Just as the world scrambled for vaccines in the face of the COVID-19 pandemic, businesses were also forced to adapt to find their own commerce cures.
Some companies were lucky. Both Amazon and Netflix were well positioned to thrive because of the nature of their business, as locked-down populations looked for distractions. However, huge swaths of the business world came under pandemic siege and everyone from app developers to restaurants were forced to pivot to survive.
Harvard Business Review [HBV] defines “pivoting” in business as a strategic manoeuvre to ensure short-term survival, that also eyes long-term resilience with value being shared between company and customer to see the enterprise through a challenging period.
A surprising example is Cambodia’s dominant social media channel, Facebook, which was forced to pivot after small and medium business (SMBs) slashed marketing budgets
“Knocks to Facebook’s advertising business during the pandemic have been offset by its 2.6 billion entertainment-starved users spending more time on the platform,” it said, which Facebook capitalised upon by launching new features.
“[As] SMB advertisers slashed their marketing budgets, the company launched new video chat and livestream features, as well as an e-commerce play, known as Facebook Shops, to rival Amazon,” said Britain’s Financial Times.
Dating apps were also forced to pivot to capitalise on higher user-engagement rates while recognising the need to adhere to social distancing. “As millions remain confined to their homes, the desire for human contact and connection has risen dramatically,” said market analysts Business Insider (BI), which noted dating apps were recording significant increases in swiping activity during the outbreak. In response they introduced new features to further monetise or increase time spent on their apps. One example is Hinge which launched the “Date from Home” feature. It allows users to indicate to a match that they are ready to move their conversation off-app, a feature with great appeal to locked-down audiences.
HBV said three conditions are essential for business pivots to work. “First, a pivot must align the firm with one or more of the long-term trends created or indeed intensified by the situation. Second, a pivot must be a lateral extension of the firm’s existing capabilities, cementing – not undermining – its strategic intent and, third, it must offer a sustainable path to profitability, one that preserves and enhances brand value in the minds of consumers.”
Other direct-to-customer businesses have also given their models a rethink in order to survive the virus. In Cambodia, partial closures and fear of the virus have seen footfall drop dramatically in restaurants, something that vegan restaurant Bong Bonlai tackled by investing in a meal-delivery platform. “We were more or less able to maintain revenue, with a corresponding uptick in lunch and dinner subscriptions just as our in-house dining crashed. That meant we were able to keep staff. We actually had to hire one more person to coordinate the delivery orders,” said owner Irina Chakraborty.
HBV said: “Eat-in, take-out, delivery and catering are just the tip of the iceberg.”
Travel company and accommodation specialists Airbnb were also forced to pivot after tourism was particularly affected by the virus, grounding flights internationally. “Faced by the sudden collapse in travel, the company moved swiftly to help hosts connect with potential guests, creating features to offer online events focused on cooking, meditation, art therapy, magic, songwriting, virtual tours and more,” HBV said.
This pivot represented Airbnb evolving from its traditional business model of facilitating matches between hosts and guests to a full-range lifestyle platform.
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