SIGNALS: GROWTH PLATFORMS FOR A COVID-19 IMPACTED WORLD (07 OF 11)
Right now, the movement of people and goods is looking more ‘unglobal’ than global. We will look closer to home as we support local businesses, protect supply chains, and with a lessening will to venture overseas.
Supply chain security is now a live issue. The ‘just in time’ stock strategies on which companies have relied on to source globally and respond to / drive fast trends is shaking.
Global corporate governance experts, Sustain Analytics, anticipate Covid-19 will drive consideration of more localised supply chains to maintain supply security (1).
PWC report that, as of April 30th, 52% of CFOs across 24 countries are developing additional and alternative sourcing options as a response to Covid-19 (2).
Add to that the sudden and drastic reduction in flights (-91% in top 10 GB airports in April 2020) – the end of the cheap flights’ era?
Warren Buffett thinks so. When asked why he sold the entirety of Berkshire Hathaway’s $4bn equity position in the U.S. airline industry due to Covid-19 impact on global travel prospects.
His response: “The world has changed for the airlines” (3).
This appears to be more of a temporary reset. We believe that it’s more likely a tactical opportunity to drive connection and advantage in markets over the next 1-2 years
As this Unglobal trend endures, expect a resurgence in local manufacturing and regional identity.
A rejuvenation of distinctive, local industries and supply chains would fuel regional and national identities.
As travel outside our borders become less accessible, it becomes more aspirational, more of a luxury experience.
Brands can fuel this changed world, reflecting local tastes as well as fuelling global aspirations.
We see two opportunities for brands to succeed in an ‘unglobal’ economy:
01 Celebrate and Call-Out your Local Credentials
Local is not a compromise so show pride in your links – ‘Your chips are designed in my town! I’ll buy you!’
02 Share stories about your origins – the more exotic the better!
Enabling physical and virtual exploration of a world that is now a little less in reach will drive brand aspiration and fascination.