COVID-19 and Business Resilience

COVID-19 and Business Resilience

Future is uncertain by its very nature. The key to business success, and perhaps even survival, lies in the ability to overcome and mitigate the challenges in tough times. The last two decades have seen multiple recessions in the world such as the dot-com bubble of the early 2000's, the 9/11 Recession in 2001, the housing market crash of 2003, the automotive crisis in 2008 and most recently the COVID-19 impact which has impacted economies all over the world. Can technology come to the rescue given that everything seems to be in a stand-still?

Rise of the Pandemic

The COVID-19 disease was first identified in December 2019 in Wuhan, the capital of China's Hubei province, when China reported a cluster of 41 cases with mysterious pneumonia like symptoms. 

Late February saw the disease spread outside of China to South Korea, Italy, Iran and even the United States. As of April 18th, there were more than 740,000 cases in United States with more than 40,000 deaths. Other than impact to health, there has been major setback to the economy.

Impact to Small Businesses

These are testing times, especially for small businesses, as sudden demand fluctuations can easily eat into their already tight profit margins. No one imagined the coronavirus would bring a complete shutdown of non-essential businesses and lock people down in their homes for a considerable period of time. In United States unemployment rose in 29 states as the national jobless rate jumped to 4.4%. During the final two weeks of March, roughly 10 million Americans filed unemployment claims.

As people brace for the worst to be over, the President on April 16th announced new guidelines for reopening states. The Opening Up America Again guidelines say states that show a downward trend in COVID-19 cases will be able to reopen restaurants, bars, theaters, workplaces, sporting centers and gyms as soon as May 1, even though it would be up to individual governors to make the decisions. States with less number of cases and declining growth might be able to open sooner than others.

In these times technology can help businesses get back on their feet and see this as an opportunity to use innovative ways more than before.

Predictability to the Rescue

Predictability in seeming unpredictable situation can make a huge difference. While spa, salons and other small businesses prepare their come back to business: 

• They need to know an expected timeline when things may come back to normal
• They need to ensure staff is properly trained to handle social distancing and sanitary guidelines to meet new policies and expectations from wary guests. 
• They need to provision adequate resources and schedule providers upfront to meet the initial demand

One way this can be done is by staying connected to what's happening around and preparing the business for the come back. For example, to know a rough timeline when a comeback can be expected can be predicted by looking into the progression of coronavirus infection in United states and other infected states. Using models, it is possible to map the spread of the disease that provide an estimate on timelines. Below is one such a map for United States which shows new infections being prevalent almost till mid May.

Projection of COVID-19 Infection in United States*

Below is the model for new infections in the state of Washington.

Projection of COVID-19 infections in Washington, US*

New infections in the state of California, United States are plotted below.

Projection of COVID-19 infections in California, US*

Looking at how the demand has been affected as a function of coronavirus cases, it is possible to estimate returning demand when infections see a decline This is when businesses start to open, of course, following the advisories in the state. Such a model can also help businesses plan the demand, resources and staff schedules in a better manner when they eventually open up. 

Operational Analytics for Decision Making

This is the time for businesses to streamline their operations for better efficiency. Predictive analytics and machine learning can forecast the future demand and service provider capacity in off peak as well as peak times. Such processes look into multiple aspects - the past demand, associated seasonality, trend in data, anomalies and sometimes external data such as COVID-19 infections or weather. 

The advantages of relying on predictive analytics is multi-fold:

1. Cut down costs by bringing in efficient operational processes

2. Reduce manual dependencies in areas that can be done more reliably and effectively by automated solutions

3. Be better prepared of the future demand or fluctuations using machine learning techniques wherever possible

It is possible to tap into these by incurring minimal or sometimes zero additional cost. These insight are provided by several Analytics enabled solutions that exist today, sometimes offered by solutions that are already being used by the business as an add-on. But leveraging these solutions and adapting to it does require a shift in the way a business looks at its operations on a day to day basis.

Conclusion

While the coronavirus has brought uncertainty there is also hope. It is given that things would improve over time. However predictability of future has significant implications to business, society and overall economy. The spa, salon and small businesses, given the nature of their touch-based services, are directly impacted by the epidemic. These testing times provide significant opportunity for the industry to be better prepared to tackle the fluctuations in demand and use efficient operational processes. It is my hope that the industry works together in doing whatever it takes to pull through and be ready for what the future may bring.

* The views and forecast model expressed by the author are his own and do not represent the views by any country, state or business.