The new technology-enabled “normal” has rapidly expanded the market for innovative business models. … [+]
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Businesses of every size got affected by the sudden economic and social changes brought on by the pandemic. Those that could change and adapt, survived. Those that were unprepared, folded and left the market. And those that acted fast, captured business-changing opportunities.
During this period, several industries evolved at incredible speed and adapted their business models to keep servicing their customers and capture new ones. Technology was at the center of this evolution.
Suddenly, it felt like companies that most people had never heard about have quickly become household brands. The truth is, many of those companies have existed for years, many for decades, and just happened to be ready for years-long overnight success.
The new technology-enabled “normal” has rapidly expanded the market for innovative business models. In fact, studies show that in just a few weeks, we have jumped five years forward in consumer and business digital adoption. Today, three out of four first-time digital channel users indicate that they will continue to use them moving forward.
Here is a look at how five industries changed in the past year. Use the trend to evaluate startup opportunities.
1. Healthcare
As the most over-extended industry during the pandemic, digitization became an inevitable reality in healthcare. Telemedicine penetration increased exponentially, with 48% of U.S. physicians claiming to have treated patients virtually and 60% of patients expressing willingness to try telemedicine during the pandemic.
Teladoc, the largest telemedicine provider, experienced a 50% week-on-week growth as soon as the countrywide lockdown began. Furthermore, wearables, health monitoring devices, and remote diagnostics technology also gained traction, with tech giants like Apple and Google joining biotech pioneers such as Spry Health and Life Signals to develop sustainable solutions.
Subscription-based online therapy apps such as AbleTo, Talkspace, and Wysa also saw an accelerated customer adoption during the pandemic, as millions coped with a stressful new normal.
2. Education
More than 50 million students in the U.S. were impacted when over 91 thousand schools were closed in March 2020 to contain the spread of the virus. Although the education sector was already undergoing a digital transformation, with EdTech expected to reach a $350B market valuation by 2025, the pandemic accelerated this growth.
The adoption of digital learning infrastructure and remote learning services saw an unprecedented acceleration as students were left no choice but to continue their education online. Along with education management, online learning also saw a rapid adoption, with platforms like Udemy reporting a 425% jump in enrollments.
3. Retail
Mandatory lockdowns and social distancing norms negatively affected brick-and-mortar retail in 2020. The same economic situation fast-tracked the adoption of e-commerce and online retail as consumers looked for safe ways to shop.
Online grocery gained most from this, which until 2019, only represented 6% of the total grocery retail market. Major players like Amazon and Walmart automated their order fulfillment to keep up with the increasing demand. On the other hand, small retailers turned to third party automation solution providers such as Takeoff Technologies and personal shopper services like Instacart.
Going forward, augmented reality and virtual reality are finding mass applications in online retail. 3D rendering of stock and virtual recreation of the physical shopping experience is the future of retail.
4. Finance
The finance sector was already undergoing a steady transformation with FinTech solutions such as contactless payments, mobile banking, and online accessibility of insurance and investment services. The pandemic pushed everything into fifth gear.
27% of small businesses that remained open during the pandemic reported an increase in contactless payments. Digital banking also gained consumer adoption, with apps like Chime, Simple, and Revolut performing stronger than ever.
5. Entertainment
While the pandemic proved to be barely disruptive for the finance industry, the entertainment industry experienced remarkable growth in 2020. On-demand and entertainment services such as Netflix, Disney+, AppleTV, and Amazon Prime brought millions of new users into the fold.
Consumers sought virtual simulation of entertainment events like live concerts, festivals, gaming, and sports events, leading to mega-events like the AMAs organized and streamed online.
While video streaming traffic went up by 12%, online traffic for video games increased by 75%. Social gaming live-streams gained popularity as users sought exciting interactions while maintaining social distancing.
In sum, today’s bigger and fast-growing technology-friendly market will continue to boost venture initiation and innovation. The unprecedented rapid change in consumer behavior clearly revealed what people need. This is the best time to build a startup that addresses those needs.
