Analysis

Businesses go digital to survive COVID-19

26th May 2020
Alex Lynn

As a result of Covid-19, two-thirds (58%) of UK companies are overhauling their business strategies, with half looking to invest in digital. According to research conducted by Opinium and LiveArea, IT infrastructure (57%) and online commerce (41%) will serve as the key components of future business investment.

Business agility will also be crucial, with over a third (37%) considering outsourcing IT, and a third (32%) the marketing function.

Companies are being forced to make the leap to avoid collapse. The study showed the current situation could cause a third (31%) of UK businesses to close before the furlough scheme ends in October. While half (53%) of companies have stopped operating and six percent have closed permanently, the impact of the pandemic is set to grow over the coming months.

Businesses are most concerned about the general downturn across the whole economy (59%) followed by a drop in sales (53%) leading to a collapse of their business. In terms of measures to limit the impact, businesses most desire clarity (55%) from the Government, followed by increased intervention and financial support, including access to grants and loans (44%)] as well as increased support for staff well-being (22%).

“COVID-19 will have a lasting impact on UK businesses. The pandemic has shone a light on the glaring vulnerabilities in our businesses, from tight margins and weak supply chains, to ineffective customer communication and delivery. In a post COVID-19 economy, the key to survival will be business agility,” explained Elliott Jacobs, EMEA Commerce Consulting Director at LiveArea.

“No one will know the exact impact on consumer behaviour, so businesses need to build a strategy that can adapt instantly. Fundamentally, that means following a digital-first approach – developing the technology and culture to put online first. Those unable to make the shift are unlikely to see the end of 2020.”

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