One of the inevitable (and even necessary) results of the 2020 global pandemic has been a hunkering down of industry. Economic uncertainty is on everyone’s minds and businesses are focused on making it through the year in unprecedented times. But one of the primary opportunities to come from the challenges of 2020 so far has been an unexpected acceleration of innovation.
“If there’s anything we’ve learned over the last three months, it’s that anything is possible,” said Stella Vatcheva, global head of innovation at Euromonitor International, while hosting a recent webinar entitled “Innovating During Coronavirus: A Guide to Recovery and Business Growth.” Being flexible and adaptable are keys to success, she said.
Why innovate now?
Put simply, everything is changing, and innovation is a component of the adaptability needed to recover and grow in the current climate. It’s prudent to assume that change is now a constant, said Vatcheva during the webinar, and aim to capture opportunities as they arise. Current estimates predict that it will be at least two years before the world’s economy rights itself; according to the World Bank baseline forecasts show a 5.2% contraction in global Gross Domestic Product (GDP) in 2020 — the deepest global recession in decades. Advanced economies are looking at projections of shrinking 7%, and nearly every country is expected to face a recession.
Not exactly inspiring, I know.
But here’s the thing: Odds are good your business plan went up in smoke around March or April anyway, and you’ve been trying to rewrite at least part of your playbook ever since. In April 2020, Euromonitor conducted a “COVID-19 Voice of the Industry Survey,” and the results of that survey indicated that most businesses in most industries (whether “essential” industries still seeing some growth like pet care and human food; or industries deemed “non-essential” by consumers and taking serious hits, such as luxury goods, personal accessories and apparel/footwear) are taking a hard look at their medium- and long-term strategies in order to survive.
“There is a clear preoccupation across businesses with trying to develop business continuity plans in response to such severe disruption,” said Vatcheva. She presented three arguments for innovation:
- A highly volatile and challenging environment offers ongoing opportunity for new products and services.
- Profound shifts in both supply and demand call for effective partnerships across the broader ecosystem.
- Refocus of core competencies and business models is derived from temporary pivots but is crucial for recovery.
All that comes down to this: Everything is already changing. Why not actively take the reins and take advantage?
Acceleration of technology innovations
“It’s go digital or go dark,” said BDO USA (a member of BDO International), which delivers assurance, tax and financial advisory services to clients all over the world, in a May 2020 article, “COVID-19 Is Accelerating the Rise of the Digital Economy.” E-commerce was already well on its way to becoming a megatrend in all industries, including pet food, but the pandemic has brought it to the forefront. “Prior to the pandemic, a paradigm shift towards digitization and servitization of the economy was already underway,” said BDO USA. “Current events have accelerated the paradigm, as evidenced by the marked shift in spending towards digital businesses.”
According to Euromonitor, online-related trends including e-commerce, telecommuting and connected consumers (evidenced by the high adoption rate of the digital world by even those populations previously resistant to the idea) are being amplified. And unsurprisingly, Euromonitor’s Voice of the Industry Survey indicated that 34.38% of respondents are concerned about a shift in the sales channel mix to focus more on online commerce.
“The digital acceleration overnight has landed us five years ahead of where a lot of us thought and predicted we’d be,” said Vatcheva. What’s more, consumers who have adopted digital services are expected to maintain these habits in the future, even as companies are expected to stick to new ways of managing business digitally, making it essential for updated business plans in the pet space to take this into consideration.
Briefly: Key headlines for innovation leaders
According to Vatcheva, there are four key takeaways for innovative success in this ever-changing economic climate:
- Core competencies reimagined: Deliver safe ambience, remote development and digital empathy.
- Partnership and co-creation: Leverage a broader ecosystem rather than siloing R&D.
- Supply chain shortened: Ensure your supply chain is short and agile.
- Survive today and thrive tomorrow: Accelerate adoption of new habits.