As we look forward to leaving Covid in the rear-view mirror, there’s no doubt that it has left quite a mark on us all, in both our personal and work lives. There are plenty of post-Covid predictions floating around, but how realistic are they? Here are our thoughts on the top four changes we can expect to see in the Irish business ecosystem.
Miles of news copy have been written about the return, or not, to the office. Workers can’t wait to get back; workers are dreading it. It will be good for business; it will be catastrophic. Some household names, such as Spotify, have announced that they will be offering permanent flexibility to employees in the future – giving them the choice of working from home, from the office, or a combination of both. Last October, Dropbox decided to become a ‘virtual first’ company, meaning that remote work will be the primary experience for all employees. A toolkit and various resources are in place to support this and the Dublin-headquartered company recently unveiled what this would look like in terms of their office spaces (now called Dropbox Studios).
The pandemic has given companies the chance to rethink what the working week could and should look like, and some have really innovated in this space. The multinationals certainly have the budgets and resources to explore these new ways of working and make the most of them. But I suspect that, for the average business, having employees in the office will still be important post-Covid. For example, onboarding and training (both informal and formal) are a lot easier face-to-face. For smaller businesses, it will be too hard to build and maintain a work culture when their handful of employees are scattered far and wide, and a percentage of time spent in-office will be essential for nurturing team spirit and collaboration. The option to work from home will likely be seen as a privilege rather than an entitlement.
Banking has been changing in recent years (see our blogs on challenger banks and alternatives to bank loans) but the pandemic seems to have accelerated that evolution considerably. This shift in behaviour probably came about because people were avoiding face-to-face interactions or were working from home and not in the same location as their banks. When they found that the services they needed simply weren’t available online from their existing institutions, they turned to alternative banking services.
Pillar banks consistently fail when it comes to good online user experience, so challengers such as Revolut have come to the fore in a big way. These fintechs are able to meet user expectations (for example, simple actions like being able to split a restaurant bill) and this will win loyalty from both personal and business customers. With organisations such as the Strategic Banking Corporation of Ireland (SBCI) helping companies to access funds through alternative lenders such as LinkedFinance or Close Brothers and international payments no longer costing the earth thanks to FX fintech Wise (formerly TransferWise), I anticipate that traditional Irish banks will continue to lose business in this market.
Events and conferences
It seems that business events are going to look a little different in the future too. Last year, events that weren’t simply cancelled were moved online. Through platforms such as vFairs, you could attend a conference by logging in and navigating to different ‘stages’ where talks were held in a typical Zoom format – some live, some prerecorded. Although virtual, the experience was not completely dissimilar to attending a ‘real’ conference. Due to the novelty of this experience for many, a lot of business events last year were either free or very low cost.
As the world opens back up, physical events will need to accommodate participants who want the flexibility of either attending in person or remotely. Now that people have experienced online events, they might not always want the hassle and additional expense of travelling to an in-person event. Hybrid events will be the future (something we discussed recently with our client, AVCOM, which is innovating in the hybrid event space), and events that go back to a pure in-person experience will be missing out on a whole new revenue stream from remote audiences.
Ecommerce and retail
Many of us were already accustomed to purchasing online for both work and our personal lives. But successive lockdowns saw many people who would typically buy in-person turning to online retailers. Established players such as Amazon have benefitted hugely from the increase in ecommerce sales. In its 2021 first-quarter results, amazon.com announced that net sales had increased 44% to $108.5 billion, compared with $75.5 billion in the first quarter of 2020.
Back at home, Irish online retailers are estimated to have seen a 159% increase in sales. According to a study by Wolfgang Digital, the top 15% of Irish retail businesses capture 84% of consumer spend. This leaves the vast majority of sellers battling over a tiny portion of the market, and Amazon’s new Irish fulfilment centre will squeeze the market further.
Schemes such as the Trading Online Voucher gave smaller businesses a fighting chance last year. It was so oversubscribed that the government had to increase its funding, but this meant that lots of local SMEs had a proper online presence for the first time ever. Now that we’re all more used to shopping online, Irish ecommerces will face a new challenge: the desire for instant gratification will see consumers expecting same-day/next-day delivery when they purchase (something that’s completely normal in markets such as the USA). Delivery times in Ireland can be painfully slow, so businesses that can crack this problem will be ahead of the curve.
Some other predictions for post-Covid Ireland
Offering coaching, mentoring, and training online/remotely will be automatic, even if some people will still prefer face-to-face sessions. And I think we will see much more one-to-one and tailored training services, targeting specific knowledge gaps. This changes the traditional training model quite a bit, as training companies could previously charge very high fees for group sessions held in the classroom.
Huge job losses must be coming. Once the PUP and EWSS subsidies are over, there will be no more masking the job losses that have undoubtedly occurred, especially in unskilled work. I believe the job market will become a lot tougher than we have come to expect in recent years, even for graduates.
Where does this all leave the economy? I don’t think we’ll see big tax hikes, rather the gap between rich and poor will continue to increase. Those companies and individuals that were doing very well before will carry on doing well. Quantitative easing will see money pumped into the economy via the usual mechanisms, so there will probably be new jobs in the civil service and new or extended schemes for businesses.
With so many purchases happening online, I’m predicting a trend towards big brands using their high street presence like experiential showrooms. They will be part of the marketing strategy rather than revenue-generating spaces. This leaves more high street space for hospitality businesses and personal services such as hairdressers, etc. But high rents and rates means there will be fewer independent retailers.
One change we’ve seen in Irish towns is the revelation that eating and drinking outdoors is a great experience (while the weather holds). Councils have been testing out the possibility of pedestrianising certain streets and converting parking bays into seating areas for the businesses beside them. Hopefully, demand will see a permanent change to legislation and make this al fresco spirit a permanent feature in our urban areas.
If Instagram is anything to go by, baking became the nation’s favourite pastime last year. But banana bread wasn’t the only discovery we were making in our kitchens. Thanks to remote working, many people (re)discovered a love of cooking and healthy food became more of a priority. This is reflected in the surge of interest in vegetarian, vegan, or flexitarian (not completely excluding meat) diets.
Increasing numbers of people feel their intake should be more plant-based, and lockdown was the nudge they needed to make a start. This has led to a noticeable increase in veg box delivery services, online cookery classes, vegetarian/vegan sections in menus (and some hospitality businesses that are purely vegan or vegetarian, like our client the Vegan Sandwich Co.), plus lots more meal options and meat alternatives in our supermarkets.