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[00:00:09]

It's the twenty seventh of August, and you're listening to your Time, a podcast series on markets and economies from DBS Group research team with bank chief economist. Welcome to our twenty sixth episode of today's podcast is about consumer behavior through this pandemic, both in the developed and emerging markets, the unprecedented lockdown measures and various policy responses have led to many developments and unintended consequences. Worldwide, consumer trends have accelerated and some new trends have emerged. You can see some of that reflected in equity market performance over the past six months with the travel, tourism, energy and transportation sector selling off while e commerce, cloud computing, communications, medicine and medical supplies and of course, retail delivery doing very well to get a better sense of how differently people are living, buying and thinking and how companies are adjusting to those changes.

[00:01:06]

We have with us today, Sonia Gupta, managing director of growth and innovation Accenture Growth Markets. In her role as managing director, Sonia worked closely with the C Suite and boards of companies to frame design and deliver strategic transformation and innovation projects. Sonia specialises in the areas of business model, innovation, corporate strategy and leadership. She has been with Accenture since 2009, prior to which she held various roles in IBM Global Business Services and PricewaterhouseCoopers. Sonia, welcome to Capital Kind Stemler.

[00:01:42]

Delighted to be here and look forward to a great conversation. I'm looking forward to this as well. Let's start with some very basic things. Tell us about Accenture and also, although I have already read your job description, please give us a sense of what you do there. Super Typhoon Stemler, so Accenture is a leading global professional services company, and we provide a range of services from strategy consulting interactive through to technology and operations. We have five hundred thirteen thousand people serving our clients across 120 countries, but perhaps three fun facts that most people don't know about us.

[00:02:20]

The first we have been awarded for the fifth consecutive year as the world's largest digital agency. Most people don't know this about us. We have about 10 billion dollars of our revenue in on the digital agency side. Second, in fact, we have more than seven thousand four hundred patents and patents pending in our name in a range of things from analytics to quantum computing. And the third is we have about one hundred innovation centers across the globe that span everything from cyber fusion and security through to design and so on.

[00:02:53]

And then the second part of your question a little bit about me, so I'm Sonia Gupta and managing director for growth and innovation at Accenture, which means I have the exciting privilege of working with our clients and leadership teams to help them reimagine and navigate this world full of uncertainty and use innovation as a way to drive growth. That is fantastic. And I'm really glad you got to say a few things about Accenture, because the scale of the companies is extraordinary.

[00:03:20]

And I think most people actually appreciate how large you are, both in the regular space and the digital space. So, yeah, you guys have been on top of this whole pandemic and how that's affecting our Day-To-Day behavior. And you're also advising companies to strategize around that. And I've been reading about all these large scale multi country surveys you and your colleagues have done. So perhaps we will begin by talking about some of these surveys and their findings. So take your time and explain to us and some degree of detail about how consumers preferences and habits are being disrupted or even reinforced by this pandemic.

[00:04:02]

Indeed, I think what I find most exciting about the study that I'm going to share with you is all of us, both both of us in this room, but also people who are listening to this. We're all consumers first. And there is always something in the conversation but about to have that you can engage with. So let me start with what the study was about. We studied roughly eight thousand eight hundred consumers in eight waves every two weeks from the 19th of March to through the last session, which ended in July across 23 markets.

[00:04:37]

We change some of the markets as we went through just to make sure we were spanning North America, Europe, Latin America and most of Asia. And these countries included Australia, Brazil, Canada through to Japan, India, Indonesia, all the way through to the UK and the US. What we set out to study and answer were really questions in five key areas. The first was who is this new consumer and what are we seeing in terms of four different areas?

[00:05:06]

I think the first is what are people buying and how are they buying, given their mindsets, mindsets and purchasing attitudes on the back of what covid has triggered? The second is, how are they living? What's happening to the family as a unit? How are they spending time at home and in other places? The next one is really about trust in institutions, government, public and private sector, as well as the social sector, and the very last was really around new ways of working that we see.

[00:05:38]

What I'll do is I'll walk through each of these in time and as we go through, would love to hear, you know, your reactions on what you find surprising and what we'd like to share more about. Sounds good. Looks OK. So let's talk a little bit about the future consumer. When we stopped at the study, you can imagine we almost saw three different patterns, right? The first was really the consumer in crisis. So when the when Corvette broke across markets and if you recall, we started twenty three different markets.

[00:06:06]

Some of them were advancing stages. Some are stabilizing. And as we see the different phases come in, you obviously see different reactions. But the first was really a consumer in crisis. The second was then the adjusting consumer that was adapting, making making up their minds about the sort of choices they want to make. And now with what we're focused on and I think the purpose of today's conversation as well is to really start to make sense of what are some lasting behaviors more because some of them were reactions.

[00:06:33]

Right, to products and services being made available in certain ways. But it was also about how you were thinking about the pandemic versus now we're able to see a few patterns that tell us what's likely to be here for the longer term, as expressed by both consumers, but also the purchasing categories and the movements. So that's really a little bit about the future consumer. So let me talk to you about some of the consumer types that we're seeing emerge.

[00:06:56]

At the simplest level, if you think about consumers in terms of time and money. We saw a set of consumers that were financially pressed and squeezed, but they had the time. And as you worked through a two by two off time and money of consumers that either have both time and money and had been largely unchanged or their, you know, their both their time and money environment have not changed. You see certain mindsets and behaviors versus others that have been adversely impacted, both in terms of time and money.

[00:07:32]

Right. So let me call out a few terms for some of these different segments and the types of things that are occupying their mind. The first is really a category of consumers that we're calling on the edge that 20 percent of the consumer base, the extremely worried about health, finances and going out in public. And they're being very conscious about how they're spending money. They're looking at new sources of income and they're the least comfortable visiting places in the public places in the next six months.

[00:08:02]

You have another category then that we're calling the tentative return. And the way I would express their acourt that kind of captures this consumer is hopefully everyone will re-enter and reopen the community slowly and responsibly, but cautiously integrating back into society and trying to create normal routines to avoid non trusted or nonessential spaces. I will then draw your attention to a couple of other segments on the other side of the spectrum. You have twenty eight percent of the people who are stubbornly seeking normal.

[00:08:36]

They're hawking after return to the way things were. And there's a sense of restlessness about it is about time for us to be able to go out. And then you see the YOLO segment, which is they're living for the moment to make up for what was lost. So when you look at some of the behaviors around, you know, the the Louis Vuitton shop in Gongaware, which had the highest record spending in one day versus what we had over six months, it was really the YOLO consumer that was neither affected, both in terms of time and money, and was looking to make up for lost time.

[00:09:13]

This is really interesting, Sonia, I just want to add one thing, because we have been doing some work on this income angle that you started this discussion with. We have lots of people with deposits and deeds. And last week, our team published a set of findings looking at one point two million customers salary accounts in which we found not that different from your finding, about three hundred thousand workers or about a third of that people are twenty five percent of the people we looked at who have seen substantial decline in their salaries between the post-Soviet time and peak over times.

[00:09:48]

And also we saw that in the middle age. So the thirty five to forty four age are the people who have seen the most decline in their salaries. And the second point that you pointed out, and I think China, because it's sort of ahead of the curve and everybody else, that we have better insight, this notion of a big pickup in sales as soon as lockdown eased. But, Sonia, we have also seen that spurt dissipate pretty quickly.

[00:10:15]

So long lines, day one, day two. But then by the time of day 20 comes, it just goes back. It's not really going back to the pre pandemic levels. It's somewhere. Absolutely. And, you know, if I could just pick up on that right there, you know, persisting financial fears are leading consumers to really prioritize their basic needs. And what we're finding is, especially if we look to contrast March versus July and we look at the types of teams that were occupying consumer minds from personal health, health of friends and family, food and medicine, security.

[00:10:46]

The one aspect that's had the biggest change in terms of mindspace is financial security. We're seeing a thirty eight percentage point difference between how people were using viewing financial security as a current priority in March versus in the next three to six months kind of outlook going forward from July. So very real concerns. And this is across advancing and stabilizing markets where we're seeing consumers taking a very somber look at their own spending, being quite thoughtful about what's essential versus nonessential.

[00:11:23]

And also, you know, the pendulum swings between stabilizing and deteriorating because in some cases we have seen resurgence of the virus. So you may have been getting a bit optimistic when the first phase of the pandemic came to an end. You're getting happy and then the virus came back up, logged ones came back on. And that probably is as damaging, but more damaging than the first round of downward revision of people's expectations and confidence. Absolutely. Absolutely.

[00:11:53]

I mean, it's really interesting as people think about essential versus nonessential spend and you think about what gives people comfort about going out to busy spaces, even in stabilizing markets. And I'll give you the range, right. From bars, clubs, sporting events, public transport all the way through to a friend or relative's house through to grocery or pharmacy. You can see the level of discomfort in anything that's, you know, large, close proximity of people in a small space.

[00:12:24]

There's enormous discomfort. So anything from a public transport sporting event or bar or club rated upwards of 50, 50 percent of the people saying we're very uncomfortable over the next six months and we're going to be quite cautious. Right. Versus as you move further down in terms of the essentials, you know, grocery, pharmacy, drive ins or being at a friend or relative's home or your own home. Those were obviously rated actually the highest in terms of comfort of visiting and spending time.

[00:12:57]

Yeah, I mean, I don't know about you, Sonya, but in my personal behavior, I reflected exactly that thing, that the moment the lockdown's is you know, I visited my sister's place. We had friends over. But as far as, you know, go to bars and clubs, well, they're not particularly open and a great year anyway. But are events, public events, auto questions for the time being?

[00:13:16]

And what was interesting was we asked a very pointed question around the initiatives Fenby establishments and others are taking buses. What actually is material in a consumer's mind that makes them comfortable about visiting a space? And there were some very important, I think, messages. It may seem like a blinding glimpse of the obvious in retrospect, but, you know, things like staggered hours, you know, limiting people, etc. was one thing. But visual markers, you know, people wearing masks, whether you're doing a temperature check, the optics of how you doin, an establishment leaves out seats.

[00:13:56]

You know, these were actually really important to consumers. And that was very strong word of mouth when people went in and saw the hygiene levels or the proactive nature in which Efendi establishments were interacting that allowed them to give them the comfort.

[00:14:11]

Do you have any insight into whether people are impressed or comforted by the responses at the FNB level versus schools versus place of work? I mean, are people looking at these things differently? So interesting than what I'll break up your question into two parts. The other. First, I'll give you a bit of the response by establishments, which I think is really quite clever. So, Ultima, which means, would you like to eat in China? As you know, Aloma and Meat won.

[00:14:42]

The two big food delivery companies in China have actually created reassurance slips. So when I deliver food at home, you get a slip that actually gives you a certification of who packed your food, who cooked it, what were the temperature checks, and they put in sensors. So they actually monitoring the temperature of the workers that are actually cooking your food, packing it and delivering it at night. So that kind of reassurance guarantee that Fenby establishments are proactively taking on board is really helpful.

[00:15:12]

Right. The second kind of response that we're seeing, which I again, I think consumers are appreciative of, is there's a company called Restaurant that's actually created a an app which allowed a range of FNB establishments overnight to pretty much move from physical menus to an all on your phone mechanism to order while you're in in the restaurant, but all the way through to payment. Right. So they do need to create it. I mean, I love human ingenuity at such times and really the opportunities that people are taking.

[00:15:50]

So that's on the FNB side. If I then answer your question in terms of trust in institutions and what's happened, they're very mixed and on the most for the most part, you know, all organisations have not paid very well. So if I go into super industry banking, if I go to employees responding in terms of how their employers have done so roughly in the 50 percent range, just in terms of dissatisfaction and the trend and pattern continues and they will put a range of different reasons.

[00:16:22]

So for the first, if I go one by one, when people were ordering groceries, if you remember at the height of the lockdown in many markets, many promises were made. But but very few of them were kept in terms of deliveries on time, like people were staying up at midnight to click away to try and load their shopping cart. Right. So a lot of broken promises and they were very unhappy. The second and we should spend some time on this later in the conversation perhaps is just a very strong rise in consumer opinion about organizations and governments doing the right thing and not because you're being monitored or policed, but, you know, in times of crisis, they expect a whole lot more.

[00:17:03]

And the way you've conducted yourself in the last four to six months has either been very beneficial to your brand or has been very damaging. Right. So does that help? So you asked about employers and establishments. Absolutely. And the various things that you talk about in terms of, you know, clever companies trying to convince people that, you know, their practice of hygiene can be established by looking at all these quantitative markers about how they check the food and how safe the food is.

[00:17:38]

Very smart. How lasting are these? So we can sort of look at the last three, four months of data and say, all right, a lot of things have changed dramatically. We are spending more time at home. We are consuming more e commerce. But what's your sense of the lasting nature of these things? Which changes are going to be profound and lasting and which changes you think are going to be transitory? So question a number to call these out into Onya.

[00:18:07]

So let me talk about the first one which is really staying in is the new going out right to the home at the heart of everything. It is real. It's an opportunity that's been trending upwards. If you look at all of the social listening that we do around people getting creative about doing more and more at home, both from E entertainment, relationship, connection perspective, but also in terms of working from home, the home at the heart of is absolutely a lasting behavior.

[00:18:36]

And let me call out a couple of responses by companies as well and the kinds of opportunities it has presented. Right. So if you look at Brazil, General Mills has a brand called Uki, which actually created a whole set of free kits containing popular foods in Sao Paulo to help people celebrate. The Fiesta's joining us. Right. So it's a big festival for them. Under normal circumstances, obviously, it would look very different. But what General Mills did was they created a party calculator where you could go in and see how many people were you looking to host at home?

[00:19:10]

What were the different treats you needed, as well as fun things like how could you celebrate? Right. It was an all in kit. So this is one of one sort of example. I think the other example, and I don't know whether you tried cutting your hair at home, but, you know, there is this whole rise of going through at home. So there were a range of services you looked at specialist to go and do. Now, here's where your important question about lasting behaviors comes in, right?

[00:19:39]

Some of these you do it out of necessity, cutting hair. That was a bad experience for most of us. So that's not something that's a lasting behavior. But for some of the other things, you know, I think we're seeing the rise of hobbyists, this whole creation with your hands, Art, you know, different things that people would have liked to do in their spare time, that since they're spending more time at home, they're able to kind of do this as a collective.

[00:20:08]

OK, but, for example, this notion that, you know, we are fairly comfortable working out of home and that, you know, we are building as you are, to paraphrase you, that, you know, home at the heart of everything, isn't this variable across one's family structure and income level if you are poor? I don't think working out of home is that comfortable because, you know, you probably don't have a home office. And if you are single or your family with no kids is hanging out at home as much fun and rewarding as it is for me or you, for example, who have young kids.

[00:20:44]

And we're appreciating the fact that we can spend more time with our kids. Great question. You're right. It is nuanced. But let me give you the headlines first and then talk about some of the nuances you've raised, which really required a lot of corporate attention. So the thing that we're seeing is the demand to work from home in the future continues to rise. You know, 73 percent of the people actually enjoy the experience. And thirty five percent of all employees plan to work from home at least once a week in the future, with one in five planning to work from home more than three times a week.

[00:21:17]

OK, so a very strong trend, and I will give you a couple of examples right here from the employee and yes, the many things that aren't perfect and we talk about them being done from a corporate perspective. A lot of clients that we have worked with that had very strong in office cultures have now recognized the upside of collaborative behaviors and virtual working while recognizing that there are obviously some conditions under which it's not as optimal. For example, they are looking to build completely new business.

[00:21:50]

You're looking to forge and acquire customers for the first time. Trying to build trust remotely is obviously hard, trying to get new distributor teams to collaborate when they've never interacted or worked before and you don't have a remote working muscle is obviously taking time. But that said, the the fact that you're not commuting anymore, the fact that, you know, there are some positives both on the employee side and on the corporate side, which frankly, they had not acknowledged before.

[00:22:20]

And I'm talking about some of the organizations that we work with which did not have as strong a digital muscle and remote working also on the some of the nuances you raised out. The first is it is very intense, Stemler, and we've got a number of courts across countries. And it's exactly the kind of, you know, emotion that you were referring to where it is uncomfortable, you feel locked in and you don't feel as productive. There are a lot of mental health issues as well because you lack the social engagement and the downtime you feel like you're always on.

[00:22:57]

And these are very real set of conversations we're also having at Accenture as as is true for a lot of our clients who are proactively moving on the mental wellness front and making some very specific initiatives to make sure that, you know, people disengage at the right time. They are able to tap into hotlines to actually talk about how they're feeling and to proactively equip both leaders and employees with channels to be able to take action.

[00:23:26]

Right. So the reason I ask you this is because some of your surveys have very striking results. So there was this one survey I think was done by the Consumer Research Group at Accenture. And you guys surveyed people in March, then again in May. And in both times, a very large number of people, like two thirds of the people, said that they had the right tools to be able to work from home. But that doesn't mean that they all said that they were productive from home or even half of them said, you know, they're productive, more productive at home than in the office.

[00:23:53]

So, yes, I think we've been surprised that companies that use to sort of resist people working from home, they turns out the technology works and people do have the tools to work from home. But that doesn't mean that they want to stay at home all the time and they are going to be productive equally or more by staying at home. So I think that when you talk about earlier, talked about earlier, that people want to go back to work, but at the same time, they probably have seen the light that they don't have to go back to work five days a week.

[00:24:21]

Maybe a hybrid future lies ahead where we are comfortable working out of home and happy to go to the office. Time to time and time to read to a cool new catch phrase. It's called Sweat Working. So unlike networking, this is where you can regroup with your friends and colleagues at work and you actually do a workout. So you're doing chair yoga or whatever else. But, you know, it's the equivalent of getting a coffee in the pantry, but you just can't do it.

[00:24:50]

So, you know, what's the next best thing while staying healthy?

[00:24:54]

Sure. I've been doing virtual lunches with my team. So we get people in Hong Kong, Bangalore and Singapore to get together at the same time. Unfortunately, because of the time difference, the India team has to have breakfast where we go. But but but, you know, a workout together might be a good idea for my Singapore team. I'll I'll keep that in mind. It's only a couple of other things. Before this pandemic hit us, we felt that, you know, around the world and it's from our perspective and DBS and I know Accenture is also very well involved with this, is that we felt that the tide had turned, the world was becoming more and more conscious about the perils of climate change and moving on with initiatives to decarbonise our world.

[00:25:36]

Do you feel and looking at your survey results that people have sort of given up on this issue for the time being, they're so worried about livelihood and physical health that climate change can wait or people who have actually become really energized and sort of appreciate how interconnected and fragile and vulnerable we are, that they have not forsaken climate change as an imperative. So thank you for raising this, and I was hoping to, you know, one of the lasting behaviors that we're starting to see some fairly strong evidence of is.

[00:26:08]

Trust is being given carefully to institutions that are purpose driven. The second thing that I will call out is living for local. So this increase of purchases of local brands versus global brands and the rise of the authenticity economy. Right. So it is about yeah, it is really about, you know, saving the neighborhood store. We're seeing a combination of consumer activism around it, but also governments recognizing that as they're digitizing businesses, it's very important to create the right kind of impetus to allow the local organizations to compete and actually creating the digital tools that allow them.

[00:26:47]

I'll give you an example. Right. In Singapore, you had Facebook live auctions for tecum. All right. So you had a number of wholesale fresh foods organizations that just really struggled right through this period versus others that already had digital platforms. And there was also the government providing this push along with consumer activation, about saving our weight markets, correct? Right. The other thing I want to see is, you know, we're in lots of conversations around being a responsible business, both as Accenture, but also all the clients we work with.

[00:27:18]

And what we're finding is some really serious reflection by the leadership with the leadership teams we're working with. And on a number of fronts, I want to define, you know, some of the sustainability sort of label that we put with with a little more sort of detail in adding a little more detail, if I might. So the first is what I will call origin track and trace authenticity. Right. So knowing where you're sourcing form, are you sourcing locally?

[00:27:50]

And Amazon actually created an entire segment, a label which actually told you, you know, any product that you're buying, which state is actually from. Right. And this is for America. But we're seeing very similar demands globally by consumers actually saying tell me where this product is from because I want to support my local entrepreneurs. Right. The second thing is really what you alluded to, which is how green is your supply chain to the carbon footprint.

[00:28:19]

You know, how are you actually going about it in addition to your product portfolio? So the oil and gas companies, the rise of renewables and so on. So it's not just one thing, right? It's a number of different elements of pillars of that whole sustainability chain that consumers are asking for more from sort of the organizations interact with. Very interesting, so I want to talk about the other side of the coin, which is how companies are reacting and adapting, but before that, I want to touch on two issues.

[00:28:50]

One is the role of the government as crisis has sort of reinforced the government's role in our lives. Like, you know, it hasn't been in a very, very long time. But when you survey consumers across markets, are people trusting governments the same? So we know that in China, regardless of what the rest of the world sort of sees in the media, the trust levels are high. And as a result, the government of China has managed to implement fairly intrusive tracking measures and facial recognition software to see if their body temperature is high or not.

[00:29:27]

That sort of stuff has gone very well with respect to implementation, but surely that is not the case across everywhere. Yes, and spot on them. I think a lot of that was reflected when the pandemic broke, exactly as you said, as they were looking to put in place tracking mechanisms, the trust in government came out loud and clear because a lot of them tried to put in place apps that allowed consumers to volunteer information or for a way for them to track.

[00:29:54]

And you can see the uptake has been very, very dry, depending on the the government's sort of trust levels with the trust quotient that consumers had with them. I think what's interesting then, what is the mix of what the private sector has also done? And it's the combination of the private sector, the social sector and the government. And you see in certain markets where you see consumers actually playing the role of governments, using consumer activism, making sure the neighborhood stories are like, you know, some of these other things where in other markets the government has proactively taking a stance, provided subsidies and so on.

[00:30:30]

Right. Also trust in government in terms of health and their ability to provide the infrastructure. You see very varied actions in terms of quarantining at home versus relying on government infrastructure, as well as medical subsidies to be able to see people through. Right. Right. And we've also seen in Asia, I mean, not just China, but even like Taiwan and Korea, the contact tracing apps being adopted widely. Not that, you know, they have had a slam dunk.

[00:31:01]

In the case of Korea, we have seen a resurgence in infection. But I still think that the trust level remains pretty high and the use of technology to track possible transmission of the infection remains pretty successful. And therefore, I think we still have fairly high level of confidence that the Koreans will be able to take care of the recent resurgence pretty well. But think about a country like Brazil where the government itself has expressed a great deal of skepticism about covid-19 trust levels have been low.

[00:31:34]

And in any case and any sort of government initiative has also met with a lot of resistance. All right. That's the government. Now, your client universe, which is the companies of the world, how are they standing up? And of course, this is a very broad question. So I think you're going to help us navigate sectors by sector or even across geographies, how they're being perceived and how they're meeting these challenges. OK, so let me kind of take you back to trend and then some of the responses, because that might be helpful way to see why the response rate from organizations.

[00:32:08]

So the first one I'll contact is really help. Right. The consumer obsession with health and safeguarding immunity has led to many sort of spaces. You know, everything from boost my immunity, quantifying Quantified Knee, which is quantifying my physical and mental well-being. Integrated virtual care or self care is a big. So telehealth, we're seeing a lot more comfort by consumers and actually engaging with telehealth. And this whole focus on health has meant organizations, regardless of what sector they operate in.

[00:32:51]

So if you're a consumer goods company, you're a bank, you're a platform player like crab or you're somebody else. Every business is a health business and you might kind of take a leap into reimagining your product portfolio. So we have a number of organizations we're working with in food and beverages all the way through to actually home home care, where we are proactively thinking about where is the health element and not just as a communication device, but really reimagining health at the heart of.

[00:33:23]

Right. So that's the first you will see a range of different banks such as the Health said. I want to go a little deeper up to what exactly is telehealth. I mean, if you want your teeth to be examined, you still have to go to the doctor. If you want to have a proper physical examination, you still have to do it physically. So other than picking up the phone and having some chit chat with the doctor, what else is happening in the world of telehealth?

[00:33:52]

So a few different things that I think people have been you know, they've been, what should I say, experimenting with a range of telehealth apps. Right. So we've always had a number of start ups in the space in the US. The Veterans Administration, which looks after all of the Army veterans, has also got a model in place pre covid versus post covid. There is an a real rise and acceleration off a couple of things. The first is with lockdown and particularly vulnerable aging segments of the population.

[00:34:26]

You didn't want them out in a hospital, right. It was much easier for you to do a tele consultation with a doctor for a few different things. So if you have a chronic condition, you know, you're diabetic or hypertensive, etc., and you've developed a new sort of health episode, you wanted to do the consultation at home with your caregiver to make sure versus taking your aged parent in to a hospital environment where they could contract something else.

[00:34:53]

Right. So the first was a relaxation. I think the second thing we've seen is actually governments revisiting policy on telehealth in the past. Your medical reimbursements were not you know, you could not actually reimburse telehealth because it was not viewed as the same. And like I said, even consumers felt that somehow a telehealth consultation was not the same as an in-person visit. But what we're finding is actually a lot more comfort on the consumer side. We're seeing that on the technology side, there were already a number of things that were already well in place.

[00:35:27]

It was more the demand hurdle as well as the reimbursement hurdle. And as both have kind of settled in. And it's not just that episode of you, you know, just doing the one on one consultation. What we're seeing as really the future Lauderhill is really an integrated model of what we're calling virtual care, which includes both the combination of the physical and the virtual and multimodal communication. Right. Especially for chronic conditions. Right. It allows you to proactively communicate your readings with the doctor in a digital fashion exceptionals that allow you to then trigger a virtual sort of telehealth call versus then using the physical engagement with the doctor in a very thoughtful, considered way versus that being the default.

[00:36:15]

Fascinating. Absolutely fascinating. OK, got it. OK. OK, so we spoke about health at the heart of everything, and you know what we're seeing organizations do. We've spoken a little bit about the home and what people are doing. I want to talk to you a little bit about, you know, I've had a number of conversations with investment managers, fund managers and a few interesting observations that I'd like to play back. So as they imagine their real estate portfolio and the companies they've invested in commercial buildings, but also residential.

[00:36:51]

And you look at the World Designer Guild and what architects are also calling out in terms of buildings of the future, there are some very real conversations that people are having around how much commercial real estate space do you really need if companies are also going to operate in this hybrid model of people working from home versus at in a physical space in the office? Right. So does that mean shrinking of commercial real estate as we know it? The second thing is really the operational aspects of when you in a building and if you have to reimagine how that happens today, what would change?

[00:37:26]

So if you look at second square mile in Bangkok and as we've seen in a couple of other places, this whole contactless, touchless experience. Right. So you have foot pedals that operate elevators, you know, trying to minimize any shared surfaces. You've seen the use of UV sanitizing robots and joins the Gräßle in the US. So you're not really reimagining even how consumers will navigate these spaces, both in commercial buildings as well as residential. This is fascinating, but are you.

[00:38:02]

Is it too early to call this a trend? I mean, after the SARS crisis, we didn't see massive changes in trend as far as commercial real estate was concerned. But perhaps this is a more contagious, contagious disease and we're going to be more reserved about contacts going forward. And also, it's a global phenomenon as opposed to SARS, which was just in Asia, largely speaking. But you think that already the changes are profound and are in motion.

[00:38:30]

So I think, as you rightly said, I was in Hong Kong when SARS happened. And I remember for almost six, eight months after that, masks were everywhere. Right. I don't think masks didn't go away for a long time after SARS in Hong Kong. But admittedly, as you rightly said, you know, this is a global phenomenon. It is early days. But I think if I think about the conversations we are having with real estate companies as well, they are mulling over what needs to change.

[00:38:55]

Right. As they work in this hybrid model. And I think some of the conversations we're having on the other side, right. If I look at retailers, we were talking to a large retailer in Asia and, you know, playing out scenarios, you know, both advancing and stabilizing models of what would happen and what it meant for demand, as well as their physical real estate space. And they operate across lifestyle, grocery and so on. And in the first instance, if they had 100 stores, they were going to immediately shrink that to 50 to start with and re sort of allocate investment into digitizing in an accelerated fashion that omnichannel commerce model, reimagining their e distribution.

[00:39:37]

And we're talking about speed to market at a level that they hadn't done before. Right. So all investment resources, people and capability that we were helping with is ready for them to help operate with a 50 percent physical footprint for the next six to 12 months. And as we hit closer to the 12 month mark, going back only up to 70 percent. But this is one retailer, but remembering they have a footprint across lifestyle, grocery and fashion.

[00:40:07]

Right, but Sonia, the way I think about the sort of the gig economy, the way it was evolving before the pandemic, that we were getting used to sharing lots of things, Uber and ride sharing or Airbnb and, you know, living in somebody's apartment or we were working in shared spaces. Are these things going to go away? Or these companies are intrepid enough and they're already rethinking and reimagining all the assets that they have and how to deploy them in this post pandemic world.

[00:40:40]

A few mixed things, Deanwood, and I'll call them out one by one, you know, the auto sector in China, as you know, has always been heralded as very large and was growing massively out of the sharing economy came through and we saw some dampening off sales. But on the back of covid for a few months, we started to see, you know, automotive sales slowly in pockets because of the reservations, you know, of covid and shedding public spaces.

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But like you said, you know, China has been ahead of the curve. They've tried a number of different things and auto sales to have somewhat of a muted response rate. Even the latest reports seem to suggest that. At the moment, if you think about the transport company operators, I think they are trying quite hard to make sure their spaces are safe. I think what would be interesting is to see the, you know, the carpool models, not enough comfort.

[00:41:41]

We are a couple of calls, but again, this is across 20, 20 free markets. Like I say, it's not enough to kind of make a very definitive statement. But I think public spaces as a whole muted response for the next six months. Right. That's what we're hearing from most consumers. I sometimes wonder, you know, on the office space issue, everybody saying that companies will reduce their footprint in commercial real estate space, but would it be 50 percent or 25 percent or even less so, especially since, as we discussed earlier, people do come to work, want to come to work type of time.

[00:42:16]

There is value about that. And also the previous work arrangements of hot desking, an open plan will have to be revised and there will be many more socially decent spaces which will, of course, force the companies to increase their footprint. So NetNet, is it clear or is it, again, early days to figure out that there's going to be a big exodus or big, big swing down off of this real estate company by company?

[00:42:41]

Yeah, I think that what it is early days. And I think the more important thing is to watch the experiments exactly like you said, by everyone's experimenting with a different model. And it has a lot to do with I think a lot of the clients we're talking to is there's a lot of conversation around where missing the creativity that comes from just having our employees in a shared space, like the water watercooler conversations that lead to better collaboration and so on.

[00:43:05]

So I think, as you rightly said, you know, the net effect of trying to do socially distance models versus hot desking versus a few days a week. Right. As you start to model the different options, we're going to have to really watch. And it's so market specific is that they were right. I was absolutely I was quite taken aback when I heard that there were all these Silicon Valley companies who have told their staff they don't have to come back to square one, whereas in the past, Silicon Valley was supposed to be a place where, you know, lots of smart, like minded people met each other about coffee shops and went for walks and picked up each other synergies.

[00:43:39]

But how will that be accomplished? Nobody's coming to work till the summer of twenty, twenty one. So we may have moved a bit too hastily on some of these measures and there might be some rethinking required. Sonia. The other issue with respect to companies is, you know, I began the discussion by saying that, you know, there are divergent outcomes. So if you are in the e-commerce, cloud computing, online delivery space, things are great.

[00:44:04]

If you're in travel and tourism on the big box retail, it's been a tough slog. What's your sense? I mean, will this divergence continue? Are you seeing some companies being very clever and others are not catching up on the trend? And would that then lead to some serious consolidation going forward? So, Tamara, thanks for raising this, because we didn't talk enough really about e-commerce. Lots of bombastic headlines and actually a lot of truth as you look at the data, which is we've seen more progress than 10 weeks of just the acceleration and adoption of e-commerce versus, you know, 10 years, the 10 years that preceded.

[00:44:42]

But let me just kind of, again, draw out some of the detail. I sort a few nuances in terms of the consumer purchase side and then specifically, you know, the companies that are benefiting and what are they doing and getting right. So the first is I don't want to spend some time on the consumer side. So people are shopping fewer but bigger baskets. If I forget something, I'm not trying necessarily to go make it up in the physical store I'm choosing to live without.

[00:45:08]

So your ability to catch my attention when I'm online proactively understand me. Analytics, personalize the experience, trying to automate my basket. All of these things are really going to be very, very big differentiators in the future. Right. And I am always wary of talking to an economist and telling him that this time it's different. But I will say that I do think some things are different this time. And please don't hold me. I know there's going to be out there and I'll have to live with the statement forever.

[00:45:37]

But there are four things that are different this time with e-commerce. The first is demand has shifted out of necessity. And I'll contrast this with the study we done seven years ago on fresh food and the potential of fresh food online. And there were many conditions for fresh food to be online because consumers wanted to touch and feel to families using Apple in a salad bowl. Since I was using it in a crumble, I knew what I was shopping for.

[00:46:03]

So fresh foods were very difficult for someone else to pick and back for me. Right. But fresh foods have gone online, partly out of necessity. So the demand side and I just called out fresh food as an example. But from food to alcohol to prescription to personal care, home decor, DIY apparel, you name it. Right. Everything has seen an accelerated uptake online. So on the demand side, that's very clear. On the supply side, you know, organizations through a bit of experimentation, having got it wrong sometimes with broken promises, but have really stood.

[00:46:37]

And because of technological progress, we are able to actually stand up platforms, capabilities, payment mechanisms to be far better. So the supply side is also that I think the third thing is really complements and the digitization agenda. And like I said, the twenty three markets we studied, all of them had some form of it, but really helping the small. And allowing them to compete through policy subsidies, creating shared service models that allow them to go online and save the neighborhood store type models have allowed the shift to e-commerce to be real.

[00:47:11]

And the last one is payments like payment mechanisms have overnight digitized and we have brought on board an entire segment of the population that would be otherwise. So this e-commerce thing is here, Andrea. And as you rightly said, I think logistics companies that have been able to create a network and an ecosystem to plug into all kinds of categories have benefited. I think the marketplaces that have been quick to cross-sell up, sell across baskets and personalize using analytics have benefited quite dramatically, actually.

[00:47:47]

But this is an absolutely critical matter for us dealing with this pandemic. Sonia, I mean, as we know, there has been this big digital divide between rich countries and poor countries and even within each country from those who are well-off and have access to Internet services and those who do not. And if you have to provide subsidies to people, if you have to provide information to people, using the digital channels seems to be the default. And and how those who don't have connectivity, who don't have the resources, how they become included in these initiatives is a very critical issue.

[00:48:20]

And you know what? I say these things I'm not just talking about developing countries in Asia versus the West. Even in America, there are many cities with very poor connectivity. And and I feel sort of left out by the march of the digital economy, which is one of the reasons the paycheck protection program, as well as a various support mechanism the Fed came up with. One big question was how will it be administered equitably across the society? Because when you look at the minorities, when you look at the poor, for them to access those things are harder.

[00:48:51]

So I read somewhere that some of the big tech companies like Google have proactively gone ahead and started placing large deposit. You know, like 10 million dollars is nothing for Google, but for a community bank, it's massive. And once Google places the ten million dollars in the bank, that bank's ability to generate credit opportunities and loans for those downtrodden people changes dramatically. And and so it sort of began as sort of a public sector initiative. And now we're seeing companies helping each other out, which is also remarkable.

[00:49:25]

Sorry. Go ahead. Sure. And just on that, actually, actually, it's a really important point as we go through this digital divide is real. And like you said, this is not a developing developed country issue, not in the traditional way. We've looked at it. We've been doing some work with the WFF. And as you know, half of the world's population has no access to the Internet. You're right. The digital divide is real.

[00:49:46]

And a lot of the conversations we're having with clients is really about how do you bring along this analog consumer as well. The one other aspect that we didn't talk enough about, what was you know, it's not just consumption, it's also access to services. So if you think about what we did and suddenly we were doing schools online, you know, working from home, there were a lot of calls that we needed to make to either troubleshoot, you know, digital devices or others.

[00:50:13]

And a lot of the customer hotlines you could no longer drop in. Right. You have to use a digital self-service mechanism to even solve that. Right. And that led to organizations actually recognizing the huge gap they have to be able to serve customers with. So it's not that straightforward, regardless of the market or the country that you're in. Absolutely. So, yeah, we are paid to think about these issues, but clearly we have not solved these issues.

[00:50:44]

So why don't you help us become a bit humble by telling us the big open question answering which will, of course, you know, make or break our crisis recovery. So what are the things that you are worried about or feel that, you know, the corporate sector, the consumers have not fully come to terms with yet? They did Question Time, but maybe I'll start with the very first topic that we kind of explored, I think. Purpose and your purpose and trust is really the cornerstone of any business, I think being very thoughtful about who you are, what you stand for, and in everything that you do, you know how you interact with your customers.

[00:51:33]

I think being very clear as leadership teams, but also in your execution about how you are engendering trust, fostering trust both with the community and the consumer, but also using your role as an industry actor, working with the government to actually further the development of the communities you are in by doing good is good business. And how you doing that? Proactively. I think that's the first being quite thoughtful about that. I think the second is, no matter whether you're a banker or just a player or a telecom company being quite thoughtful about this new consumer and the lasting behaviors and thinking quite carefully about what are the new opportunities it presents and what are some assumptions we are making about our business that actually require us to take pause and challenge them.

[00:52:21]

It's not easy to do because your business model, your operating model, your people have all been designed to operate in a world that looked quite different. So as you think about this new consumer and you think about the opportunities and challenges it presents, how are you creating an organization that can adapt and reinvent, you know, with all of the uncertainty ahead of us? So thinking it through in a very data driven way? Because even then, as you ask all these questions, right, do we know with certainty is it going to be X is going to be Y?

[00:52:54]

Many of these questions are unknown and they're changing so quickly that you need an organization that allows you to respond in the same sort of speed, if you will. Absolutely.

[00:53:06]

And also, I think this is a big test for both humanity of a company's management as well as the sense of purpose, as you correctly said, because at a time when it's tough and there's a lot of uncertainty and unanswerable questions ahead, I think the easy thing to do is hunker down and consolidate and get rid of lots of people and protect your balance sheet. Whereas I think historically we have seen that companies who turn very conservative during bad times are the ones that are slow to get off the base, if you will, when the recovery comes.

[00:53:41]

Whereas the ones who have remained brave and loyal to their staff and have shown that they have a vision for the role of the company in the community that they live in, they tend to be far more successful down the road in the long term. So one hope is that this crisis will reduce some of the short termism that have become embedded in a lot of corporate behavior and focus as to or forced us to look at the bigger picture. Sonia, a great chat, learned a lot from you.

[00:54:10]

Thank you so much for your time and insights.

[00:54:13]

Thank you for your time. What has been a great discussion? You can be a lot of food for thought too. So thank you and thanks also to our listeners. Kobie Time was produced by Martin Tucky. It is for information only and does not represent any trade recommendations. All twenty six episodes of Copy Time are now available on YouTube and on all major podcast platforms, including Apple, Google and Spotify. As for our research publications, webinars and live streams, you can find them all by Googling DHBs Research Library.

[00:54:44]

Have a great day.