Companies within the infrastructure and transportation sectors are known to be asset-heavy, making high upfront investments to build unique assets and economic moats, with a promise of stable long-term revenue. Yet, both industries rely on traffic and social gathering—and as such both were dramatically impacted by the COVID-19 pandemic, upending any sort of stability these companies might have forecasted.
So, what happens when a company’s value proposition becomes its biggest burden? What happens to toll road operations when traffic drops up to 85% in a few weeks? What happens when passengers cancel flights and avoid airports fearing contamination? What happens to running construction projects when governments impose social distancing regulations that hinder construction worker collaboration?
You get my point. At first glance, many infrastructure and transportation companies seem to have solid, stable and reliable business models for the long-term. However, the coronavirus pandemic has proven to be an unpredictable event with massive consequences. Today, nearly one year on, these industries and many others are still struggling to adapt.
The COVID-19 pandemic is transforming how we live, interact, work and move. For example, since the onset, consumers have become more aware of the level of hygiene and sanitation of products or services they use or spaces they visit. Going forward, customers may expect higher standards of cleanliness. In fact, sanitation could be fundamental for reducing anxiety or fear of visiting public or shared spaces, such as airports or shared mobility services.
The Changi Airport in Singapore is one example of a company that has had to adapt to this consumer behavior shift, deploying a multitude of coordinated initiatives to enhance cleaning, sanitation and hygiene, minimizing the likelihood of contamination and reducing passenger anxiety. These actions range from using infrared temperature screening systems, applying sdst coating (Self-disinfecting Anti-Microbial) on frequently touched surfaces and using “ozone-infused water” to disinfect toilet bowls, urinals and the floors of its restrooms. Such an emphasis on deploying technology or changing processes to directly address consumer concerns demonstrates the necessity of taking the extra step to keep customers safe, while also staying ahead of policy and regulation.
To stay relevant in a Post-COVID world, businesses will need to observe consumer behavior shifts and act accordingly. This requires monitoring current behaviors to address these needs, then extrapolating on this reality to anticipate needs for the future. Companies that listen closely to their users and observe shifts in their behavior will be nimbler to address emerging needs.
Transportation businesses often require a high level of asset utilization to be profitable. During the pandemic, however, many of these businesses have seen a steep drop in traffic due to second order effects of social distancing and city lockdowns. Widespread adoption of video conferencing tools from home offices and new travel restrictions have reduced demand for business travel. Consumers are staying home, engaging with e-commerce instead of traveling to make purchases in-person.
It takes creativity and flexibility to pivot effectively. During the pandemic, Didi Chuxing announced an expansion into a new food delivery business. The ride-hailing company shifted its operating model rapidly, orchestrating the rollout of the new service into 21 new Chinese cities simultaneously. This was an effort to leverage its existing platform and network of drivers, to reduce the impact caused by declining demand for ride-hailing services. Now, Didi Chuxing is capitalizing on people staying home, offering safe delivery services for groceries and coffee.
In a Post-COVID world, it is easy to imagine why customer-centric companies will thrive. If companies can reimagine use of their capabilities and assets to fulfill evolving customer needs, then they can adapt to change.
Companies that can react fast and adapt to the “New Normal” are more likely to recover Post-COVID. We can imagine a world where consumers choose and stick to brands that continually innovate into new opportunity areas that create more value to users through new products, services and experiences. In this scenario, speed to action in response may trump perfection in execution. Companies may need to learn on the go in order to venture into new spaces, as well as enter strategic partnerships.
One example of a company both venturing into news spaces and forming partnerships is Waymo, a sister company of Google. To the general public, Waymo is known for its “Waymo One” initiative, providing self-driving robotaxi services to consumers in Phoenix. With the drop in demand for ride-hailing during the pandemic and rapid growth in e-commerce, however, Waymo raised $2.25 billion and launched “Waymo Via” in March 2020, a self-driving alternative to conventional long-haul trucking and transportation of goods. A few months later Waymo also announced a partnership with Daimler Trucks for the development of self-driving Class 8 commercial semi-trucks, expanding its efforts in logistics and transportation of goods.
A focus on customer experience (CX) can help companies make the transition into an uncertain Post-COVID future, offering direction into where to diversify to best meet customers’ emerging needs. Particularly asset-heavy industries like infrastructure and transportation will need to find new value in their investments to move forward. This is where customer-centricity can inspire strategic growth into new opportunity areas. Download frog’s Business Value of Customer Experience to find out why improved CapEx efficiency is a key CX metric, alongside expanded customer networks and extended Customer Lifetime Value.
Want to learn more about how to learn from moments of crisis to thrive in your business? At frog, we use a practice called ‘futurecasting’ to help clients map emerging market trends and technologies in their industries, developing scenarios that inform more robust and future-proof strategies. Get in touch to find out more.