The shock from coronavirus has more disrupted than jobs, supply chains and financial markets. The consumer too has radically changed. For several companies now the number one challenge is to figure out where their B2C and B2B clients have relocated to and re-engaged with them.
COVID-19 is a beast separate from previous global disasters and recessions, such as the 2008 Great Depression and the Mideast oil crisis, the triggers of which were financially induced. Health and safety issues are the underlying cause of the pandemic, and thus consumer focused. The immobility of consumers and their willingness to be secure in the current world has culminated in uncertainty in sales and profitability across categories of idiosyncratic goods, culminating in a net economic downturn of a nature that has not been experienced by anyone alive today.
Government-imposed quarantines, self-isolation, and shop and office closures have prompted further customer shifts, and thus firm-based behaviours. The outcome of the wellbeing and concerns of consumers has resulted not in a typical recession but rather a “deaccession,” where supply and demand remain, but dramatically shut down consumer access to goods and services.
All in all, this combination of conditions and tighter budget restrictions make consumers less able to spend and less likely to spend in contrast with previous recessions. Where are you going to find those? When do you keep them engaged?
How do businesses adjust?
It is evident in the COVID-deaccession is that this change in consumer behavior is moving businesses into a new “directional reality.” By adopting a more customer-centric approach, corporations need to respond to changing customer desires. They need to go to their customers, rather than expect their customers to come to them.
Past research shows that companies which sustain or accelerate customer-centric philosophies consistently outperform non-customer-centric companies. We potentially gain market share from rivals who are cutting back on customer-centered spending.
During this COVID-deaccession, it becomes much more important for businesses to become more customer-centric by studying and recognizing the new challenges of their customers caused by uncertainty, loneliness, physical distance, and financial constraints, and trying to organize their products in order to satisfy these new unmet needs.
The pace or rate of adaptation expected by businesses to respond to a new directional environment will depend on customer demand. Industries with declining consumer demand — offline entertainment, lodging, real estate, industrial goods, and other industries suppliers — need to rapidly adapt to give them a better chance of survival.
In comparison, industries with growing consumer demand — grocery stores, online entertainment, teleconference providers, and their suppliers — need to adapt to this spatial reality at a slower, but certainly required, rate to help sustain growth over the longer term.
If businesses undergo declines or demand rises, all companies and organizations need to take a step back or forward and question themselves: What will be my minimally viable plan to get through those extraordinary times?
What strategic truth will your business continue to pursue?
We suggest an alternative to Ansoff’s (1965) growth strategy matrix to adjust to a modern customer-centered, directional reality (see table below). The proposed 2 x 2 matrix is defined by whether the company is competing with existing goods and services versus new or updated and whether it is operating in current or new markets.
O my friend — but it is too much for my strength — I sink under the weight of the splendor of these visions! A wonderful serenity has taken possession of my entire soul, like these sweet mornings of spring which I enjoy with my whole heart. I am alone, and feel the charm of existence in this spot, which was created for the bliss of souls like mine. I am so happy, my dear friend, so absorbed in the exquisite sense of mere tranquil existence, that I neglect my talents.
I should be incapable of drawing a single stroke at the present moment; and yet I feel that I never was a greater artist than now. When, while the lovely valley teems with vapor around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary, I throw myself down among the tall grass by the trickling stream; and, as I lie close to the earth, a thousand unknown plants are noticed by me: when I hear the buzz of the little world among the stalks, and grow familiar with the countless indescribable forms of the insects and flies.
then I feel the presence of the Almighty, who formed us in his own image, and the breath of that universal love which bears and sustains us, as it floats around us in an eternity of bliss; and then, my friend, when darkness overspreads my eyes, and heaven and earth seem to dwell in my soul and absorb its power, like the form of a beloved mistress, then I often think with longing, Oh, would I could describe these conceptions, could impress upon paper all that is living so full and warm within me.