Trust, innovation key to winning consumers as COVID-19 scars remain
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As the COVID-19 pandemic continues, whether the economy will ever be the same again remains is still a significant unknown.
The literal shutting down of much of the economy has resulted in higher unemployment, plunging GDP and dented consumer confidence.
Around 195 million jobs disappeared during the June quarter of 2020, according to International Labour Organisation estimates.
Although consumer confidence is picking up and jobs are returning in some economies, it is not yet enough to return the global economy to growth.
Bloomberg economist James McIntyre today released long-term GDP predictions of a gradual recovery in 2021 and 2.8 per cent growth for the rest of the decade.
But he has consistently warned weak economic sentiment is a continuing risk to recovery.
Even when economies start to grow again, experts warn that things will never be the same, particularly in the service industry.
This industry is critical in Australia because it accounts for four out of five jobs and 70 per cent of the country’s GDP.
A new study, led by Dr Leonard Berry at Texas A&M University with support from Monash University’s Professor Tracey Danaher, found that the service industry had no choice but to change the way it did business and many of these changes could be permanent.
While these changes were about meeting obligations, some could be a winning recipe for attracting customers.
“This pandemic has provided opportunities for the service sector to rethink how they conduct and deliver business – leading to innovation that not only makes everyone feel safer, but also improves the service experience in the long term, regardless of whether a public health crisis is present,” Danaher said.
She pointed to events like the rise in telehealth and virtual sales for property and cars.
ASX stocks in these particular sectors have been a favourite for investors, with the likes of real estate tech stock AssetOwl (ASX:AO1) increasing nearly fivefold in just two weeks thanks to skyrocketing demand for its virtual inspection services.
One sector hard hit by global lockdowns has been retail.
While not all were forced to close stores, many had to implement safety procedures, such as physical distancing and offering hand sanitiser, to be able to continue to trade.
Some businesses may choose to keep these measures in place beyond their legal requirement as they seek to keep anxious consumers coming through their doors.
“Above all, trust must be the central focus for the service sector,” Danaher said.
“Organisations must reassure customers and employees that their physical environment is safe, that information is accurate and reliable, and that they can be trusted to deliver a safe and welcoming experience.”