Technology and the pandemic

The coronavirus pandemic and ensuing lockdowns across the world have not only highlighted but also increased our dependency on technology. This was underlined recently by Satya Nadella, CEO of Microsoft, who declared that Microsoft has seen two years' worth of digital transformation in just two months during this period.

This acceleration and dependency can likewise be seen in the retail and payments spheres. In the UK, as the pandemic took hold in March and the country went into lockdown, many of the country’s e- commerce businesses suddenly found themselves facing a previously unprecedented level of demand.

According to e-commerce provider Edge by Ascential, coronavirus is expected to have increased the UK’s ecommerce sector by £5.3 billion by the end of the year. Online sales in 2020 are now expected to grow 19 % year-on-year, up from pre-pandemic estimates of 11%, rising from a total of £66.3 billion in 2019 to £78.9 billion this year. Amazon is likely to be one of the winners during this period.

Likewise Deloitte has found that ecommerce growth in the US as at 1st May was up 68%, accounting for over 40% of total retail sales.

A direct impact of the pandemic is that it is causing retailers to accelerate their digital transformation efforts. It is estimated that two-thirds (60%) of UK retail companies are reviewing their business strategies, with almost half (42%) looking to invest in digital, according to research by Livearea, another e-commerce services provider.

The impact on retail will be long-lasting, with the key to survival being business agility. As no-one at this stage knows what the post-covid resultant consumer behaviour will be – how much of the switch to online shopping remains permanent or how much footfall will return to the high street -– businesses will need a strategy that can adapt instantly. Effectively this means adopting a digital approach, developing the technology and culture to put online first.

One shift that is likely to be permanent is the increased use of contactless, both from a hygiene perspective and ease-of-use habit.

It could also be said that the current situation offers an opportunity to those retailers who are able to grasp and exploit it. In addition to contactless, there are a number of technology-enabled enhancements which have been introduced or strengthened by Retailers in response to new consumer behaviour. Virtual queuing, footfall analytics to identify number of checkouts required, self-checkout and chatbots helping customers identify the least busy time to shop are some of the initiatives which are being explored by retailers.

The retail businesses that are able to adopt a digital strategy and develop technology-based solutions are likely to be the ones that survive the pandemic.