It is now a fact that the Covid-19 pandemic acts as a shaper of business developments either as an accelerator for them or as a catalyst for changes in the redefining of the business plan survival of businesses.
The first transformation concerns the consumer’s approach and given that the regime of selling products directly from production to the consumer which was the characteristic of the primary market (e.g., sales of agricultural products in open or closed markets by the producer directly to the consumer) has now become the norm in most enterprises and appears to be adopted as the most appropriate business action in the consumer production industries as well.
by Thanos S. Chonthrogiannis
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In any case, the protracted lockdown and the overall limited number of citizens’ movements play a key role in this business transformation. The second factor that existed but is also the main tool for bringing industries directly with consumers is the development and use of a digital platform on the internet for the direct sale of industries’ products to consumers.
The main element of future business transformation that now occurs due to the consequences of the Covid-19 pandemic is that the producer can now be an industry or a multinational company that will no longer use the intermediary in the form of the wholesaler and/or retailer respectively to address by selling its products to the consumer.
In fact, we will have a continuous and gradual contraction of the profession of wholesaler and retailer respectively and as we move forward and increase the educated training of the consumer about online shopping. This does not mean that the profession of intermediary-trader will be abolished but will shrink drastically as well as minimize any profit margin that occurs and burdens the prices of products.
The degree of importance of a wholesaler of products is especially important because they know where and how and at what rate there are shortages in the markets in the products they trade. What we see is that in the future a lot of wholesalers will either be forced to change professions, or they will have to come together to become even more competitive by reducing their profit margins but by trading much larger volumes of products.
The profession of retailer will also shrink dramatically in numbers that will either lead many of them to change professions or unite as businesses to increase the volume of their products traded. But they will remain as professional retailers in remote areas where consumers do not have easy access by shipping directly from industry to home these products that interest them.
Now industries and not only but also smaller crafts create their own digital platforms on the internet and sell their products directly to the consumer, without the interference of the intermediary wholesaler and retailer respectively, and since there is no profit margin of the intermediary except the transport costs in their products are now sold at lower and more competitive prices.
It is typical of the time when super food markets add other unrelated services to their space by sometimes selling clothing items, household equipment, to provide (in some countries) pharmacy services and to provide car fuel supply, while in their future are the provision of electric car charging and the provision of restaurant services (the last service/restaurants have been postponed due to the ban on crowding customers to avoid transmission of the Covid-19 virus).
This design is based on the logic set worldwide by the business transformation accelerator which is none other than the Covid-19 pandemic but also any type of pandemic that may occur in the future and will have the same requirements from both consumers and businesses.
This logic is none other than a steady reduction in the number of permitted consumer movements, long-term stay at home, the choice of work from home (teleworking) or other personal space of the employee, which forces consumers to choose to receive the desired consumer products at the door of their home or want to find them all concentrated in the same place by making the minimum number of movements from their home.
Examples of multinational companies are Coca-Cola HBC AG which maintains the headquarters of its electronic platform in Switzerland, through which consumers can order the group’s products electronically. While Coca-Cola Company is testing Direct-to-Consumers (D2C) online platforms in Latin America, which platforms have high growth margins.
PepsiCo in turn has created two digital platforms, pantry com and snacks com. In turn, H.J. Heinz Company maintains its own D2C digital platform called Heinz to home.
Cosmetics, soft drinks, catering, etc. plan to grow their revenue by creating digital D2C platforms so that consumers in areas where their products are not available can access them through their digital platforms or through (if possible) the respective supermarkets in their area.
In turn, oil extraction, storage, and disposal companies, with their revenues moving at low levels due to the travel ban and the cessation of air travel, to increase their revenues, are turning their oil outlets (gas stations) into medium-sized supermarkets that will operate 24 hours a day. In this way they plan to expand their retail network of petroleum products.
In any case, logistics and product transfer companies will play a major role in this transformation of businesses and they will have to start expanding to meet the increased levels of demand for their services and given that consumers are now accustomed to this situation and after the end of the epidemic they will wish to take their products home.
It is certain that large multinational companies in the future will make acquisitions of product transfer and/or logistics companies respectively either to better serve their own sales or to increase their profits as business groups.
