A new survey of more than 1,100 marketers conducted by Econsultancy and Marketing Week has revealed the extent to which organisations – particularly large enterprises – are honing in on digital in response to changes in customer behaviour brought about by the Covid-19 crisis.
Among the 156 respondents from customer-facing organisations with £50 million or more in annual revenue, 63% said they have observed a “strong trend” of consumers adopting digital features more rapidly as a result of Covid-19. A further 33% said they have seen “some trend” of this happening.
An additional 40% said they have observed a “strong trend” of older consumers using digital services as a result of Covid-19, with 55% saying they had observed “some trend” towards digital adoption among older consumers.
Companies are meeting this trend with a stronger commitment to digital transformation. When asked how their organisation would be approaching various areas of the business in terms of budget and priority in the second half (H2) of 2020, more than half of the 288 large enterprises (both B2B and B2C) with more than £50 million annual revenue that took part said they would be increasing their budget for strategic initiatives such as digital transformation and restructuring. This was by far the area with the largest percentage of businesses planning to increase their budget.
A further 29% said they would be maintaining their budget for strategic initiatives, meaning just 16% of large enterprises said they were decreasing their budget for strategic initiatives such as digital transformation. Almost a third (31%) of respondents also said they planned to increase their budget for technology or infrastructure spending in H2 2020.
This is particularly noteworthy when compared to the first phase of Econsultancy and Marketing Week’s research, conducted on 16th March, which found that nearly half (47%) of major brands (with £50 million+ annual revenue) in the US and UK had delayed or were reviewing strategic initiatives such as digital transformation.
But the most resounding endorsement of digital transformation in the wake of Covid-19 came from marketing leaders at the director level and above working at large enterprises, 96% of whom said that “The lockdown has increased/emphasised the priority of digital transformation” at their company. Just 4% of directors from companies with £50m+ revenue disagreed with this statement.
A majority of enterprise leaders (57%) also agreed with the statement that “We have a clear theory on how our sector is going to evolve post-lockdown” while 56% of leaders said that, “The lockdown period has been the most innovative I have experienced at the company”.
The rise of innovation during Covid-19
Previous phases of Econsultancy and Marketing Week’s research have highlighted the extent to which innovation of various kinds within large enterprises has increased throughout the lockdown period.
Product or service innovations have seen the biggest jump, with the percentage of marketers at all levels of organisations with £50m+ annual revenue saying that they had observed innovations in products or services in response to the outbreak increasing from 22% on 31st March to 57% on 16th July – an increase of 35 percentage points.
The percentage of marketers who had observed innovations in marketing messaging or branding that might be useful post-outbreak increased by 32 percentage points, from 31% on 31st March to 53% on 16th July. Innovations in customer communication also increased by 27 percentage points over the same period, from 24% to 51%.
Internal transformation has been even more widespread than outward-facing innovation or transformation, with 69% of respondents from large enterprises in the latest phase of research saying that they have observed new processes in the company that they might use post-outbreak (up from 44% on 31st March) and 84% saying that they have observed new ways of working (up from 73% on 31st March).
This shows that at a minimum, a sizeable majority of large enterprises have found themselves reinventing work processes in a way that will last beyond Covid-19 – and more than half have also innovated on products, services, marketing and customer communication.
With almost all respondents at a director level and above reporting that they have increased their emphasis on digital transformation, and a majority also backing that emphasis with increased budget, the second half of 2020 will undoubtedly be a decisive period in many large enterprises’ transformation journeys as they form plans for the future and put them into action – or build on the improvements they have already put into place.
Econsultancy’s Digital Shift Q3 2020 Report delves into the impact of Covid-19 on digital trends and highlights other emerging trends in video, social media, marketing and technology.