Any major event with substantial economic impact and unprecedented shifts in market expectations naturally accelerates change—but a “major event” may be an understatement when history looks back on the global COVID-19 pandemic that has gripped the U.S. and the world since early 2020. Not only is the pandemic causing serious health issues and dramatic loss of life, but its economic impact has been devastating for so many.
However, despite lockdowns, business closures, job losses, supply shortages and other events that directly impacted companies of every shape and size, there also came opportunities that are almost certain to remain a lasting part of the way things operate as we start to recover from the pandemic. Remote interaction (RI), artificial intelligence (AI), big data, a dramatic increase in e-commerce, a rise in entrepreneurial intensity, the re-analyzation of workplace culture—and even drones delivering to the front door—are just some of the things that are likely to be permanent in the new normal.
To get a greater picture of what to really expect, we asked the experts—members of the faculty from each of the nine undergraduate business majors at the Whitman School— to share their insights into the future of the post-pandemic business landscape.
Accounting: Consulting on New Complexities, Offering Diverse Talent
New opportunities stemming from the pandemic will surely bring unprecedented growth and competition to the accounting field, according to Professor of Accounting Practice Kofi Appiah Okyere, who is also the director of graduate accounting programs. Many companies have struggled with a loss of productivity as employees got the hang of working remotely. This is not unique to accounting firms, of course, but has given them the opportunity to more deeply understand the processes of working with clients and within teams. This, according to Appiah Okyere, should result in major advances in efficiency, competition and profitability in the accounting profession, fueled by tools like AI and other technologies. While CPAs have always been trusted partners in business strategy, the post-COVID-19 world will present more opportunities for firms to act in consultant roles for clients. They can advise on navigating new complexities surrounding human resources, process automation, supply chain management and operational digitization, according to Appiah Okyere.
Adding to this expansion in consulting services is a greater demand for diverse talent to fill these new roles in everything from IT to legal. To do so, accounting firms will likely look to flex workers to fulfill many client needs.
Business Analytics: A Key Decision Maker From Retail to Health Care
Business analytics has played a key role in easing the transition to supporting customers remotely in everything from retail buying habits and product distribution to health care and daily work habits. E-commerce certainly wasn’t a brand-new concept before the pandemic, but it has rapidly expanded over the past year as companies transitioned to online and consumers demanded access to the goods and services they needed. Although it took 25 years for e-commerce to reach 11.3% of retail sales, the U.S. Census Bureau reports that e-commerce sales increased from 11.3% to 16.1% of total retail sales in only the first six months of the pandemic.
According to Associate Professor of Management Information Systems Don Harter, director of the M.S. in business analytics program, the increase in the use of e-commerce is most likely permanent. Business analytics will continue to play an even greater role in making product recommendations to online buyers, adding upward pressure on sales, he says. Management of e-commerce inventory and distribution will continue to be dependent on analytics to minimize delivery time and costs.
“If a retailer needs to expand warehousing, for example, analytics identifies potential locations for new warehouses,” Harter explains. “Retailers also will continue to use analytics to select warehouses that have the right products, and the shipper that will deliver in the shortest time at the lowest cost.”
Retail certainly isn’t the only area in need of business analytics. Throughout the pandemic, analytics has transformed the approach to health care using demographics to determine groups at high risk for COVID-19, and various medical and educational institutions have developed diagnostic and technological advances that can diagnose and detect COVID-19. (For example, Brooklyn-based NeuTigers developed CovidDeep, a neural network-based wearable sensor that can detect COVID-19 infections.) The use of neural networks, which, in simplified terms, mimic the design of the human brain in order to recognize patterns and make decisions, is just one example of the important advances in technology that have transformed health care during the pandemic, according to Harter. Such medical breakthroughs will most certainly create a demand for professionals trained in analytics, as well as analytic specialists who can assist organizations to successfully transition into a post-COVID-19 world.
Entrepreneurship and Emerging Enterprises: Recognizing Opportunity and Doing Something About It
“While everyone agrees that we would all have been better off had the pandemic never arrived, history tells us that the great dislocation brought on by the COVID recession will deliver hardships to many, yet opportunities to others,” says Professor of Entrepreneurial Practice Ken Walsleben ’83 (MAX).
Multiple studies have shown that entrepreneurial intensity has typically soared during periods of economic turbulence, and, having lived through what is arguably one of the most turbulent times in global history, this will probably be no exception.
While many innovative business ideas have and will continue to evolve from the pandemic, there is a catch. “The question lies in who will not only recognize an opportunity but actually do something about it,” Walsleben says.
Companies that existed before the pandemic—like Zoom, Netflix, Instacart and Amazon—certainly caused a seismic shift in how consumers made purchases, as they leveraged the need to keep people and businesses moving forward during difficult times. But, is this a permanent change? That remains to be seen, according to Walsleben, but it is likely. The turbulence caused by the pandemic, as well as the efforts needed to recover from it, will no doubt spike the formation of new businesses in many sectors, including those yet to be imagined. Walsleben also anticipates that millions of Americans who have faced unemployment or underemployment during the pandemic will “finally choose to scratch the entrepreneurial itch they’ve harbored,” while others will opt for self-employment or some form of gig work. This, in turn, may advance the use of temporary or fractional workers in the white-collar service sector.
Entrepreneurial intensity is almost certain to rise, at least in the short term, but how long that will last and what will be seen as permanent change remains uncertain. “Only with the benefit of hindsight will we be able to know exactly how significant this predicted entrepreneurial boom will be,” Walsleben adds.
Advisory Board Insight:
Scott Klein Weighs in on Post-COVID Environment
Whitman Advisory Council member Scott Klein ’79, president and CEO of LanguageLine Solutions, sees the best of a post-COVID-19 environment as one “no longer undermined by a failure of imagination.”
Despite warnings, he says, the majority of private companies did not proactively create pandemic plans, even while COVID-19 was raging in China. As a result, many companies were “caught flat-footed” when they were forced to switch to a work-from-home model.
Klein’s company created such a plan back in 2014, and, as a result experienced zero downtime when it moved more than 14,000 employees to remote work in March 2020.
“I’ve been fond of calling this past year our finest hour, but, in reality, our finest hour may have occurred seven years ago when we had the wisdom to put a plan in place,” he explains. “A key part of a business’s valuation will be its preparation for the unexpected and its ability to adjust to the next normal.”
Klein also notes that clients have developed a greater level of comfort with virtual meetings, which he anticipates will reduce travel significantly.
“The days of account executives spending half their year on the road are gone,” he says. “This will make everyone more productive, saving time and money while exacting less of a physical toll on our people. The past year has forced us to become an even more flexible, results-oriented business with a much-decreased physical and environmental impact. We expect that this will be the complexion of successful modern business going forward.”
Finance: Big Data, Technology Become Necessities of the Business World
Online banking, electronic/mobile payment systems, robo-advisors, algorithmic trading, fintech and cybersecurity are just a few aspects of daily business that are here to stay, according to Professor of Finance Practice Tom Barkley, director of the M.S. in finance program. Some of these ways of doing business existed before the pandemic, but all of them have now become cemented into the realities of consumers’ daily lives and necessities in the business world.
This won’t be limited to consumer goods, like clothing or groceries. Banks, insurance companies, pension funds and investment managers will continue to rely more heavily on innovative financial instruments that became essential during the pandemic in order to meet the needs of customers. In the post-COVID-19 environment, the influence of big data and AI will be felt full force from governments and multinational corporations to Main Street, as technology helps almost every kind of business sector identify what clients and customers want and need.
Barkley notes several areas of change to be expected post-pandemic. Working remotely, while a necessity during the pandemic, is likely to continue, whether full time or in hybrid form. Companies have found that less travel and no commuting has increased employee productivity for the most part, which, in turn have positively impacted the bottom line.
Retail operations that survive the pandemic are expected to look different in the years ahead. There are likely to be fewer brick-and-mortar operations, which could result in shrinking company margins that could mean lower prices for consumers. Barkley uses banks as an example of brick-and-mortar operations that closed many branches during the pandemic and may encourage customers to do most of their transactions online in the future.
As big data and AI programs continue to offer manufacturers, wholesalers, retailers and other members of product supply chains ways to better identify the desires and needs of consumers, there will be a greater reliance on protecting all of this data. Government and businesses will need more robust firewalls to prevent unauthorized access to databases, confidential files and other strategic information. This should spur growth in new firms that provide various forms of cybersecurity services, as well as companies that offer cloud computing, database management services and biometric data analysis.
With so many people and services relying on the internet, social media and telecommunications, there will also be the need for greater bandwidth and improvements in the infrastructure that provides it. This will require government partnerships with the private sector to provide adequate services.
And, finally, “It’s not unthinkable that the near future might bring about a society where notes and coins disappear,” says Barkley, remarking that increased payments for goods and services have reduced the need for physical cash. “Cryptocurrencies might become the next major store of value, ready to use anywhere in the world.”
Advisory Board Insight
Kenneth Pontarelli Says There’s No Substitute for Personal Interaction
Kenneth Pontarelli ’92 (WHIT/A&S), a member of the Whitman Advisory Council, is a partner and managing director of Goldman Sachs Group Inc. He acknowledges that, despite the hardships of the pandemic, there have been some benefits, and he marvels at his team’s ability to raise investment vehicles with no face-to-face meetings with investors.
“This would have been unthinkable in the past,” he says. “This period [of working remotely] allowed us to reflect on what really needs to be done in person and eliminate unneeded waste.”
Pontarelli acknowledges, however, that there is no substitute for personal interaction, not only with clients but also with up-and-coming professionals. “The finance sector is one deeply steeped in apprenticeship. When young professionals are learning the industry, they need real-time access for training, as well as answers to their questions,” he explains. “This builds camaraderie and inculcates people into the culture of the firm. That is the glue and differentiation of an organization. On the client side, the first-hand connections are what build trust and a bond that creates long-term alignment.”
Pontarelli hopes that a post-COVID-19 business environment “harnesses the efficiency gains that we have garnered to double-down on time spent deepening relationships within our firms and client base.”
Management: Accelerated Adoption Patterns, RI Technologies Will Remain Vital and Change Organizational Culture
At the start of the pandemic, shutdowns happened almost overnight, and businesses of every kind had little choice but to find innovative ways to stay alive, keep people employed and service customers and clients. These ideas and innovations have, in many cases, now become the cornerstone of businesses that will survive the pandemic, even though some of them seemed no more than a pipedream before the world came to a screeching halt.
“In some cases, these things were going to happen eventually, but the timetable would have been much slower,” says Professor of Management Natarajan Balasubramanian. “The pandemic only accelerated changes that were already occurring, as newer entrants and technologies were slowly replacing older players, like clothing retailers and movie theaters.”
“The usual adoption patterns of new ways of doing things that typically include early adopters, early majority, late majority and laggards simply didn’t have time to develop during the pandemic. Instead, it was full speed ahead,” adds Assistant Professor of Management Cameron Miller.
A big piece of this has been industries that enabled RI (remote interaction). The pandemic forced almost everyone who wanted to stay in business to be an early adopter, as there were few alternatives. There was no time to watch things grow, see standards emerge or give businesses time to slowly transition from product innovation to process innovation, as they learned to manage requirements from various customer segments.
“As an example, a year-and-a-half ago, would most people have ever imagined that elementary school student would be learning remotely?” asks Miller. “But there was really no choice. Children needed to be educated, but they also needed to be kept safe.”
As the world begins to return to a new state of normal, it is likely that some companies and industries will adopt and manage RI-enabling technologies better—or more practically—than others. Telehealth visits for routine medical issues will be a more common practice than ever before, while remote learning for K-12 students may be a more acceptable option under certain circumstances but will likely never be the desired option for most.
As the world returns to normal, will technologies like Zoom or Slack remain? “We think they will,” says Miller. “Many businesses and organizations have now integrated these technologies into their value propositions. They have found ways to interact with customers remotely and run their operations with fewer employees. Ignoring all of this learning as normalcy returns is not likely to make good economic sense.”
And, while it’s been established that working remotely is doable in many businesses, what will become of office culture?
“Organizational culture is the guide rail for an organization,” explains Assistant Professor of Management Lynne Vincent. “But it may be difficult to replicate that same organizational culture when employees are not in the office and are working with colleagues from behind their computer screens at home.”
Assistant Professor Joel Carnevale foresees a workplace culture that will likely forsake perks like free lunches and on-site gyms for those that give more value to employees, like flexibility and autonomy.
“Each organization will have to analyze its culture and its employees to determine what they truly value and how to best emphasize and deliver on these values,” he says.
Marketing Management: Reliance on Data Analytics and Staycations, Learning Experiences Become the Norm
Studies have shown that it generally takes approximately three months for consumers to adapt to new behavioral patterns. Since the pandemic has far outlasted that time frame, it is reasonable to expect some lasting changes in consumer shopping habits, according to Professor of Marketing Practice E. Scott Lathrop.
Consumers have become used to e-commerce, online shopping and no-contact delivery services, so it makes sense that these will continue to expand and thrive. According to Lathrop, many of these retail changes were already underway (think Uber Eats, Amazon Prime and Instacart), but the pandemic shifted these trends into high gear.
To remain competitive, marketers will need to further focus their use of data analytics to tailor prices, promotions and distribution plans to the needs of target customers. To reduce inventory costs, retail space will more likely be used to provide experiences and showcase products, rather than stock every size and variety offered. Consumers will visit brick-and-mortar stores to see, feel and touch merchandise before ordering it online for home delivery—possibly on the same day.
In addition, the rapid expansion of e-commerce will require more efficient supply chains that can reduce the high cost of the epic last mile of home delivery, according to Lathrop. “You may still spot the well-recognized brown UPS delivery truck in your neighborhood, but a post-pandemic version might not come with a delivery person going door-to-door,” he says. “Instead, imagine a fleet of drones released from the vehicle’s roof, clinging to packages to be delivered throughout the neighborhood before returning to the truck like homing pigeons.”
While the familiar shopping mall concept developed in the 1980s and 1990s will likely not survive, retailers will instead develop destination stores where authentic customer experiences that build brand loyalty will become even more important than shopping itself. Lathrop cites Starbucks Reserve Roastery in Seattle and several other major cities as an example of where patrons can sample the rarest and best-quality coffee blends from around the globe, enjoy a decadent dessert, take a barista class and purchase coffee beans or other branded merchandise—all while taking in world-class ambiance.
And, lastly, Lathrop predicts that people will opt to take a vacation closer to home and avoid international travel, at least for a while. Staycations will more likely be the norm and may result in people investing in their own homes with fun and functional conveniences like home theaters, swimming pools, virtual gaming, home offices, video recording suites and smart appliances.
Real Estate: A Move to the ’Burbs and Demand for Warehouse and Digital Property Space
The pandemic has caused great pain for industries like hospitality, retail and office real estate, but it has also seen people’s savings hit record highs, while mortgage rates remain at all-time lows. Significant private equity capital is waiting on the sidelines to be deployed, according to Associate Professor of Finance Milena Petrova, who teaches in the real estate program.
Petrova doesn’t expect to see large commercial market price declines, but, more likely, an evolution happening over time. She notes that, because commercial real estate leases usually have terms of five years or longer, and there will likely be a reduced demand for construction, commercial real estate will be in short supply post-pandemic. This will result in a softer impact on rents and prices, she says, noting that rent collections—both office and retail—have already stabilized to a healthy rate.
“When it comes to residential real estate, working from home has led to weaker demand for housing closer to central business districts, while also contributing to a higher demand and consequential growth of residential prices for suburban housing,” Petrova says.
The pandemic revealed new opportunities in real estate. The tremendous growth in e-commerce has boosted demand for warehouses and industrial space, while the increased reliance on cloud computing and digital communication has led to a growing demand for data centers and digital properties. These areas will continue to enjoy a strong demand and increasing prices after the pandemic has ended.
Retail Management: Consumers Have Grown Accustomed to Conveniences, Technology
The pandemic has triggered long-term impact on the retail industry, including shifts in consumer shopping behaviors, personalized marketing efforts, amplifications of digital experiences and reinvention of retail space.
2020 was a difficult year for retail, in general, particularly in apparel and accessories (including shoes), which were down as much as 27.2%, according to Shelley E. Kohan, adjunct professor of retail management. Department stores, too, were hard hit—down 18.1%, and it seems that almost weekly another closure of a major retailer has been announced. But there was some good news, too. Discount stores, including warehouse clubs, home improvement stores and supermarkets, all experienced growth in the last year, up 7.9%, 14.7% and 12%, respectively. Much of this was due to people stocking up on supplies and having more time at home to complete long-ignored renovation projects.
Streamlined commerce will continue to be a focus for consumers even after the pandemic is over, as consumers have become accustomed to the convenience of curbside pickup, click-and-collect, expedited shipping and online shopping. According to Kohan, even baby boomers, a demographic that had previously been hesitant to adopt many of the more technology-based shopping options, have jumped on board.
Retailers will continue to develop additional processes to accommodate contactless services, including mobile payment and self-checkout. And it will likely take a while for those who feared contracting COVID-19 from crowds to venture back to stores, causing, at least temporarily, a shift to expedited and fewer shopping trips where consumers purchase more per visit.
Convenience will dominate long after the pandemic has passed and will continue and expand the use of store apps, loyalty programs that facilitate transactions, last-mile delivery improvements and easy return processes, according to Kohan. At the forefront will be efforts that are highly personalized and directed to individual customers from data collected from a variety of sources. Two-way communication between customers and brands will be essential and expected. And the use of virtual assistants and chatbots will enhance product recommendation services and customer feedback programs.
Near-sourcing will continue to trend up, as well as the technologies that are rapidly developing to enable and support localized, curated assortments by store locations.
“Overall, retail has been forever changed by the pandemic,” says Kohan. “Consumers’ priorities have shifted, and shopping preferences have experienced step changes. The adoption of digital technologies will become more widespread across multiple generations, and physical retail will revert back to localized small format stores. Ultimately, retailers who embrace this shift will develop and grow a deeper loyal customer base.”
Advisory Board Insight:
Lizanne Kindler Believes Customers Will Return to Stores for a More Personal Experience
Whitman Advisory Council member, CEO of Talbots and executive chair and interim CEO of Ascena Lizanne Kindler is optimistic and confident about the future of retail, although she also confirms that the landscape will never be quite the same.
Apparel retailing had already been upended prior to the pandemic, particularly for those retailers relying on brick-and-mortar locations. Customers already expected to shop with ease, free shipping, overnight delivery and very little human interaction, and the pandemic has only accelerated these expectations, which in turn has meant the end for retailers that were not able to adapt. Retailers who survived are those able to unlock the digital side of the business, and that will continue, Kindler says. She also notes that “stores are not going away.” She believes customers will return to stores for the social and tactile experience they love. “The key to success will be to maximize both sides—having a true view to servicing and operating with an omni view to the customer experience,” she says. “The channels have to work in tandem to fulfill customer expectations seamlessly.”
Post-pandemic, customers will still want to shop with ease, but they will crave an experience that “feels less transactional and more personal than the Amazon experience,” according to Kindler.
“There has been a general reset of what is important in life, and customers will engage with brands they fundamentally feel connected with—whether it’s through a cause they support, a commitment to shopping local or companies that actually try to build relationships with their customers. This goes beyond points and loyalty programs. It’s about creating a dialogue,” she says.
Supply Chain Management: Valuable Lessons Won’t Leave Companies Unprepared Next Time
Anyone who was on the lookout for everyday household items last spring knows that COVID-19 has eliminated any doubt as to how the supply chain is integrated into all aspects of daily life.
“The pandemic has forced every company and government to reevaluate their supply chains, and, if companies are not reevaluating them, then they should be reevaluating their supply chain managers,” says Professor of Supply Chain Practice Gary La Point ’79, ’87 MBA, G’17 (SOE). “The pandemic was a cold, hard slap in the face that supply chain strategies needed review and, in many instances, overhauling. Too many companies were unprepared to deal with surge demand of many essential products, and the risk of single-sourced supply and, in many instances, single-sourced overseas supply, became apparent quite quickly.”
In a post-pandemic world, supply chain strategies will need to be much more resilient. Before COVID-19, companies were reluctant to invest in resilient strategies because they were typically more costly. But lessons have been learned the hard way. Part of this resiliency will see supply chains designed for the regions where their consumers are. For examples, more products destined for North American markets will be sourced or manufactured in the West with Mexico becoming the primary benefactor and Haiti opening up to huge manufacturing opportunities, according to La Point. The pandemic is most certain to spur a new generation of manufacturing in the West, although this will require increased factory automation to drive down costs. However, before we see more near shoring taking place, we are likely to see near storing, putting a much greater emphasis on warehousing and distribution. Additionally, it will not be surprising to see laws passed that limit the amount of critical goods, like antibiotics, for example, that can be manufactured overseas. “The COVID-19 pandemic was a wake-up call, and everyone needs to be prepared for this type of event to occur again,” says La Point.
Associate Professor of Supply Chain Management Rong Li says that a post-pandemic world will bring more opportunities in supply chain and a need to look at all business fields together. She proposes two scenarios. In one, a lack of natural resources at the top of the supply chain will cause an interdependence of different fields to drive the supply, with the upstreams receiving more attention and gaining more resources, like funding, labor, materials, IT, engineering and logistics. Another, which she predicts is more likely, may have sufficient natural resources but a lack of end-consumer demands at the bottom of the supply chain. In this case, the downstreams will receive more attention and gain more resources as they focus on generating more demands by better understanding what consumers want and can afford. This, in turn, will largely shape the future of the upstreams.
Besides the interdependence of different fields, Li also believes it is important to understand how the human behavior of employees and consumers will change post-pandemic.
She predicts that employees will be more accepting of change, as well as of backup plans and adaptations made for uncertain environments. Automation, like driverless trucks and automatic warehouse fulfillment centers, will certainly move many businesses in that direction. And, future logistics will also need to focus on real-time tracing of not only inventory and footprint but also employee health conditions, machine conditions, consumer demand updates and consumer returns and feedback, as logistics providers may largely replace retail salespeople in communicating and interacting with consumers.
While the history books are not quite yet closed on the pandemic, there are many glimmers of hope and the certainty of change on the horizon. Those who intend to succeed in a post-COVID-19 business landscape will need to plan, adapt, accept and learn from both the painful and the productive lessons they’ve witnessed—all while being open to innovation, entrepreneurial intensity, data-driven decisions and the resiliency needed to continue to thrive.
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