The current pandemic crisis, undeniably a black swan event, has come with a set of new business challenges for organizations. As consumers are advised to avoid crowds and businesses increasingly rely on online channels for revenues, existing business models are collapsing. With more people being asked to work from home and shop remotely, organizations are struggling to engage employees and customers. The biggest impact has been on supply chains, with 94% of Fortune 1000 companies witnessing supply chain disruptions in the last two months. Making real-time data available to the organizations will be key to making informed, fact-based decisions to increase profitability.
Artificial intelligence for automation, the do-it-yourself revolution, democratization of analytics, and cloud modernization are more important now than ever before. AI-based crowd sensing and social distance monitoring solutions are reducing the risk of exposure. Contact tracing analytics solutions are helping manage COVID outbreaks by isolating pre-symptomatic cases. Blockchain solutions are helping supply chain management with increased traceability, transparency, and security. Online payment platform Alipay has created a blockchain-based solution that is enabling charitable organizations collaborate transparently by tracking donations of relief supplies and allocating them more efficiently. Carnegie Mellon University is working on a data science model to better understand Pennsylvania’s public health and economic status. This dashboard with advanced visualization capabilities will enable use of data for societal good and help inform state decision-makers during the pandemic.
Nothing is permanent and this pandemic will eventually go away. As organizations prove their resilience and find ways to respond to this pandemic, they will also prepare for the renaissance, look to scale up again, and adopt new business models, possibly AI-first, digital focused, or even completely hands-free.
Due to challenges posed by this pandemic, several innovative business models have already emerged.
Source: Capgemini Research Institute research note titled “The Consumer and COVID-19”
According to recent research note by the Capgemini Research Institute titled “The Consumer and COVID-19”, there are several examples of business model innovation in the CPRD sector.
Shared-labor models – In this model, “idle” employees from other sectors are temporarily hired by retailers to meet the surge in demand for services such as online deliveries. Germany’s discount supermarket chain Aldi has leased staff from McDonalds in the current crisis. Alibaba introduced a “resource leasing model” designed to share manpower and is developing a digital platform to manage shared manpower and integrate the resource leasing model into their ongoing operations. Such platforms can be used for flexible, COVID-related personnel matching purposes, particularly, in cases where one sector is looking at a surge in demand, where in other sectors people are redundant.
Bundle-based sales – Selling fixed bundles of the most commonly purchased products not only helps to manage logistics, but also ensures easy billing. In the UK, Morrisons has introduced a food box initiative, where shoppers pay one price for a box full of essentials.
Delivery partnerships – In France, Carrefour and Uber Eats partnered to provide home deliveries. Users were able to select a Carrefour convenience store on the Uber Eats app or website to order the products of their choice, including everyday grocery shopping as well as hygiene and cleaning products, and get deliveries at home within 30 minutes on average by a delivery person using the Uber Eats application. In the US, ride-sharing firm Lyft partnered with Amazon for package and grocery deliveries. India-based consumer product firm ITC partnered with pizza-delivery Domino’s.
Additionally, retailers have scaled adoption of digital and contactless payment services and are focusing on innovative and personalized customer engagement through virtual apps. For example, Nike has developed a training app to engage its customers. According to the recent research note by the Capgemini Research Institute titled “COVID-19 and the financial services consumer”, in the financial services sector, this pandemic is driving a surge in digital payments and digital channel adoption, such as chatbots, has accelerated. The tourism industry in China is finding new ways to engage customers through touchless payments, self-check-in, check-out with facial recognition, robot delivery of goods from outside the hotel and live streaming for sites has attracted thousands of viewers. Off-course, data, analytics and AI are playing a key role in delivering these business model innovations.
The current situation is forcing C-suite executives to think creatively and ask key questions based on their innovation maturity and current data, AI & analytics landscape:
- Can you create a digital picture to solve my business challenge?
- How can I accelerate my innovation agenda with data, AI, analytics?
- Can you prioritize innovative uses cases to address my business challenge?
- Is there a best practice framework for continuous innovation?
- How can I redesign my business model with AI and analytics?
Clearly, companies need to pivot to an even more innovative, creative mindset, particularly around the use of data, analytics, and AI. Innovative applications of technology, around use of AI for crowd sensing and social distancing, contact-less user experience, digital and online channels for growth, frictionless fulfillment of supply chains, workforce analytics, video analytics, and image recognition – all powered by data – are emerging. Innovation and creativity under constraints posed by this pandemic will differentiate the winners, going forward.
For more information, please contact the author, Monish Suri, Carnegie Mellon & McKinsey alum, driving partner and innovation led growth for Global Insights & Data @ Capgemini.