Over the past year, the global business landscape has
become much more precarious due to the global
pandemic.
Globally, businesses have had to manage dual
economic and health crises, which have forced businesses to
adopt new employee and customer engagement tools, remote
working, and the re-engineering of supply chains.
As
New Zealand opens up to other countries, what should
businesses prepare for and what are the emerging mega-trends
that New Zealand may have been largely insulated
from?
Accenture New Zealand Managing Director Ben
Morgan says:
“Undoubtedly, the pandemic has been
disruptive for New Zealand businesses, and that’s been
especially painful for those industries that depend on open
borders. New Zealand’s success with eliminating Covid-19
has fortunately meant the business operating environment
here has been much kinder compared to many other
nations.
“The mode and operation of businesses in
most other countries has likely changed forever. As
restrictions begin to ease around the world, New Zealand
firms should similarly consider how these major shifts in
business landscape can be adopted for their business
models.”
Growth is increasingly found in
unfamiliar places
The global pandemic and
restrictions on travel meant that companies were less
interested in expanding into new locations. Instead, they
are expanding their range of product categories and
investing in data and analytics to better understand
customer preferences and capture new markets.
In 2015
companies across the world spent 67 per cent of their merger
and acquisition budgets on geographic expansion. Now, that
figure is just 16 per cent.
“Traditionally, large
companies would have looked to expand into new locations
domestically or overseas. International travel restrictions
have changed this trend and we now see large companies
acquiring businesses in unfamiliar industries to continue
their expansions,” says Morgan.
“As New Zealand
and the world opens up it remains to be seen whether
cross-border expansion will continue at pre-pandemic levels,
or whether businesses will expand into further categories in
their domestic markets.
“For example,
internationally there has also been an increase in
businesses selling directly to consumers and bypassing
retailers. The proliferation of online marketplaces has
helped smaller businesses connect with consumers locally and
internationally.
“The trend towards online
marketplaces and direct business to consumer channels has
been fuelled by wider acceptance of e-commerce and reduced
retailer footfall, and that includes New Zealand. For
example, Wine Collective Direct connects boutique wineries
to international consumers and Maker2U is a thriving local
marketplace for small Kiwi
businesses.”
Don’t go it
alone
Having a good range of partners is an
important strategy for growth. By partnering with the right
organisations, businesses can present complementary products
and services alongside one another, creating an easy
one-stop-shop for customers.
Accenture research shows
that 60 percent of executives are now trying to drive growth
through ecosystems.
“Business partnerships are not
new, but we can expect this trend to gain more prominence in
the post-Covid world landscape. This type of business
collaboration has existed for some time, especially when
booking travel so we can expect airlines partner more with
rental car firms and accommodation providers to make it easy
to book all services across
platforms.
“Internationally, we are increasingly
seeing this model being picked up by more companies that
complement one another as it is a way that companies can
positively reinforce one another. Much of the success of
these ecosystems will be down to the technology connecting
each company, and the ability for customers to gain service
and support from each of the partners,” says
Morgan.
Data shows the
way
The international disruption from the
global pandemic caused incredible uncertainty. It has meant
that businesses are warier of taking risks and want to see
hard data to inform their decisions.
Accenture
research found companies that successfully scale data and
artificial intelligence achieve nearly three times the
return on investment and a 30 per cent premium on key
financial valuation metrics.
“New Zealand is a
leader in smart, data-driven technology. Coca-Cola’s
intelligent vending machines were first invented in
Masterton in 2015. They are now rolled out across much of
the world, and the data they collect is used by the company
to understand local consumer preferences and determine the
viability of new products.
“When companies use data
to understand customer preferences, they can tailor their
offerings and create better customer experiences. The
successful gathering and use of data will lead to more
satisfied customers, increased sales, and ultimately better
business growth. We can expect data to play an even greater
role in the post-Covid world,” says
Morgan.
Financial success alone isn’t
enough
Ethical consumption remains a
significant consumer trend. Consumers are looking more
closely at who they purchase their goods and services from,
and businesses are adapting their offerings and
ethos.
In recent global research from Accenture, 50
per cent of consumers said they were making more sustainable
purchasing choices and will continue to do so after the
global pandemic.
In response, businesses are
increasingly adopting environmental and social goals
alongside their financial metrics. Annual reports are being
replaced by integrated reports, giving a more holistic view
of the company and its work.
“The global pandemic
has encouraged consumers to rethink what they are buying and
the ethos of the products and companies supplying them. They
are choosing to make more sustainable spending decisions to
support companies whose values align with their own,” says
Morgan.
“This is particularly true with smaller
luxury items like perfumes and makeup. Consumer may be more
cautious with their spending, but they still want to be able
to support brands that are supporting environmental and
social programmes that help communities and the
planet.”
