With the changing landscape as a result of Covid-19, South African companies are struggling to adapt to changing customer behaviour.
According to the Customer Experience (CX) Business Research report by customer experience specialist Nlighten, more than 80% of companies say they have experienced massive disruption to their business and supply chains.
Polling local firms in June this year as the country was exiting its most stringent lockdown, the study sought the views of business leaders on the impact of the Covid-19 crisis.
Nlighten CEO Nathalie Schooling says the challenge lies in companies not being able to adapt to the “altered reality” quickly enough.
“Customers are expecting brands to be able to deliver on service,” she says. “Companies that have previously lagged in their customer experience strategy are scrambling to keep up, while their more agile competitors win market share.”
Schooling says 77% of the respondents agreed that their companies need to become more “flexible and agile”.
The report identified that local brands have had to adapt quickly to retail and customer-facing environments deeply affected by the coronavirus pandemic.
While the businesses are trying to balance their survival with safe practices in line with the regulations, major disruption to supply chains has left many struggling.
Three quarters of companies surveyed had seen a decline in sales, with 34% experiencing a drop of more than 50%. Only 14% reported no fall in sales. Education and training, automotive, hospitality and tourism were the most disrupted industries. Only 29% of respondents reported that their businesses had received government assistance.
Schooling says the challenges that lie ahead for businesses as a result of Covid-19 are enormous.
“Among the changes that respondents to the survey foresee are the expectation of customers for greater automation and digitisation of services. And this will have to be done despite 81% of respondents [having] said they also expect consumer spending to be lower in the short term.”
Schooling says the agility of a company and how it responds to its customers’ changing needs has been put to the test overnight.
“The pandemic has certainly heightened awareness of customer sensitivities, and companies unable to adapt are unlikely to survive.
“It’s somewhat ironic that it’s taken a global pandemic to force brands into placing customer needs and preferences higher on the agenda.
“This should have always been given importance, even before Covid-19.”
Growth in digital transformation
The report also revealed that there has been a sudden increase in investment for digital transformation and automation of services as 32% of respondents selected this as an investment of choice.
This was followed by product innovation and enhanced client experiences.
Schooling says there are definitely some positives to take from the pandemic and the way business leaders have responded. As many as 85% of respondents said the pandemic has influenced how they think about the customer, and 89% see the value in an efficient and flexible CX strategy.
Having more empathy with customers and taking all measures necessary to keep them safe by implementing strict hygiene practices is also a top concern.
“Given the visible and tangible measures that companies need to take to stay relevant, there’s no more hiding for anyone. Customers will immediately see whether a brand cares about them from how they respond to this crisis. And companies that don’t respond appropriately shouldn’t expect to survive,” Schooling says.
She says the crisis has emphasised that business leaders cannot sit back and leave “so-called soft issues” in the hands of line managers.
“They have to lead from the front if they’re to be successful.”