Quite like Conrad Hiltonâ€™s success formula for hotels, business models across industries are pivoted around location, location and location. The locations of production, transaction and consumption, respectively, which are undergoing seminal transformation post the global health crisis. For businesses to survive and thrive, customer centricity will not be enough and what we now need is the brand new paradigm of Covid centricity.
But first, letâ€™s explore the location troika and how that is disrupting time-tested business models. The location of consumption is hurting the restaurant business as people are ordering in while the travel trade is now depending on the drive and not the fly segment. Schools and offices have both shifted to home and the role of abundant real estate in sustaining institutions is reducing sharply. Even hospital consultations are now online and the MICE segment is now at the mercy of the Zoom conference, which is an avoidable necessity. Brooks Brothers filed for bankruptcy recently, which confirms the fact that meetings and weddings are out of vogue and many more will sadly follow suit. We all know how the multiplexes are impacted with OTT platforms triumphant and live sport from a spectator viewpoint is affected deeply.
The location of transactions explains the rise of the kirana format and e-commerce sector, while threatening the potency of supermarkets and hypermarkets. An innovative outcome being the sale of commodities by Dominoâ€™s Pizza or the tie-ups between Big Basket and the radio taxi operator, further capitalising on the necessity to service home delivery. In fact, everybody predicts a significant shift to online commerce for unusual suspects as well, including high-end luxury and fresh produce. Traditional values of touch and feel, which defined our buying behaviour, will change and the role of 3D modelling will certainly be enhanced as we will want authentic demonstrations. Retail will be drastically revamped as will the concept of the High Street, affecting many a bustling showroom business.
The location of production will affect those products which are heavily dependent on imports or sourcing from areas which are now experiencing freshly minted barriers. Which can well be the global resistance to Chinese factories as an extended backlash of the corona origins and militaristic ambitions. Whatever be the category. If production facilities are centralised then the restrictions on cargo movement will affect distribution and thus brands will lose loyal customers. We have already witnessed the insensitivity of customers to any shortages during this crisis and the next available solution was lapped up, be it milk pouches, noodles or cold cream. This may well signal a comeback to origins as we consume a lot more local stuff, whether as identifiable outcomes or input ingredients.
So, how exactly can businesses empower themselves with Covid centricity strategies? First and foremost, to do a value proposition audit and separate the heroes from the side actors. A fine dining restaurant may discover that customers are in love with their biryani and not their exotic interiors and a complete transformation to a cloud kitchen model may be the solution. While the brick and mortar fashion boutique will surprisingly discover that e-commerce habits have developed adequately to go beyond mass solutions. Conventional educational formats will refocus on pedagogy and not the size of the campus, thus making an online plus model the new normal. Tourist destinations need to focus on packaging their delights and whether the patron is westerner or easterner will soon be redundant. Do not be astonished if hospitals evolve to micro specialty units, miniature versions spread equitably to reduce travel and infections, yet blessed with top notch facilities.
Once the value proposition is carefully unearthed, we will need to ensure that it is compatible to the location troika, which defines the business models. The simple learning being that we must not let existing success factors be seen as indispensable strategic tools when they were originally just convenience or default conduits. A physical visit to an astrologer was an exceptional ritual but in modern times, the e-consultation does compensate more than sufficiently. Exactly how the office as a location is being made redundant by tech companies who have thrived on the outsourcing model in a differing yet connected context. Technology will sharply aid contactless engagement as our skills of judgement become mechanised intelligently, aided by 3D video formats.
It will also be necessary to use the clichÃ© â€˜disruptionâ€™ in a positive way as we break past protocols. Work from Holiday is a strong possibility as parents can be glued to machines while children enjoy the pool. Co-working spaces can now tie up with corporates for solo work stations, allowing employees to work away from office but not exactly from home. Zoom weddings and celebrations can break the 50-guest ceiling as caterers can be commissioned to deliver feasts to multiple locations via Dunnzo and everybody has a party. Big screen cinema can move forward to serialised content like Netflix in order to bring in the values of continuity and not Big Bang. In an earlier piece, I had already suggested that the parent can become an official co-educator, partnering the school teacher in the online formats.
Chances are that many business models will rapidly become obsolete and we will be hurriedly seeking sustainable solutions. Which is exactly why I am suggesting that Covid centricity must pair up with customer centricity to build the success stories of today. Where the locations of production, consumption and transaction unify to add value to both lives and balance sheets.
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