Covid-19 has drastically disrupted the global business landscape, where halts in commercial activity have resulted in loss of income on a wide scale. Organizations are faced with a double-edged challenge; to navigate severe financial and operational impediments while simultaneously addressing the shifting needs of their people, customers and suppliers. In order to sustain future income and ensure stability, organizations are required to accelerate agile ways of working, providing room for course-correction as circumstances change, in ways that can outmaneuver uncertainty.
Retail and Consumer Goods
Coronavirus has both inhibited retail outlets and significantly altered consumer behaviour, largely accelerating the movement towards e-commerce and digital consumption. Habits formed now will likely sustain beyond the crisis, permanently changing what consumers value, and how and where they shop. According to the OECD, retail accounts for almost 5% of national GDP, on average, and employs 1 in 12 workers in a national economy’s workforce. Retail sales have been hit particularly hard in the US, dropping by 89.3% in April 2020 year-on-year. In the EU, a 23.8% drop was recorded.
Transport and Logistics
The effect of coronavirus on transport and logistics spans a wide range of markets and service providers across the globe, from civil aviation to industry supply chains. Maritime shipping saw near 25% reduction in the first half of 2020 while stringent border control policies have substantially reduced road transport activity too. Transport inhibition has had significant knock-on effects for a number of industries and value chains. Automotive parts, clothing, flowers and construction materials have been particularly adversely affected.
Additionally, flight cancellations and country-specific restrictions has grossly disrupted air travel. Estimates indicate a potential 44% drop in passenger revenues by the end of 2020, totaling $252 billion (US) in lost income.
Tourism & Hospitality
Global efforts to contain the pandemic may result in a contraction of the tourism and hospitality sector by anywhere between 45 and 70% globally by the end of 2020. Many hotels, restaurants, tour operators, airlines, and cruise ships have seen significant revenue losses while others have suspended their operations indefinitely. In the accommodation and food services subsectors, close to 60% are made up of micro-enterprises and sole proprietorships that are especially vulnerable to the prevailing economic conditions.
Music, Culture and Entertainment
Covid-19 has resulted in major instability of the media and culture industry, witnessing a sharp fall in economic returns. In music and events, for instance, lockdown measures have triggered an estimated $10 billion (US) loss in sponsorship revenue world-wide. While audience engagement has been significantly reduced, consumption of digital content – audio and audio-visual – has increased, with streaming services taking a large portion and further replacing physical sales. Furthermore, cancellations of concert tours and festival circuits has caused a delay in the release of new recordings and diverted efforts to focus increasingly on performance livestreams and virtual events.