COVID-19 is having a massive effect on the world, and beyond concerns about and care for their families, friends, and employees, SAP customers urgently need to address its impact on their businesses, ecosystem, and customers, including:
▪ Supply chain disruptions leading to higher costs and missed sales
▪ Lost productivity due to lack of labor availability
▪ Dampened sales from lower consumer sentiment and confidence
▪ Global financial market shock leading to potential cash-flow impediments
The crisis continues to be a fluid situation. Companies are updating new policies that relate to their organizations’ response to COVID-19 and how it affects employee safety as a primary focus, as well as how to best respond and meet the needs of their customers.
Below we will take a look at industries hit the hardest economically by Covid-19. B2C has been hit hard due to the social distancing and behavioral changes of people as well as category/channel shifts or decline in consumer spend. The below outlines in detail some of the B2C industries in detail and expected challenges rebounding from Covid-19.
Industries with Highest Impact | B2C in the Short Term, B2B Starts Feeling the Impact
B2C
- Travel
- Immediate slowdown in airline, rail, and hospitality segments globally due to restrictions and uncertainty
- Expected long recovery period as each region and country recovers from thevirus
- Banking
- Increased market volatility reducing investment activity, likely leading to more withdrawals/redemptions
- Liquidity issues driving increased savings and potentially higher risks of bankruptcy for lenders
- Retail
- Revenue shortfall as store closures and social distancing reduce brick-and-mortar traffic
- Increased e-commerce revenue unlikely to compensate
- Healthcare
- Overwhelmed healthcare resources for hospitals, clinics, and diagnostic facilities
- Front-line HCPs unable to address the virus on a global basis
- Public Sector
- Operational budget reduction due to loss of tax revenue and budget rerouting for economic stimulus
- Demand peaks but timely availability of skills and resources challenging, as suppliers operate at lower capacity
- Education
- Education technology emerging due to increasing focus on virtual learning
- Sports
- Restricted gathering and cancelled events negatively impacting revenue
This depicts B2B which has been hit hard by Covid-19 due to production and supply chain challenges and downstream consumer effect.
B2B
- Transportation
- Increased freight transportation time induced by quarantine and capacity reduction
- Global container capacity affected by reduced demand
- Manufacturing
- Massive supply chain disruption from China and South Korea gravely impacting manufacturing sector across the globe
- European and U.S.-based firms facing capacity and supply shortages due to factory closings and supply network disruptions
- Oil and Gas
- Refinery and oil fields operating at lower capacity due to lower demand and manpower shortages
- Decrease in demand leading to fears of oversupply for crude and refined products, and a resulting fall in prices. In addition, Russia and Saudi Arabia flooding the market with supply – price of oil is hit from two sides.
- Storage capacity overruns and production pauses with demand reductions due to oversupply of crude and natural gas
- Consumer Products
- Massive demand shifts across categories leading to variable product availability, lower consumer sentiment and confidence
- Supply chain disruptions at multiple points due to border shutdowns, supply restrictions, and transportation delays
- Wholesale Distribution
- Volatile environment, making fixed costs have a great impact on profitability
- Drastic shift in demand pattern, making it hard to define inventory and procurement strategy
How can Savantis, as an SAP Partner, help the retail industries prepare to recover from Covid-19:
- SAP Marketing Cloud solutions provide targeted and geolocation-specific information on nearby store opening times and product offerings.
- Create additional transactional channels with real-time inventory availability and flexible omnichannel fulfillment options such as pick up in store or ship to home with SAP Commerce Cloud solutions.
- The SAP Commerce Marketplace Management application by Mirakl enables your retail organization to create, launch, and operate your own online marketplace to handle unsellable seasonal fashion items.
Retail Industries have been forced to re-imagine the future:
- Create flawless omnichannel retailing with the SAP S/4HANA® Retail solution and C/4Hana offerings such as the SAP Consumer Sales Intelligence solution stretching across Loyalty, Merchandising, Digital Marketing while leveraging all aspects of the retailers Store and Web Channels.
- Get closer to your end consumer and respond to rapidly changing demand and pre-empt customer needs in terms of crises.
As we have seen since the Covid-19 outbreak started, the outbreak is having and will continue to have an impact on the global economy as retailers are shut down and global supply chains interrupted. There is no blueprint for when and how companies can steer out of this as the crisis subsides. Savantis is here to offer assistance during these times of uncertainty and help you respond to these challenges.
At Savantis, we work towards understanding your company’s unique SAP needs during this challenging time. As an SAP Gold Partner and PCoE certified partner, we address the unique business needs through innovation and deep knowledge, aided by intelligent systems like S/4HANA, cloud migrations, C/4HANA and SAP support. To contact our team please reach out to marketing@savantis.com