Digital transformation in the time of COVID-19
The COVID-19 pandemic lockdown has forced us to adapt many aspects of our daily lives. Prolonged indoor stays are accelerating the evolution of eCommerce, have made home office the current standard working model for many, and have brought the classrooms of our school children into our homes. But what will remain of this adaptive behavior once the lockdown has been lifted?
Although many of us have had access for more than a decade now to enough online services to let us live almost without leaving the house, very few people have taken this state of affairs to its logical conclusion. However, owing to the current COVID-19 pandemic, what was once seen largely as a luxury of convenience has now become an indispensable way of life. It remains to be seen how this digital transformation has permanently impressed itself upon our lives, and how much of it will remain post-crisis.
The power of eCommerce
My father lives in Vallefiorita, Italy; a small town in southern Italy, with a population of less than 2,000. He is 85 years old and accustomed to buying his weekly needs down at the corner grocery store. Now, with the coronavirus lurking about the streets, he is precluded from practicing this weekly ritual.
Owing to my father’s age, he belongs to the high-risk group most endangered by SARS-CoV-2, the novel coronavirus, and consequently is among those most affected by the lockdown. The support mechanisms that make up the social fabric of his village have been immobilized, as everyone is forced to stay home.
In line with the ancient adage, “necessity is the mother of invention”, his corner store in Vallefiorita has set up a WhatsApp group for its customers. Now my father, and others like him, can instant message their grocery orders to the store via WhatsApp. The grocer then delivers food and other household items to his local patrons, and payment is made upon delivery. What my father once would have considered an extravagant convenience has now become his lifeline. This is a simple example, but it underscores the conclusion that retailers will eventually have to setup viable online alternatives to their brick-and-mortar stores as consumers around the globe begin to see the true value of eCommerce. This is a bone fide transformative moment: there will be no going back to “business as usual”.
To emphasize the point: older generations are indeed beginning to see online shopping as a valid option to obtain groceries and daily necessities. Recently Alibaba reported that in China, online grocery orders placed by people born in the 1960s were four times higher than normal during the Spring Festival — when the country was suffering hundreds of new SARS-CoV-2 infections each day. Hema, Alibaba’s online supermarket, reported that orders were up 220% year-over-year during this time. Competing online grocery platforms Miss Fresh and JD.com announced that sales were up 350% and 470% respectively. New business from elderly users was largely responsible for these increases. Having recognized the ease and convenience of online shopping, many older people are set to continue ordering groceries online after the pandemic has ceased.
Even as traditional brick-and-mortar businesses have suffered through the pandemic, online business have flourished. In the U.S., online sales represented about 16% of retail sales in 2019. With many physical stores closing due to the pandemic, it is going to be imperative for businesses across the U.S. to establish and grow viable eCommerce strategies. The current heavy dependence on businesses with online stores will firmly establish eCommerce as a vital sales channel and will motivate retail businesses that until now did not have online channels to rethink their sales strategies. Although brick-and-mortar retailers will still have their place in the world, they will have to adapt to a more omni-channel approach. The pandemic has shown this more clearly than ever.
For the past two decades, highly successful business giants such as Amazon and Alibaba have built upon the paradigm of emerging consumer demand for online services. Planning strategically for the time after the pandemic, many businesses are beginning to view the move to online by many sections of the population as largely permanent, and the elderly as a major growth market. Perhaps it is time for us to stop courting the millennials and start looking toward the older generation?
School on the home front
Education is another area that has had to adapt owing to the COVID-19 pandemic. As the father of school-aged twin boys, I have witnessed their school struggle to cope with the situation. Initially, their school was caught off guard and was ill prepared to deal with the lockdown. In time, however, they were able to put together a set of assignments and conduct online school sessions for all students. If the lockdown continues, schools will have to find ways to provide students with online teaching solutions that are yet more permanent and professional. Once these solutions are in place, it is unknown if they will remain beyond the pandemic lockdown. I would nonetheless venture to guess that many students will expect to continue at least a portion of their schooling online from the comfort of their own homes.
For working parents with school-aged children, home office and home schooling are forced to exist side by side. Families around the world are struggling to do their best with makeshift offices, with classrooms and offices moved into living rooms and spare bedrooms. As countless families adjust to the new norm of parents and children alike working and studying from home, this is having a profound impact on online activity and how we use the Internet. Leisure and entertainment activities like shopping and media streaming are being rapidly upstaged and in part displaced by altogether more serious scholastic and business endeavors, with school assignments being handed out on Google Classroom, and work meetings taking place over platforms like Zoom, Google Hangouts, and Microsoft Teams.
New Zealand’s Prime Minister Jacinda Ardern almost perfectly encapsulates the Zeitgeist with her Facebook Live “fireside chats” to the nation, appearing on one occasion in a well-worn sweatshirt having just put her young child to bed, and on another occasion with a child’s toy visible just behind her desk: apt scenes for an era in which work-life balance has been completely upended.
Working from at home was once viewed as a privilege or perquisite reserved for top-level managers. Now, social distancing measures to curb the pandemic have made home office an absolute necessity for all but essential workers. Remote working and the social distancing it entails is easily one of the most impactful things we can do as individuals today to address the current public health and economic crisis. Again, the question remains how this will affect our working patterns once SARS-CoV-2 has been contained and lockdown measures have been lifted. Many employees that have now effectively established their home-working patterns to great effect will be questioning why they had to go to the office in the first place. It is conceivable that this will be the dawn of a great reset in terms of how we work going forward.
Such a reset can only be aided and abetted by the continuing advances in information technology. Already in the past two decades Internet technology has advanced to such a degree that current pandemic-induced business continuity efforts through home-office arrangements have been for the most part seamless. Not only has the home-office environment served the needs of individual workers in the past few weeks, it has also proved to be a great asset for employers by strengthening organizational resilience in the face of this crisis. Going forward, it is only natural to anticipate that the rush toward remote working environments occasioned by the COVID-19 pandemic will become ever more entrenched.
That this is the case is already being borne out in real time. In a March 17, 2020 survey of 800 global HR executives conducted by Gartner, Inc., a leading global research and advisory firm, it was revealed that 88% of the organizations surveyed have encouraged or required employees to work from home, regardless of whether or not they showed coronavirus-related symptoms. Similarly, in a related Gartner survey of 317 CFOs and finance leaders conducted on March 30, 2020, it was revealed that 74% of those surveyed will move at least 5% of their previously on-site workforce to permanently remote positions post-pandemic. Nearly a quarter of the respondents said they will move at least 20% of their on-site employees to permanent remote positions. One of the main reasons given by CFOs for this move was to find new ways to manage costs, another advantage that speaks in favor of the home office.
These surveys illustrate how the current COVID-19 crisis could very well have a lasting impact on the way companies will manage their businesses once the pandemic is over.
iGaming: The future of lotteries?
As the novel coronavirus has spread, we have seen a growing impact on the lottery and betting sector. But whereas other industry segments – in particular, sports betting – have seen strong contractions in growth owing to the pandemic, iGaming has been positively impacted. Even as most state lotteries have been forced to curtail retail sales until the outbreak lessens, WLA members with iGaming platforms have reported 10%–30% increases in online sales since the lockdown. The emerging evidence suggests that online gaming solutions can provide a robust means of mitigating the shutdown of retail lottery sales as a result of a pandemic.
While digital transformation has been a priority in many other business sectors for the past few years, state lottery regulators have been slow to understand and embrace its benefits. These extraordinary times have revealed the limits of certain business models as lockdowns have gone on and physical lottery tickets have become harder for players to obtain. The need for lotteries to embrace online and omni-channel solutions, as demonstrated by the growth in iGaming sales, is now more evident than ever.
Illegal lottery and sports betting operators are quick to fill in the online gap when state lotteries are unable to serve their players on these platforms. In the midst of the lockdown, there have even been some unscrupulous operators that have been offering punters bets on new COVID-19 cases. Betting fraud has also not been hindered by the lockdown as cases of so-called ‘ghost’ games, originating out of Ukraine, were reported in late March. Ghost games are football matches that never took place but are faked and supported with fraudulent data that is sold on to bookmakers who offer betting markets to their punters.
There is no end to which illegal gambling operators will go to lure new punters. Exploiting online technology, crooks poach our players and prey upon those that suffer from gaming addiction. But we can meet these criminals head on by ensuring our players have access to secure and responsible gaming products online. The funds that state lotteries raise go to support good causes in their respective communities. It is vital for all WLA members to be able continue this noble service, even in the event of a lockdown.
If lottery organizations are to withstand levels of disruption like those wrought by COVID-19 and continue to meet customer expectations even in the event of a crisis, it is essential that their sales teams be supported by digital marketing with effective and efficient customer relationship management systems. In particular, lotteries must be able to continually gather data and analyze business patterns in order to continuously improve their gaming products; and they must provide their players with online gaming platforms that parallel, complement, and extend their retail offerings. They should never rest on their laurels. Attracting new players is one thing, but maintaining customer loyalty requires a deep understanding of their needs and habits as well as a good dose of forward-looking planning and a firm dedication to your company’s objectives.
A new paradigm
The COVID-19 pandemic is a once-in-a-lifetime Black Swan event, the likes of which have not been seen in more than a century, not since the Spanish influenza pandemic cut a swath of destruction across the globe from 1918 through 1920. Coming on top of the First World War, the global economy was ravaged by the Spanish influenza pandemic. We can only hope that world leaders will do all they can to mitigate the negative and lasting impacts that the COVID-19 pandemic will have on today's economy.
Technology is indeed proving to be vital in getting us through this crisis, from allowing us to work from home and to homeschool through to enabling us to map the SARS-CoV-2 genome. Nonetheless, in the end, the evolving digital transformation is proving to be as much about a change in our culture, habits, and outlook as it is about advances in technology. Indeed, the biggest part of the digital transformation lies in changing the way we think about the world we live in. The pandemic has forced upon us a profound change in the way in which we understand the world. Let’s hope that it is a lasting change for the better.
WLA Executive Director
 How COVID-19 Sparked a Silver Tech Revolution in China, Sixth Tone, 12 March 2020. Available via
http://www.sixthtone.com/news/1005303/how-covid-19-sparked-a-silver-tech-revolution-in-china (accessed 20 March 2020).
 Gartner HR Survey Reveals 88% of Organizations Have Encouraged or Required Employees to Work From Home Due to Coronavirus, Gartner, 19 March 2020. Available via
www.gartner.com/en/newsroom/press-releases/2020-03-19-gartner-hr-survey-reveals-88--of-organizations-have-e (accessed 20 April 2020).
 Gartner CFO Survey Reveals 74% Intend to Shift Some Employees to Remote Work Permanently, Gartner, 3 April 2020. Available via
www.gartner.com/en/newsroom/press-releases/2020-04-03-gartner-cfo-surey-reveals-74-percent-of-organizations-to-shift-some-employees-to-remote-work-permanently2 (accessed 20 April 2020).
 Illegal gambling sites lure punters with bets on new Covid-19 cases in S'pore, Malaysia, Thailand. Available via
https://www.straitstimes.com/singapore/courts-crime/illegal-gambling-sites-tout-bets-on-number-of-covid-19-cases-here (accessed 22 April 2020).
 Ukraine ‘ghost’ games fool bookies and punters as criminals pull off perfect crime. Available via
http://www.insideworldfootball.com/2020/03/31/ukraine-ghost-games-fool-bookies-punters-data-firm-criminals-pull-off-perfect-crime/ (accessed 22 April 2020).