Since the global outbreak of COVID-19, every industry has undergone monumental changes. To survive, businesses had to quickly adapt and change to this new reality. However, as vaccines begin to roll out and communities are re-opening, we can start to see the outcomes of these changes.
In May of 2020, we interviewed nine experts on their predictions of how COVID-19 will impact their industries, from the global supply chain to local brands and retailers. They gave a glimpse into how the pandemic was impacting their industries and how businesses could adapt once COVID-19 was under control.
A year later, we went back and interviewed those same experts to see if their predictions were correct.
Brand & Retail
By Carolin Wais, Ventures Associate, Brand & Retail
Quick Commerce is here to stay
Quick Commerce is here to stay and customers value the swift delivery of goods without having to leave the house. Therefore, more and more companies are emerging, such as Gorillas, FastAF, GoPuff, Flink, Cajoo, or our portfolio company Macai.
With more parcels being shipped and e-commerce spiking, the number of returns is also increasing rapidly. Decreasing returns has become very important for a healthy business. There are different technology solutions designed to decreasing returns, such as virtual sizing and try-on options. There are also models like nok’s, where the products are delivered home for testing them, among other options.
Live stream commerce
Originally coming from China and being a large source of revenue there, the trend has reached the US and Europe last year with beauty retailers like Douglas hosting multiple shows a week. The global market is expected to reach $11 billion globally this year.
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Due to the pandemic and a lack of offline activities, many people turned to gaming. This puts pressure on brands and retailers as gaming has become an important part of engaging with an audience. Therefore, brands like Balenciaga turned their latest fashion shows into immersive virtual realities where users could walk around and look at the items digitally.
Digital Fashion & NFTs
Another trend that is fueled by the increase in Gaming is Digital Fashion and NFTs. NFTs are unique and digitally certified items such as Mona Lisa artwork can be collected. A digital painting by Beeple was purchased for nearly $70 million and recently Fewocious made $3.1 million in one day by selling digital sneakers.
By Payal Patel, Director, Corporate Partnerships, Energy
Through this unprecedented past 18 months, the energy industry was affected by two black swan events, the Covid-19 pandemic, and an oil price crash. The Plug and Play energy team saw two major trends fueled by these events, a shift of focus to the energy transition and additional resilience needed in our energy system.
The topic of how the world decarbonizes to meet the Paris Agreement’s goal of limiting average temperature increase below 2° C has become the central topic of gravity. But that is only half the challenge. While we decarbonize industries, we will still need to find ways to provide abundant, clean energy to billions of people as the population grows and their living standards improve.
Interest in green (and blue) hydrogen has increased significantly as it is seen as a potential panacea for energy-intensive industries like steel or long-haul transportation. Though much investment is still needed to drive down the cost of hydrogen to be at parity with other fuels as well as ideas on how to safely store and transport H2.
In February 2021, an unprecedented winter storm wreaked havoc on Texas, the world’s 9th largest economy by GDP. In the aftermath, regulators, utilities, government officials, and citizens appreciated more the fragility of energy infrastructure and the need to build resilience into the system with new technologies. The incident in Texas is just one example. Resilience in our energy infrastructure is needed to prevent wildfires in California, help developing countries hit with monsoons and hurricanes, and provide power to those who don’t have a reliable grid.
By Carlos Pérez-Pla, Ventures Analyst, Enterprise Tech
Hybrid Work Model
Millions of people adjusted to working from homes as offices closed. In 2021 a combination of remote work and onsite work is starting to become the norm. Some employees think that remote work allows them to be more productive and flexible. At the same time, others are more likely to go back to their workspaces.
Behind remote work, other spaces need to be switched in organizations. Companies have to change their culture and adapt it to focus on employee wellbeing while working remotely.
Faster adoption of Automation and AI
Adopting automation has helped to control costs and mitigate risk during past recessions. The idea that anything can be automated has gained popularity during the past year, organizations are looking into Hyperautomation to automate any business processes. This will lead companies to be optimized, connected, and efficient.
Increased demand for reskilling and upskilling
The skill gap has augmented due to the increase in job automation. According to Gartner, only 16% of people hired possess adequate skills for the current job. The most in-demand skills are Artificial intelligence, Machine learning, Cloud computing, and cybersecurity
By Kiswana Browne, Senior Ventures Associate, Fintech
Digital payments are on the rise as consumers are increasingly conducting transactions on mobile devices and businesses are recognizing the revenue opportunity. The focus is on digital payment solutions that offer easier, cheaper and safer ways to transfer money between businesses or individuals. From e-commerce and contactless in-store payments to peer-to-peer payments, Covid-19 has accelerated the demand for digital services.
Taking it a step further in the digital payments trend is the increased interest in using digital currencies such as bitcoin to perform transactions. Heightened uncertainty in the pandemic caused consumers to gravitate towards alternative ways to store money. Payment leaders such as Visa and Paypal have entered the market, pushing this trend further mainstream.
Digital banking customer experience
With Covid-19, mobile banking app registrations and traffic skyrocketed and consumers expected their banks to keep up with their changing needs. This shift caused banks to enhance their digital offering to become more customer-centric. From digital onboarding to virtual assistance, the latest trend is banks enhancing their customer’s experience from the first interaction through the customer lifecycle.
As small businesses required financial assistance to survive the pandemic, they turned to their banks for support. However, legacy banking infrastructure could not handle the uptick in requests. This allowed non-traditional lenders to provide support and in turn acquire new customers. Accordingly, banks accelerated their digital transformation efforts and are actively seeking ways to support their small business customers.
For consumers, point of sale installment loans, also known as “buy now pay later”, became popular as consumers sought alternatives to a credit card.
Food & Agtech
By Michelle Shi, Director of Innovation, Food & Agtech
Early in the pandemic, the food and agtech industries faced two crucial problems: (1) labor shortages and (2) bottlenecks in the supply chain.
A lot of labor goes into the supply chain of food due to its time and environment-dependent, perishable nature. Corporations faced many challenges in keeping up with the demand of consumers while having a diminishing workforce.
Bottlenecks in the Supply Chain
From a supply-chain perspective, a lot of restaurants were losing business, grocery sales were spiking, and there were export bans from various countries, resulting in a huge fluctuation in the delicate balance between supply and demand.
These two shifts created a push for innovation to create a more transparent, optimized food supply chain. Solutions ranged from offering more efficient inventory management, real-time tracking of assets, to rapid-pathogen testing for food safety. In addition, there has been an influx of demand for solutions upstream in agtech, especially optimizing and automating processes in the field and controlled-environment agriculture.
By Jennifer Thomas, Managing Director, Health
When the pandemic hit, health systems didn’t have telemedicine and other remote technologies in place and needed to divert staff to the pandemic response. Patients turned to solutions they could access directly to get the care they needed and wanted; many of these solutions are startups that had been developing pre-pandemic. In addition, consumers have gotten extremely comfortable with online ordering for goods and services, so B2C health companies tap into this mindset.
Permanent Hybrid Care Model
Healthcare is not just being delivered in the home via telemedicine and at-home diagnostic solutions―a trend that is here to stay post-pandemic―but now also meeting patients where they are, whether that’s at the local pharmacy or even the barbershop.
Investments in technologies ranging such as autonomous trucks, drones, smart sensors, and AR/VR applications have been accelerated tremendously over the last 18 months as companies have realized the upside these technologies have in even the most challenging of times.
A better way to manage patients and businesses is to use value-based care models, which can pay for healthy outcomes regardless of the number of appointments and treatments.
AI and automation
AI and automation needs were amplified and accelerated. Excess losses, the abrupt shift to a remote working environment, and a high volume of requests for new coverage or claims payouts has streamlined the urgency for and adoption of tools like Taktile, which partners with insurers to productionize machine learning use cases.
Life & Health insurance solutions
The need for solutions to support distribution in life and health insurance boomed. iLife, for example, partners with agencies and carriers to simplify the process of shopping for various types of life insurance policies. iLife’s inbound customer growth since launching a few months ago has been astronomical, reflecting the demand to write new policies and digitize the back office, the data-fragmented process of providing quotes. The demand for P&C distribution tools has followed closely behind, with solutions like Agentero spearheading innovation.
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Insurance continues to transform from a single transaction and contract to an ecosystem of relationships and products. Embedded insurance - the creation, sale, or enrichment of an insurance product by a non-insurance entity - has become a defining theme in the industry. Startups like Flock are enabling insurers to access a new category of distribution partnerships, and innovative companies outside of insurers (e.g. OEMs and fleets) to embed insurance into their value chain.
By Janis Skriveris, Associate, Ventures, IoT
Cloud infrastructure enables both users and enterprises to run software without installing it, offering redundancy, stability, and security. Because of the lockdown the COVID-19 pandemic brought, companies are looking for solutions to remain online while everything is being shut down. Cloud computing also eliminates the problem of buying and maintaining hardware.
There are a lot of tools necessary to adopt remote work, so it’s not only about video conferencing and remote meetings, but rather about the entire back office and related processes. This shift has to do with hiring and the assessment of new hiring candidates, onboarding, training, meetings, and events. On top of that, there is an increasing demand for solutions related to payroll, legal, employee benefits and performance, knowledge and resource sharing, and security.
Robotics saw a significant demand increase as companies across various sectors sought new ways to continue their operations to an extent in a socially distanced world. Robotics technologies have been an area for innovation of large enterprises even before the pandemic, for example by helping eliminate variance of highly repetitive, manual tasks. However, COVID-19 illustrated that robotics for large manufacturing and distribution organizations is closer to the must-have end of the spectrum despite certain technological boundaries of robots as a whole.
By Clara de Ros, Ventures Analyst, Mobility
A shift in consumer behavior
Safety and health are now the top considerations when choosing a transport method. People prefer to be isolated and outside when traveling, which makes micro-mobility solutions a good alternative to traditional public transportation such as taxis or buses. Shared rides and public transportation are in low demand and cities are being redefined to create more space for bikes and scooters.
The movement of goods accelerates
There has been an increasing tendency to purchase more from online stores and delivery services. As a consequence, last-mile delivery businesses have grown exponentially and micro-mobility companies have burst onto the delivery market. At the same time, the boom of delivery orders has revealed automated local courier services as a promising area for autonomous vehicles. While large automotive players took the 2020s' health crisis as an opportunity to divest from full self-driving R&D for personal transportation, cargo transport, and last-mile delivery emerged as a relatively long-hanging fruit.
Online sales, once seen as a niche, are now starting to replace traditional dealerships. After COVID-19, consumers are buying cars online as they do almost everything else, with the ability to complete the entire transaction digitally and take delivery without ever stepping into a showroom. The classic dealership model is old-fashioned and has been under threat in recent years. Automotive new players like Tesla and Polestar (Swedish electric car brand) are selling directly to consumers through company-owned stores but they focus on a digital-first retail model with the retail spaces being a support for the digital platform.
New Materials & Packaging
By Danae Robert, Ventures Associate, New Materials & Packaging
The materials space is key to sustainability as it is the feedstock to all the products surrounding us. The main trends are, therefore:
AI & Platform for R&D
If corporations want to succeed in their sustainable goals by 2025, 2030, or 2050, they will need a faster R&D process to accelerate new materials discovery.
Coatings for Paper Packaging
There is a need for rapid demonstration of what we can do today. Paper or cellulose is a great material that is currently underused but well researched. The customer is satisfied by its aesthetic, especially in the packaging space. The limitation to cellulose is its own properties, so using barrier coatings to increase hydrophobicity, strength and oxygen has been of great interest.
Sensors and traceability
Transparency is of great importance not only to customers but also to corporations. Today, there is a lack of knowledge when it comes to the material's journey so understanding its past would not only enable faster processes but also greener sources and transportation.
Real Estate & Construction
Healthy Buildings and Tenant Experience
The real estate industry was hit hard by the pandemic due to the lack of digital tools and most importantly, sanitation solutions. Healthy Buildings and Tenant Experience are the new buzzwords in proptech. Autonomous cleaning solutions to spray disinfectants, sanitation robots, air filtration systems and UV light cleaning all became the go-to products during the pandemic. Touch-less entry for admittance into the building, elevators, and floors. Wellness and temperature checks using facial recognition are all solutions that became necessary as the world returns to the office.
Robotics & Workforce management
The pandemic slowed down construction projects all around the world. Since COVID-19 has been around, a need for Robotics has been crucial as robots on sites can diminish workers on sites and most importantly, help with social distancing. These solutions range from robots doing simple tasks like field layout and painting to progress tracking. Above all, Workforce Management has been the most needed tool to combat productivity and safety. We’ve seen sensors tracking workers supporting social distancing and contact tracing.
Supply Chain & Logistics
By Frederik Bohn, Director, Corporate Partnerships, Supply Chain
One of the trends that has experienced the biggest gains in attention and funding in 2020 has undoubtedly been sustainability. No matter which sector, from fintech to mobility and, of course, supply chain & logistics, sustainability has been on the top of every company's agenda. With accelerating e-commerce volumes, consumers' increased demands for home delivery capacities, and congested roads and ports, the transportation sector needs to keep up with the industry's growth while also decarbonizing the globe's top polluting sector. (Transportation accounts for 29% of GHG)
Near-Shoring Production and Just-In-Case Inventories
Supply chain disruptions have caused delays for every product imaginable and have brought production lines across the globe to standstills. Complex global supply chains and a just-in-time production strategy are great for optimizing margins - when things work. We've seen a massive shift in localizing a certain level of manufacturing capabilities as well as increasing inventory levels, both measures that enable companies to better withstand future disruptions to their operations.
Robots and algorithms don't get sick, don't need time off, don't need a vacation, don't need to socially distance, and can work around the clock. Investments in technologies ranging such as autonomous trucks, drones, smart sensors, and AR/VR applications have been accelerated tremendously over the last 18 months as companies have realized the upside these technologies have in even the most challenging of times.
By Nick Chow, Ventures Lead, Sustainability; & Matt Claxton, Global Director, Sustainability
A stronger push for sustainability
We’re seeing a big trend in the climate sector where entrepreneurs and employees want to work in this area and solve some of the biggest challenges we are facing. Groups such as Terra are on a mission to upskill individuals to get people on this planet to start creating solutions to help with the climate. Additionally, employers are getting a push from employees to be more sustainable. In fact, employees are encouraging their employers to drive engagements that promote sustainability from within their organizations.
Several organizations have banded together to solve complex issues across numerous industries, whether it’s ending plastic waste around the world, going carbon neutral, creating better water resilience, or promoting sustainable fashion. For example, the COVID-19 vaccine was quickly made by all the groups that worked together, from shortening the manufacturing process to getting it approved and finally administering it to the general public.
Travel & Hospitality
Work from anywhere
The incorporation of flexible schemes in work and education has allowed users to work from anywhere. The creation of this community of so-called “digital nomads” has provided a breather for the hospitality industry, doubling the number of long-term stays bookings.
Hospitality brands have rushed to develop formulas to increase their role in this new scenario, by adding networking and co-working capabilities to their spaces.
Sustainability is becoming a must
The pandemic has put sustainability at the forefront of the Travel & Hospitality industries’ priorities. This is due to three major shifts: first, global travelers are getting more conscious about how sustainable their travel choices are; second, the need for travel and hospitality brands to cut costs and optimize resources has motivated the introduction of innovation to reduce waste and utilities’ bills; and third, there's a need to adapt to international policies, environment every day less lenient with high-pollutants.
Millennials and GenZ explosion
Even before COVID hit, Millennials and GenZ were already considered the “Wanderlust” generations, as more than half of their members were ranking traveling as a higher priority compared with other ambitions such as property ownership or starting a family. Millennials and GenZ have a stronger preference for new online platforms, especially mobile, where they can blend social interaction with travel discovery and trip planning. The entrance of younger generations into the travel industry will also re-shape the type of journeys being booked, with a stronger appetite for meaningful and customizable experience-rich trips, and more spontaneous short getaway trips.
All players in the travel industry, but especially hotels, airlines, and airports are adopting contactless technologies to keep travelers safe and satisfied. This trend is covering many points of the traveler’s journey, all the way from the contactless check-in and baggage drop points at the airport to the touchless F&B ordering at hotels and restaurants.
Flexibility has become vital to travel’s health and safety and ensures its opportunities to actually travel. Quick shifts in policy measures, varying vaccination rates, and a general sense of uncertainty have proven to be almost as damaging for the industry as full lock-downs. In this case, companies have focused their attention towards solutions that can help them put the travelers at ease, from informing of any policy or legal changes that might affect the traveler in real-time, increasing the offer and coverage of travel insurance solutions, or even facilitating vouchers and/or flight changes with more efficiency than ever before.
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