With the pandemic driving people to spend more time at home, change their spending habits and avoid air travel, U.K. businesses can expect to see a shift of £134 billion in economic value by 2022, according to Accenture.
The report, titled The Big Value Shift, quantifies the broad impact of long-term changing consumer behaviours and provides actionable insights for companies to build strategies to thrive in the face of disruption. Through a proprietary macroeconomic model, that incorporates data from 38,000 companies across 25 industries, as well as household spending data for 15 countries that account for approximately 80% of global GDP.
According to the latest Accenture Consumer Pulse survey, almost 70% of Brits expect to feel most comfortable spending their free time at home over the next six months. This shift is impacting the traditional retail and leisure industries with value transferring to companies that offer ecommerce and digital-entertainment options.
The highly suppressed demand for air travel has had a profound impact on the travel industry. Data suggests that business travel will be one of the last segments to experience a sustained recovery. As consumers will still have holiday time, value is likely to migrate to sectors like domestic tourism, digital entertainment and outdoor recreation.
“The crisis has forced an uncomfortable reckoning for many U.K. brands – but handled wisely, this will result in new ways of doing business that deliver better experiences for consumers and growth for organisations,” said Oliver Grange, Accenture’s U.K. consumer goods lead. “For example, pre-Covid, many companies relied on in-store shopping and ecommerce and digital marketing were an afterthought. The pandemic has turned this on its head and companies that integrate digital and physical experiences that offer faster, more convenient services will be the winners in what still is a very uncertain future.”
Emily Weiss, global lead of Accenture’s Travel industry group, said, “Fundamental changes in behaviour including heavily reduced air travel and consumer discomfort in public spaces creates opportunity in other areas. Companies need to innovate to drive new revenue streams and look at their ecosystem partnerships to offer value-added services that cater to new ways of working and the health-conscious consumer. For example, the hospitality sector can leverage existing assets to provide hotel rooms for day rates so people can work away from home but still in a safe space. Critically, these efforts could also become a permanent and profitable avenue for growth in the post-pandemic era.”
The Big Value Shift is the first in a series of Macroeconomic Insights that looks at major economic and sustainability trends arising from the Covid-19 crisis and offers guidance for business leaders as they strategize and navigate their companies through unchartered business territory.