Trying to predict the future is a very tricky business — some have compared it to trying to drive down a country road at night, with no lights, while looking out of the back window. It comes as no surprise then that past predictions about the dominance of a post-pandemic digital world are proving to be on very shaky ground.
The explosion of e-commerce, online working and digital entertainment during the pandemic led many to predict a permanent shift in the digital economy worldwide. In 2021, a McKinsey survey said that, “the future will belong to companies that put technology at the centre of their outlook, capabilities and leadership mandate”. But today, we are seeing tech companies being forced to cut back, as consumers desert the digital-first world and return to the ways things were pre-pandemic.
It’s true that these post-pandemic times are not proving easy for anyone. We’re facing a global recession, soaring inflation and the worst cost of living crisis in modern times. Some business sectors are facing the worst ever talent crisis alongside the fact that our predictions about the digital industry are not as expected, especially for those who jumped too far and too fast, spurred on by concerns or opportunities during the pandemic itself.
Big tech layoffs
Today’s world is one of uncertainty, with some of the biggest pandemic tech success stories being forced to lay people off. Shopify announced it would be laying off 105 of its workforce. Netflix cuts are affecting even its editorial staff and lockdown darling Peloton has laid off 2,800 workers to date. Even Facebook has announced it will be slowing down hiring and weeding out under-performers. And while we are still reading reports on how the world is going ‘radically digital’ with city centres in decline, gyms shutting down and everyone still working from home, the reality is proving very different.
The lesson we are guilty of forgetting is that human behaviour is essentially social and people are now once again keen to spend money out of the home on dining, entertainment and travel. Yes, some home-bound consumers who tried online shopping for the first time during the pandemic became converts, but many are now returning to the high street.
Finding the right balance
One of the main post-Covid world challenges for business is how to plan your digital roadmap and investment in the face of such uncertainty. As consumers withdraw from an enforced peak of digital adoption, e-commerce rates are dropping and real life experiences are on the rise. The question is how to rebalance an e-commerce world that is undoubtedly here to stay with this shift in consumer behaviour. As an industry we have convinced ourselves that once an easier, simpler digital route is created, it will be automatically adopted by consumers over the long term. The idea of going back in the opposite direction does not come naturally.
The problem for some businesses is that the pressure to ensure their digital transformation was a success resulted in them cancelling key parts of their business — the parts that some consumers are slowly returning to. They jumped too far, too quickly and failed to consider the context and consequences of their decisions over the long term. Have no doubt that the pandemic has left its mark on both work and business. Work has become more flexible, but that doesn’t mean that city locations are all empty either.
Digital transformation is not an either/or solution. The really successful businesses will be the ones to find the right balance. We need to think more broadly about how we understand the motivations of our customers and employees. Post-pandemic, we are living in a brave and unpredictable new world where spotting future trends for staying ahead in the business world needs to be done as cautiously and as carefully as driving down a dark country road without any lights.