TDA Founder and CEO, Goran Deak, explains how the COVID-19 outbreak has spurred companies to make themselves crisis-proof and how digital agencies play a crucial role in the response to the coronavirus.
“All the investors and all the banks need to really take a look and see how they can bulletproof their companies and how to increase the speed of the [digital] transformation,” says TDA Founder and CEO Goran Deak. TDA was named a Top 50 Global Startup by Startup Grind Silicon Valley two years in a row.
There has been much talk of recession-proof businesses, those that thrive during times of economic downturn. These range from small-ticket items like cosmetics and candy to more substantial products and services like luxury retail and healthcare. Businesses in these verticals tend to do well despite recessions. But while a recession can create an economic crisis, the term crisis also includes things like natural disasters and epidemics.
What is the difference between recession-proofing and crisis-proofing?
When a crisis hits, even recession-proof businesses are not always prepared. Case in point, luxury retail has often been cited as a recession-proof business. But the recent coronavirus outbreak has wreaked havoc on the luxury retail business. First, supply chains were disrupted as the Chinese outbreak hit production facilities. Then, with Chinese consumers also becoming the world’s leading luxury spenders, closing stores in China hurt sales further. Add to that increasing reluctance to visit stores and malls that house luxury retail in other locations such as the U.S.A. and you have a decidedly not crisis-proof business vertical.
Crisis-proofing means crisis preparation
The coronavirus crisis is pushing businesses to ramp up their digital transformation. In the wake of the coronavirus crisis and massive closing off of whole cities, regions, and even countries, companies around the world that were in various stages of digital transformation have suddenly been forced to prioritize automating products and services as both consumers and employees stay home and become more isolated.
Many day-to-day exchanges that required person-to-person contact have slowly been becoming more automated. The coronavirus outbreak has forced many businesses to pick up the pace as quarantines and precautionary closings of key places have led consumers to seek digital alternatives for getting products and services.
The results have already proven disastrous for many businesses as growth has slowed, and recession is imminent in many countries. With so many supply chains affected by the Chinese outbreak and consumers in countries around the world staying home, the economic crisis has been reflected on Wall Street, Main Street and everywhere in between.
On how coronavirus is affecting businesses today
If we take a closer look at what a health crisis like the coronavirus has done now, it has only increased the speed and it will continue to increase the speed of the digitalization of companies, solo entrepreneurs and enterprises in general in the close future but also in the long-term future.
On coronavirus and consumer behavior
If we are talking about how brands are communicating, we can see everybody from nonprofits, to governments, to small businesses and enterprises using social media and social media channels for critical health and safety information…If we are talking about the retail industry, we now see a heavy uprise of e-commerce and users ordering stuff at their homes, especially daily goods.
On whether the current business landscape is temporary or permanent
It’s never going to return to how it was just a few months ago. And if we take a look, from the entrepreneur perspective and enterprise perspective, now people will heavily think about the automation of their processes, robotization of their processes.
On how businesses should view the coronavirus challenge
The retail industry is given a new moment, with all the users now being scared and sitting at their homes and saying, we would rather order stuff to our home than go out to a store and pick up something by ourselves.
You can do e-commerce really fast, you can do social media outreach really fast, you can do website upgrades really fast, you can do apps really fast if we’re not talking about really, really big projects. For a crisis like this, you can really do a fast adaptation to the technologies…Entrepreneurs and companies, in general, should see this as a really big challenge but also as an opportunity to take their businesses to the next level. And they never had a better reason to do that.
On organizations that are slow to change
When you take a look at something that’s really traditional and really rigid such as governments and countries, you can see that they are already digitizing overnight and using social media in a way that they didn’t use it until now.
On what makes this crisis different from others
If we take a look at 2008, and the global crisis that hit the markets in 2008, the technology still wasn’t ready and still wasn’t there. The speeds of internet connectivity was still on the low level. The level of your personal devices such as mobile phones, wasn’t sufficient to handle really complex applications and processes which you have now. And now for the first time in human history, you have something that can help.
On planning for the future
Now all the investors and all the banks need to really take a look and see how they can bulletproof their companies and how to increase the speed of the [digital] transformation they’re already doing.