other countries are being forced to destroy tens of millions of kilos of fresh food that they can no longer sell. In several parts of the world, farmers reached out directly to retail consumers through social media and delivered to communities, to save their produce from going to waste when traders had to shut down their shops. Retail customers in North America have extended support to local small businesses by buying from them rather than from large consumer retail outlets.

In other instances, car companies around the world have assisted with ventilator production and many beauty companies have begun making hand sanitizers. 3D printing companies have printed respirator valves, medical masks, and other medical supplies. Some clothing manufacturers are producing surgical gowns and medical masks to support the healthcare industry. The entertainment industry is distributing unreleased movies through video streaming platforms.

Redesigning the distribution model for long term

Most market analysts agree that the redesign of supply chains and customer reach to handle the COVID situation would have a long term impact in the way organizations function. Essential goods and services suppliers have to build in a response system that is quick to achieve scalability to meet consumer demand. As an example, with schools being forced to switch to remote learning, there is a high likelihood that once the situation eases, they may continue using online platforms for assignments and/or homework. Farmers who have used Facebook could continue to use this alternative communication channel to meet consumer demand after COVID eases.

Companies and institutions, like end consumers, have to invest in IT infrastructure now more than even and although the initial costs may be high, the return on the investment will be justified by operation flexibility, avoidance of cost inefficiencies and enriched supplier-consumer experience.

In the case of Anna’s parents and many parents like them, they would have to internally justify the purpose of buying a laptop for her as being sooner rather than later in her journey of education!

REFERENCES

McKellop, M. 2020-05-04. Report: Global notebook and tablet shipments soar in Q2. The Burn-In Retrieved on 2020-06-26 from https://www.theburnin.com/technology/global-notebook-tablet-shipments-soar-q2-2020-5/

Kovar, J.F. 2020-04-13,Some May Work From Home Permanently After COVID-19: Gartner, CRN.com Retrieved on 2020-06-26 from https://www.crn.com/news/running-your-business/some-may-work-from-home-permanently-after-covid-19-gartner

Powell, J. 2020-04-14.Is the Zoom boom doomed?. Financial Times. Retrieved on 2018-06-18 https://ftalphaville.ft.com/2020/04/14/1586853042000/Is-the-Zoom-boom-doomed-/

Yaffe-Bellany, D. and Corkery, M. 2020-04-11. Dumped Milk, Smashed Eggs, Plowed Vegetables: Food Waste of the Pandemic. New York Times. Retrieved on 2020-06-18. https://www.nytimes.com/2020/04/11/business/coronavirus-destroying-food.html

Basinger, R. 2020-06-09, How Industries Around the World are Adapting to COVID-19. iGrad.com. Retrieved on 2020-06-26 from https://www.igrad.com/articles/how-industries-around-the-world-are-adapting-to-covid-19

 

 

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