LiveArea Research | COVID-19 Business Impacts & Future Planning
May 26, 2020
LiveArea surveyed 1000 senior managers from UK and US businesses across all verticals to explore the impact the pandemic has had on their businesses and operations, and understand their concerns and priorities moving forward.
Planning for the future
Half of businesses still operating say they will invest in digital technologies as a result of the Covid-19 pandemic (50% UK & 51% US), with those working in larger organisations with more than 250 employees the most likely to do this (72% UK, 69% US).
Turning to what digital technologies will be invested in, IT infrastructure (57% UK, 41% US) and digital commerce (41% UK, 43% US) are the most common areas for prioritisation. A quarter (23% UK, 25% US) will invest in automation once the crisis is over.
IT and marketing to be outsourced post-Covid-19, as companies look for greater flexibility
Just under half (46% UK, 43% US) of businesses currently outsource some part of their business, with the most common areas to outsource being IT and development (25% UK, 22% US) and marketing (10% UK, 13% US).
Among those not currently outsourcing in these areas, over a third (37% UK, 34% US) would consider outsourcing IT and development as a result of coronavirus and a third (32% UK, 34% US) would consider outsourcing marketing.
Strategies will change
Considering their long-term business strategy, over half of businesses that are currently operating say that it is likely they will change this as a result of the Covid-19 pandemic (58% UK & 54% US), with a fifth (18% UK, 20% US) saying this is very likely.
Half of businesses still operating say they will invest in digital technologies as a result of the Covid-19 pandemic.
The impact on businesses
Four-fifths (83% UK, 84% US) of senior decision-makers say their business has been negatively impacted. In the US this is greatest among those working in construction (90%), whilst for the UK this is greatest among those working in business/professional services (89%).
Over three-quarters (78% UK, 77% US) of senior decision-makers say their overall business level of business activity has been lower in the past month compared to this time last year, with two-fifths (41% UK, 43% US) stating it is a lot lower. In the US, the smallest businesses have been hardest hit, with 86% saying their business activity is lower, whilst in the UK 82% of small-medium businesses say the same.
Half of businesses stopped operating
Half (53% UK, 48% US) of businesses have had to stop operating due to Covid-19, with 8% of US and 6% of UK businesses closing permanently. In addition, 41% of UK businesses, and 35% of US businesses, have had to close temporarily.
Time is crucial
As the situation continues overtime, senior decision-makers grow less confident about the survival of their business. Whilst nine in ten (90% UK, 89% US) are confident that their business will survive if the situation continues for another month, if the situation persists for over 3 months, 29%.
Two in five businesses furloughed staff
Among businesses that are still operating, two fifths (46% UK, 40% US) have had to furlough employees, with a further fifth (17% UK & 21% US) likely to do this.
Half (49% UK & 53% US) have had to reduce the hours employees work and over a third (35% UK, 38% US) have had to apply for government support.
A fifth (19%) of US businesses still currently operating have had to lay off employees, compared to 10% in the UK.
Regarding the impact of coronavirus on business function among businesses still operating, almost half (48% UK, 46% US) say that production or service delivery has been impacted the most by Covid-19, followed by sales and account management (46% UK, 48% US).
UK businesses are less optimistic than US, but there is hope
Among those whose operations that have been impacted since the start of the coronavirus pandemic, just a fifth (20%) of UK senior decision-makers say they feel their business will be running as normal in the next three months. Meanwhile those in the US are more optimistic, with a third (32%) saying their businesses will be running as normal in the same timeframe.
With this in the mind, over half (57%) in the UK say they feel their business will be running as normal in the next 6 months, compared to two-thirds (67%) in the US. A quarter (24%) of those in the UK feel it won’t be until 2021 or later that their business will be operating to how it was before the Covid-19 pandemic.
IT infrastructure and digital commerce are the most common areas for prioritisation, and a quarter of businesses will invest in automation.
Top business concerns
Businesses are most concerned about the general downturn across the whole economy (59% UK, 58% US) followed by a drop in sales (both 53%). A quarter (25%) of those in the US are concerned about their own job security, which rises to 29% among those in the UK.
Clarity the key to business continuity
Nine in ten businesses currently operating in the UK & US say they need some help during this period (90% in both markets).
Considering the measures that could help businesses, clarity around the duration of lockdown restrictions is the most popular option (55% in both markets), followed by increased government intervention and support, such as access to grants & loans (44% UK, 40% US) as well as increased support for staff well-being (22% UK, 24% US).
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This study was developed by LiveArea and conducted in May 2020 by independent research Opinium, surveying 1,000 business managers across all verticals in the UK and US.