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Friday 20th August 2021
Hi Friend,
2020 The Year of Digital Acceleration ...
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| 2021 Our new series on Digital Accommodation ...
2019 was the year of digital disruption, 2020
was the year of digital acceleration. Satya Nadella CEO of Microsoft
would say, "we have seen two years of digitalisation in two months".
Some would recall the words of Lenin ... "There are decades when nothing
happens, then weeks when decades happen."
The Covid pandemic
resulted in the lock down of large parts of the economy. Businesses were
forced to close offices and operate remotely with employees working
from home. Sectors hit badly in the process were accommodation, food,
travel, tourism, leisure, entertainment, pubs, restaurants and high
street retail.
Online and into the cloud became the mantra for
all businesses. Communication systems flourished. Zoom became the hot
"verb" for on line communications. Microsoft teams, GoToWebinar and
Cisco Webex joined the fray.
Businesses were forced to centralize
communication networks and data storage. Microsoft 365 had set the
standard for online data exchange, storage and communications. Microsoft
Teams offered chat, calls and video. "A platform in which anyone can
engage at any time, bringing everyone closer. Docs, photos, videos,
chat history, and meeting notes are always online, so it’s easier to
work together."
Google offered Workspace, Facebook developed
Workplace. Slack enabled collaboration among team members with features
including direct messaging, private groups, and channels organized by
topic.
Instant messaging services included WhatsApp, WeChat, Telegram, Signal, Skype, Viber and Discord. Data
exchange platforms included Box and Dropbox. CRM systems had to be
upgraded and integrated. All Smart businesses were experimenting with
"Agile" and "Scrum" software. |
| Moving Online and Into The Cloud ...
Moving online and into the cloud
would accelerate the process of centralized communication. Investment in
systems and hardware became a priority. Not all members of staff would
have the right equipment and space available to work from home.
Focus
on family and home led to a change in lifestyles and for some, a
reassessment of work life balance. Online shopping accelerated. Amazon
was setting the standards for UX and UJ by which all other would be
judged. One-click and Amazon Prime set the pace for next day delivery.
In
the UK in January 2020, 19% of sales were made online. Online food
sales were limited to just 5% of total sales. In March 2021, online
sales accounted for 35% of all transactions. The proportion of food
sales online had more than doubled to almost 12%.
The damage to
traditional retail was intense. Shops closed at a record rate in the
first half of the year. Online giants went on a shopping spree. Boohoo
picked up Debenhams, Dorothy Perkins, Burtons, Karen Millen, Warehouse,
Wallis and Oasis. Asos placed Topshop, Topman and Miss Selfridge in the
Basket.
Cinemas struggled as home entertainment surged. Streaming
and subscription services were the beneficiaries. Netflix was valued
at $250 billion dollars at the start of 2021 almost doubling in value
compared to pre pandemic levels.
Disney Plus is considered to be
the top Netflix competitor. It offers the widest variety of content ranging from animated masterpieces, documentaries, the Star Wars, Marvel
cinematic franchises, and the Disney Channel’s expansive library of
movies that go back to the 1950s. Disney’s acquisition of Fox in 2019
has expanded its back catalog of content to include popular shows like
The Simpsons.
Amazon demonstrated the concept "Content is Key"
paying $8.5 billion dollars to acquire MGM. The company is investing
heavily in growing its position in the entertainment world. MGM is the
home of James Bond. It is one of the most iconic movie studios in
Hollywood. The deal gives Amazon an extensive library of film and TV
shows to fill out its Prime Video content streams. MGM has a catalog
with more than 4,000 films and 17,000 TV shows.
Home
entertainment became important but so did home food sales and delivery.
Deliveroo, Just Eat, Uber Eats, Delivery Hero, Grub Hub raised $billions
in the race to satisfy the appetite for takeaway food. Ocado, Getir and
others would seek to meet the appetite for grocery delivery.
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| Cash is Trash ...
2020
was the year of acceleration in digital payment. Jamie Dimon of JP
Morgan would say "cash is trash". It was a reference to the meagre
returns on cash investment.
In 2019 cash accounted for almost 30% of
total transactions. By the end of 2021, just 10% of transactions are
cash based. The proportion will fall to less than 5% within two years.
Visa, Mastercard, Paypal, Stripe and Square will continue to reap the
harvest of a lower cash yield.
"In China citzens make over half a trillion electronic payments per year. That is more than the rest of the world put together, largely driven by two “super apps”: WeChat and Alipay. It is hard to comprehend how big these two have become and how people interact with them. The average Chinese consumer doesn’t carry cash anymore. They will use those apps five or ten times a day for everything." G Leibbrandt The Pay Off: How Changing the Way We Pay Changes Everything .
2020 was the year of digital
acceleration. Online and into the cloud for businesses. Work from home,
eat at home and be entertained at home for employees and families.
Workers may be reluctant to return to the old model of workplace.
Businesses will be unable to return to the old model of work. Digital
Accommodation is our series for 2021, learning to live with life on
line ...
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| | Digital
Accommodation is our series for 2021, learning to live with life on
line.
Developed in our August break, we will be releasing the updates over the next couple of months in addition to our weekly updates from The Saturday Economist Team.
We look at the future of work, the future of
retail, the future of payment, five platforms of disruptive innovation, trends that will define 2021 and beyond plus a reminder the
"Metaverse" is coming, you will be in it, ready or not.
Want to ensure you receive our updates, Join the Club, become a Premium Subscriber, don't miss out, we value your support ... Want to get closer, join our Private Client Group check out the home page for more details ...
John
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© 2021 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
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