Author - Yannick Oswald
It all started with elbow bumps and masks. Since March, many more of our habits have changed. Earlier this year, we predicted (and it looks like we did a pretty decent job back then) the winners of this downturn and the industries that will be most hit by the current pandemic. Today we have a look at what might be next.
As we have now entered the second wave in Europe, it has become clear that some demand shifts that will outlive this pandemic are formed only now. We essentially realize that we will face similar challenges at a higher frequency in the future. We want to get back to a normal life and do everything to stop the germ spreading. Many are, for example, purposefully avoiding bank cards. Along the way, we discover that paying with your watch is more comfortable. No wonder that mobile payments are overtaking cards (and cash in some cases) entirely. I am optimistic that tech will help us in the future to confront the current challenges in a more efficient and humanly way. I am not talking about remote work or the accelerated adoption of online commerce. No, I am thinking of new demand shifts. The rapid adoption of digital health is a great example. The opportunity we have today is to detect these shifts before they become obvious to all. And build the right tech to facilitate them. A framework to figure out what's going on Last week, I came across this framework. I like it because it is simple and clear. It categorizes demand shifts using a simple 2×2 matrix, based on whether they are likely to be short- or long-term and whether they were existing trends or have emerged since March. One question is, will the shift away from offices to full remote work be temporary, or will it be a structural change with permanent knock-on effects in other areas, such as real estate?
I place online shopping, for example, in the catalyst quadrant. The pandemic has accelerated an existing trend rather than created a new one. People were already shifting to e-shopping before the lockdown. But the shift is structural rather than temporary, because the scale and duration of the enforced switch, coupled with the positive performance of the channel, suggests that many customers will see no need to switch back. Many of the immediately observed shifts in response to Covid-19 were driven by fear of infection or compliance with official directives, and therefore are most likely temporary. But others (such as the adoption of new digital health offerings) were accompanied by greater convenience and better economics, so they are likely to stick. On the other hand, many early fans of working from home realized that they want to get out of their house and see their colleagues regularly... Full remote work is very likely to be a temporary phenomenon. The contact-free economy Most tech successes take an existing consumer demand and improve the current service or product offering by launching a better digital offering. Think Skype, Uber, or Salesforce, for example. Betting on a future shift in consumer demand doesn't end well most of the time. The reason is simple. A shift in consumer demand takes time, but you can only build a mass-market product once this demand has scaled to tens of millions of people. This time could be different. Consumer demand is being reimagined in a couple of months, meaning that innovation (see fourth quadrant above) is accelerated dramatically. While many changes are already underway, a lot of it is still unknown at this point. It is right now that we can spot new shifts that could be indeed structural and beneficial to all of us. The healthcare sector is likely to see the most incredible digital acceleration in the next decade. Healthcare might have the worst consumer experience of them all, and Covid made this obvious to everyone. Health checks just can and will be so much better. Consumer demand across age categories has now shifted online in only a couple of weeks, and with it, new digital products have taken over to help both sides of the table, doctors and patients. Silvertech is another sector that is seeing a structural and long-term shift is. The one age demographic that is being hit the hardest by the current crisis are those aged over 55. At the same time, they have access to the smallest range of digital product and service offerings. How can they stay safely in touch with family and friends? Are our fancy food delivery and communication apps really designed for them? While Covid has been a catalyst for many online services, not everything will go online. There are many reasons why we like to go to places, shop, drink and eat with others. We will have to do so differently and more efficiently than we used to. We all learned some new tricks during the pandemic. But many of the current solutions, such as QR codes on tables at restaurants, are only temporary. Human ingenuity knows no limit, and we will come up with better ideas.
The customer journey of many products and services, from in-person retail to offices, will be reimagined, setting a new bar for self-sufficiency excellence. I came across this cool WSJ video illustrating a bunch of ideas. While I don't buy some of them, I think they are directionally correct. How will our workday look like and how will we manage it, how will we book and buy at restaurants and grocery shops, etc.? We can and will do better than dance boxes in clubs, or being stuck at home in front of a screen all day long.
Audio entertainment to balance the daily screen overload, touchless screens at shops and offices, dynamic work shifts, App Clips instead of QR codes, etc. are just some of the ideas that come to my mind. As Dan Adika, the founder of our kick-ass portfolio company Walkme, put it in this Forbes article: 'I think it’s very realistic that soon we will transition to an almost completely contact-less economy. Business models will have to support a fully automated digital customer journey around their core product offerings. These investments in self-sufficiency don’t end on the customer side. But the internal workforce will also be digitally accelerated.' I can't wait to discover all the great insights that entrepreneurs will unfold in the coming weeks and months. If you are onto something, please feel free to reach out. In the meanwhile, let's keep wearing masks and spot the next demand shifts. Life is awesome, Yannick
About the Author
I am obsessed with helping entrepreneurs build their insights on upcoming trends and markets into epic products - products that create the 'wow' effect and have an immediate and material impact on consumers’ lives. This is the foundation I focus on to implement scalable and sustainable business models