Businesses are boosting online services, but their digital transformations may be delayed because of COVID-19

25 March, 2020

Before COVID-19 hit us, airlines had been increasingly flirting with the idea of digital transformation. Head of Transformation was a new role popping up at a lot of airlines with a remit to deep dive into how new digital technologies can help them react quickly to the ever changing demands of consumers.

So now what? With COVID-19 grounding more of the world's airlines by the day will they still consider investing more in digital transformation or will they figure that what they currently have still works so anything else will have to wait?

With everyone now socially distancing themselves and staying at home, the desire to shop online is on the increase. But with so much global uncertainty most companies are loathe to spend on new technology and strategic initiatives while their shares are in freefall. Making long-lasting changes and promoting new products seems to be something companies are rethinking.

Unsurprisingly, a recent Econsultancy and Marketing Week survey on how COVID-19 was impacting the marketing industry, found that among 500 marketers working at major brands with more than GBP50 billion in annual revenue, 91% (UK) and 87% (North America) predict an increase in the use of online services, with 70% (UK) and 75% (North America) also predicting an increase in ecommerce.

Despite that, some 47% of the same 500 brands confirmed that any planned technology or infrastructure spend was either delayed or under review. A further 47% say that they have delayed or are reviewing strategic initiatives, such as digital transformation or restructuring.

Marketing budgets have also been mothballed, with 62% in the UK and 63% in the US reporting that their marketing budget commitments are now on the back burner. In addition, 55% of those marketers in the UK and 57% of those in North America report that product or service launches are delayed or under review.

Hiring freezes are also affecting digital transformation plans. An average of 53% of the brands - 45% in the UK and 61% in North America - confirmed that the freeze on hiring meant they were unable to bring in any new talent with the appropriate digital transformation expertise. As the global shutdown continues these figures are likely to increase as more and more companies evaluate budgets and put plans on hold.

It's a high risk balancing act to work out whether investing in digital transformation is a good thing in these uncertain times, or just plain foolhardy. While staff have the time and business is slow, creating major changes to websites and booking engines could be a good use of time, but on the other hand with so much financial uncertainty around, is it a gamble worth taking? Will they still be around when the world gets back to some kind of new normal, as so much will have changed.

But customers will use this increased time at home to get used to a new digital life, form new habits and plan for a future post COVID-19. So if the opportunity is not taken now, the airline industry may lag behind expectations when finally the confidence returns to book flights and holidays.

Any kind of digital transformation takes time and is a gradual process. Small changes and improvements will always pay off. But being able to survive and even see a competitive future in these dark days is hard. Creativity is certainly something a lot of brands are embracing now.

As the saying goes, necessity is the mother of invention so what may have been a pipe dream for the future could become a reality with some forward and creative thinking. Digital transformation is definitely a reality but when airlines will feel confident enough about their long term future to make the commitments necessary, will only be seen in time.