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Pandemic Prospects: Pivoting Your Way To Success

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02 December 2020 by Team ITG

“The end of the world as we know it?”

They say there’s a song for every situation, and right now R.E.M.’s 1987 hit “It’s The End Of The World As We Know It” is particularly relevant given the seismic social and economic upheaval we’re seeing across the globe.

When news of a COVID-19 vaccine broke, the world sighed in relief, yearning to return to ‘normal’ life very soon. The global population would be saved from COVID restrictions – but is it that simple?

News of a vaccine is truly remarkable, yet in reality it marks just the beginning of our pandemic recovery, not the end. Roy Anderson, an epidemiologist and professor at Imperial College London, has stated that three quarters of the UK population would need to be vaccinated to achieve herd immunity. Before you can get to that point, of course, there is the matter of convincing the UK’s population to receive a speedily produced vaccine. And, once overcoming any public apprehension, there lies the logistical challenge; the bottlenecks in producing these doses, and the tasks in administering them. In all likelihood, it will be at least 2022 before life returns to some form of normality – whatever that may be.

In fact, the ‘normal’ that we often refer to no longer exists, such has been the impact of the pandemic. For businesses to prosper it is crucial they pivot their approach towards this ‘new normal’, and our new way of life in the future.

The “Next Normal”

Social distancing has fundamentally changed the way businesses can operate.

  • 51% of businesses are unable to perform at pre-COVID levels
  • 16% would have to operate at less than half capacity
  • 6% are completely unviable

Remote working has surged. Just 5.1% of UK employees worked mainly from home in 2019, but in April 2020, that figure rose dramatically to 46%.

Supply chains have been severely challenged by COVID-19 and with the Brexit go-live date looming (January 2021) this is only going to get more complicated. COVID-19 is transforming consumer habits – we have covered a “decade in days" in adoption of digital. Online delivery has achieved 10 years worth of growth in just eight weeks.


Know Your Consumer

Some of the changes as a result of COVID-19 will be temporary, such as a preference for digital entertainment and larger basket sizes. However, other trends are likely to outlast the pandemic, such as:

  • The surge in e-commerce
  • Greater focus on health and hygiene
  • Trading down and price sensitivity
  • Remote working

It is critical that businesses understand these changing behaviours if they are to prosper throughout the remainder of the pandemic and beyond.

“Change Brings Opportunity”

The momentous challenges brought about by COVID-19 are clear to see, but substantial opportunities can be still grasped by businesses that don’t panic.

Craig Beddis, the chief executive of Hadean, a hugely successful start-up in the fiercely competitive computer software space, highlights that point:

“People are very impulsive under pressure, and they can start making crazy decisions and pivots that are not going to help. Then you’ll start to confuse your investors, the market and your people”

10 Steps to Pivot Success

  1. Don’t panic

  2. Same mission, different approach: Sometimes, pivoting isn’t necessarily about changing your business’ focus

  3. Ask away: When a crisis hits, it’s time to talk to your customers, stakeholders and the wider ecosystem

  4. Plan different scenarios: Mapping out strategies and having an inquisitive eye can help clarify the best direction to take

  5. Be crystal clear with your team

  6. Alongside clarity, keep up the team spirit

  7. Pay extra attention to your existing customers

  8. Preserve, Adapt, Reconquer

  9. Be careful with your pitch decks

  10. Ace your pivot narrative

 

So, what are the hallmarks of a successful business pivot?


It must be a Lateral Extension of Your Business’ Existing Capabilities

Mercedes have used their manufacturing capabilities to develop and produce breathing aids that deliver oxygen to the lungs without the need for a ventilator. To help achieve this they partnered with clinicians from the University College London Hospital. This extension undoubtedly serves a direct need during the pandemic; however, it also offers a sustainable path to profitability, as the healthcare market is massively viable for Mercedes going forward.

At a time when people aren’t able to move around and social distancing is the order of the day, it made sense for Uber to pivot their model to transport other things rather than leave its drivers without any work. They did just this with Uber Direct, offering retailers a rapid, on-demand delivery service, as well as Uber Connect, which is aimed at individual consumers, letting them send personal packages.


Take Offline Online

Hospitality has been hit harder than most sectors during the pandemic, however this has not stopped Airbnb from capitalising on their ‘Experiences’ offering; activities designed and led by inspiring locals. These experiences go beyond typical tours or classes by immersing guests in a host's unique world. A ban on international travel and social distancing seemingly made this service, in its current form, impossible. Yet Airbnb pivoted to online experiences, where you can ‘meet the world from home’. This move to online offers another commercially viable root for the business during and after the pandemic.

Rocket, a top luxury caterer in London, specialise in events. Faced with the prospect of zero revenue they launched their ‘Rocket Masterclass’, offering consumers experiential dining in the home. This brand-new cook-along experience provides consumers with exclusive ingredients to be used whilst watching a live broadcast from one of Rocket’s executive chefs. This pivot has not only helped the business operate whilst normal operations are effectively shut, but also offers a dynamic new route to market that is not limited by location.

Shorten the Supply Chain

The temporary closure of many of the UK’s pubs and restaurants throughout the year resulted in food wholesaler Brakes providing a B2C service, in addition to their B2B offering. This ‘direct to consumer’ provision has driven growth in revenue; it is an essential step that will aid pandemic survival.

Make it a Takeaway

Food to go has been a common theme amongst those businesses that have been forced to shut their doors. Stay Golden, a trendy restaurant in Nashville, quickly pivoted their business to provide sponsored meal kits for those without food, and also offered their brunch and dinner items as takeaways to be eaten at home.

Utilise key assets, especially if they are empty – London-based gym Rebel offered their space to the NHS for extra beds.

Don’t lose your USP – John Lewis have ensured they haven’t lost what makes them stand out in the department store space, by adapting their ‘in-store advice’ service to online. Virtual personal styling, nursery advice and home design are all available via free online appointments.

Leverage your brand and diversify expertise – Brewdog adapted their distillery to produce Brewgel hand sanitiser. A great PR exercise and one that keeps the brand firmly in the mind of consumers.


Pivot Principles

A vaccine for COVID-19 may be on the horizon, but the ongoing challenges faced by the pandemic will undoubtedly remain for some time. COVID-19 has rapidly accelerated shorter supply chains, remote working, social distancing, consumer introspection and tech use. For businesses to pivot successfully, a movement towards this ‘new normal’ is imperative.

Despite economic challenges, change does bring about opportunity – especially for those cutting-edge businesses that carefully consider the needs of their customers, stakeholders and wider ecosystem. Not only should a pivot be a lateral extension of a business’ existing capabilities, it should also offer a sustainable path to profitability; one that enhances brand value in the mind of the consumer.

While the global COVID-19 pandemic and aftermath could be the most challenging of times for businesses slow to adapt to our changing landscape, it could be the most rewarding for those who get ahead of the game. For businesses who successfully pivot, taking a new direction could lead to a new era of success. For them, ‘it’s the end of the world as we know it – and I feel fine’.

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