The Impact Coronavirus is Having On UK Businesses

It’s official, the United Kingdom is now well into a period of lockdown, the length of which is uncertain. But what does that mean for UK businesses?

While many businesses are temporarily closing, others are dealing with the challenges of operating during a national state of emergency and may come out ahead.

Short-term impacts

As well as the increased sales of food and other essentials that triggered by stockpiling as the crisis emerged, there have been other effects:

Increased internet activity

Many businesses remain open and are trying to maintain business as normal with members of staff now working from home where possible. There has been an increase in the use of video conferencing for staff to stay in contact during the lockdown with Zoom and other services seeing large increases in members. Microsoft Teams and other collaboration tools are also proving essential for staff working remotely.
The coronavirus lockdown has roughly doubled the UK’s internet usage during the day, according to Virgin Media. Unsurprisingly, video streaming services have seen a huge boost in viewers.

YouTube and Amazon Prime have seen such a large surge in traffic that they’ve had to reduce the quality of streaming on their platforms in Europe to help internet infrastructure cope. Disney+ have also slashed video quality by 25% as coronavirus strains Britain’s internet.

Delivery services

While shops have been shuttered, many e-commerce operations have continued with stores such as John Lewis maintaining their e-commerce and delivery operations. Many restaurants are now registering with delivery platforms to send their food to customers in a bid to mitigate the negative impact of the crisis on their business. Deliveroo says it has registered almost 3,000 new UK restaurants on its platform in the past month.

Digital marketing

As well as consumer and retail activity moving on-line, digital marketing can also continue to reach those that are working from home. B2B businesses are therefore likely to increasingly use digital marketing as an alternative to traditional methods to reach their potential customers. The increase in digital marketing for B2B businesses is also likely to last well beyond the initial crisis as firms start to see the results that can be generated and become more comfortable with it.

A recent survey found that one in twenty marketers claim to be profiting from the outbreak by using new marketing channels.

Due to increased internet traffic, some businesses may view this as an ideal time to increase digital advertising campaigns. Competition on digital channels can be fierce though and to generate a return it is important that those businesses using digital marketing for the first time have the support and the right expertise to help them.

Long-term impacts

Travel companies and countries that rely on tourism to boost their economies will struggle for some time due to the uncertainty and reduced consumer confidence. This industry may take a few years to fully recover, depending on how long the coronavirus crisis lasts. It’s clear that the crisis will negatively affect many countries’ economies over the coming years.

Many economists initially predicted a U-shaped recession characterized by a steep decline, followed by a low period, before the economy recovers again. As the crisis has deepened the recovery may well take longer than anticipated.

The winners in recession:

  • Outsourced services – providing access to specialist expertise and reducing staff numbers can help
    businesses reduce their costs.
  • Staples & Comfort items – during a recession, consumers continue to buy comfort goods to treat themselves at home, such as alcohol and cosmetics. Supermarkets and essential services will continue to be needed.
  • Health and Funeral services – there will always be a requirement for these as people continue to need health services or to die in the good and the bad times.
  • Repair services – in a recession people are less likely to buy new items, meaning various repair services will see an increase in business.

Digital Transformation

It is likely that the coronavirus crisis will further accelerate the digital revolution, and that we won’t revert afterwards. People initially may move to digital solutions using technology and digital techniques to connect them to colleagues, customers and potential customers to help cope with social distancing. The marketing shift to digital during 2020 will last if companies see good results. They are then likely to continue to utilise digital marketing techniques after the crisis is over, thus boosting these channels at the expense of others such as events and telemarketing.

Summary
The immediate effects of the coronavirus are clear to see with many businesses laying off staff and some shutting their doors for good. The global crisis is certain to have a negative impact on the economy and likely to lead to a serious recession. Most businesses may be struggling to adapt, but some digital sectors are prospering, and the crisis is likely to lead to an acceleration of the digital revolution and the long term move to digital marketing and e-commerce. These effects are likely to occur in both business to business and business to consumer markets.

Growthlabs are a digital marketing agency that helps customers to maximise returns from their online presence and their investments in digital marketing. If your business need expertise to help develop digital routes to market, why not contact us to discuss how we can help.

Accreditations:
Google Partner B2B Marketing