Crises, Habits, and the Acceleration of Technology Adoption!

It’s been over a month since many European governments made the decision to shut down in an attempt to contain the spread of the Covid-19 virus. The measures included children being sent home from school, bars, restaurants and shops closing, and office buildings emptying as people began working from home. Unlike anything the majority of modern societies have every experienced, it is easy to compare such severity of actions to those during wartime.

Luckily, humans are a very adaptable species. After a month of home-office, homeschooling, social distancing and online meetings, we have shifted our habits to a digital platform: having virtual drinks and social happenings with friends, watching online concerts, and increasing the amount of online shopping. Oddly enough, in such a short span of time, this has already started to feel like a new normal. 

One of the biggest takeaways we have gained from the Covid-19 pandemic is how digital services, in one form or another, have empowered us. This could be anything from social networks and e-commerce, to financial technology, online meeting platforms, e-learning and more. These types of services have already been experiencing significant growth and integration in our modern lives over the last few years. But the big question remains: what habits do we take with us as things gradually return to normal, and how will this accelerate digital integration?

Habits are context-behaviour that develop as we repeatedly experience rewards for a given action in a given context. Activities that are directly rewarding and engaging are normally faster to become new habits, unlike behaviour that are not engaging and only gives long-term rewards.

For many parents, who were born and grew up in the good old days, it has been challenging to watch and attempt to understand why today’s teenagers are so connected to their mobile phone or PC, often chatting with friends, gaming, or engaging with various social media platforms. Perhaps you have noticed that because the technology is so involving, because it is so social, it provides instant rewards and gratification. 

And so it seems that digital services are an underlying current, propelling much of our modern lives. Most of them require us to take an action and and engage on some level, which provides us with an immediate reward in the form of a like, a conversation with a friend, or a new transaction for instance. As many of already have heard or experienced, this behaviour is addictive, which explains the popularity and rapid growth of such services. 

Interestingly enough, this has led to a shift in the acceptability of these different services. An online meeting is now accepted and perceived just as well as a physical one, with the added benefit of saving travel time and costs; (leading to increased productivity). 

Recently, I caught up with one of my friends who works in the car business. He shared his feelings on going digital, and how it is saving him time and money.

“I just finished a one-hour online meeting with the car importer and the other car dealers. Usually, this meeting takes place in another city, where we all meet for half a day, and then spend the night out for dinner. Including travel, it usually costs me two days worth of work time, even though we just got the same done in that one hour. While it is nice to have dinner and wine with the other dealers, I’d rather have that dinner and wine with my friends and family.”

So, what can recent statistics tell us about how we currently are behaving? Well, we certainly are seeing a surge in the adaption of digital financial services, even as high as 72% when it comes to the use of fintech apps in Europe, according to research done by Levere Group. This is a direct result of growth in e-commerce, online banking and contactless payments, as people adapt to life under lockdown and social distancing.

This surge in e-commerce and home delivery has forced local business to adapt, setting up web shops and adding home delivery services in order to survive. For consumer goods like food, wellness, medical, cleaning and baby products, we see statistics of +100% growth rates from both the US and Europe. We ourselves have seen this in one of our portfolio companies, MyRevolution, who sells sports nutrition online, and experienced Black Friday-level sales numbers in March. On the other hand, the fashion industry and luxury goods are not performing so well, which might be natural considering the circumstances of widespread unemployment and layoffs.

When it comes to the demand for online video services such as Zoom, Hangout, Skype and Teams, it should come as no surprise that they have grown significantly. Most people must now use them, not only for meetings, but also for connecting with friends, colleagues and family. Zoom is an example of such explosive growth in video conferencing, where according to Reuters, Zoom’s daily active users have grown from 10 million to 200 million during the last 3 months.

To conclude, neither we nor the world will come out of these months the same. There will undoubtedly be a new normal. The crisis has forced us to try out new ways of working, learning and socializing which has, in essences, forced us to learn a new way of living. New habits will be formed, accelerating the adoption of different digital services. There is no doubt that there will be an impact, the question is just how big that impact will be. Depending on the severity and timeframe of the crisis, only time can give us the final results. 

Originally published May 2020. Updated February 2021.