Report: New Risks, Opportunities
Emerging Because of COVID-19
Consumer Behavior Will Shift $3 Trillion in Economic Value
NEW YORK - (BUSINESS WIRE) - 11/23/2020 - With the pandemic driving people to spend more time at home, avoid air travel, and change their spending habits, businesses can expect to see a shift of more than $3 trillion in economic value, according to Accenture (NYSE: ACN).
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| Graphic courtesy of Business Wire |
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, Accenture conservatively found:
- More than $2 trillion of annual value may shift away from industries such as restaurants, traditional retail, and commercial real estate as consumers pass more of their leisure time at home.
- Changes in spending may cause a net decline of up to $687 billion in annual value across consumer-facing industries.
- If current declines in air travel persist into a longer-term shift, up to $318 billion of annual value will flow to different industries and ecosystems.
- “Ripple effects of today’s changing consumer behaviors are causing waves that will reshape industries and their ecosystems. Companies must be ready — with responsive business models, technology-enabled operating models that are agile, and a growth mindset rooted in data and advanced analytics — to uncover new value and better meet customer demands as this wave of change approaches their industry,” said Kathleen O’Reilly, global lead of Accenture Strategy.
According to the latest Accenture Consumer Pulse Survey, nearly three-quarters (73%) of respondents 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 crisis has forced an uncomfortable reckoning for many brands — but, handled wisely, this will result in new ways of doing business that deliver better experiences for consumers and growth for organizations,” said Oliver Wright, global lead of Accenture’s Consumer Goods & Services industry group. “Before Covid-19, in-store shopping was, for most companies, the only ‘game in town’ with ecommerce and digital marketing an afterthought. The companies that fully integrate enjoyable and efficient digital and physical experiences that deliver faster, more convenient services will be the winners in the future.”
The highly suppressed demand for air travel has had a profound impact on the travel ecosystem from airlines and airports to aircraft manufacturers, and even further downstream to hotel chains, energy, and resources companies. Data suggests that business travel will be one of the last segments to experience a sustained recovery. As consumers will still have vacation time, value is likely to migrate to sectors like domestic tourism, digital entertainment, and outdoor recreation.
“Fundamental changes in behavior, 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,” Accenture Travel Industry group global lead Emily Weiss said.
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.
