How are you being served? COVID-19 challenges business sector to innovate for future

While COVID-19 has impacted the service sector, it has also provided opportunities to innovate and transform for the future.

  • The service sector has been impacted considerably by COVID-19. But, the pandemic has also provided the sector with an opportunity to innovate and transform for the future.
  • Emotional, financial and information safety must also become a priority for the service sector in the post-pandemic world.
  • The international study identifies how businesses from wineries to airports have changed their business models.

As the adverse health, financial and social impacts of COVID-19 continue to reverberate across the world, an international research team suggests the pandemic could provide an unseen benefit for the service sector – the opportunity to innovate and transform for the future.

During the second quarter of 2020, the pandemic wiped out the global labour equivalent of 195 million full-time workers, most of them from the service sector.

The service sector encompasses everything from retail and banks, to health and social work, as well as media, recreation and utility supply. This sector represents more than 70 per cent of Australia’s GDP and employs four out of five Australians.

The new study, published in the international Journal of Service Research, suggests the COVID-19 pandemic has given the service sector no choice but to reform their procedures and offerings to make customers and employees feel safe.

This has led to alcohol companies producing hand sanitiser as pubs remained closed, and mental health providers taking their services directly to families, students and recently unemployed workers.

Researchers also outline that during a pandemic, safety requirements extend beyond the physical, such as the absence of injury or harm. This includes emotional, financial and information safety.

In the past, customers had to be present in person to receive the service. The rise of the internet led to a first wave of service separability, for example in online brokerage, banking and shopping.

However, the COVID-19 pandemic has brought new challenges, whereby home and automobile sales are being offered partially or fully online.

Dr Leonard Berry at Texas A&M University led this study titled ‘Service Safety in the Pandemic Age’, with support from Professor Tracey Danaher (Monash University), Professor Lerzan Aksoy (Fordham University) and Dr Timothy Keiningham (St John’s University).

“Making people feel both safe and embraced during a pandemic is tough because contact – customer-to-customer, customer-to-employee, and employee-to-employee – may lead to serious illness or even death,” Professor Danaher, a Professor of Marketing in the Monash Business School, said.

“Reimagining service design, strengthening organisational trust through information safety, and better understanding service separability – these new realities illustrate how COVID-19 is opening broad pathways for service research.

“Service safety was not a managerial or academic research priority before the pandemic. COVID-19 has changed the landscape for service organisation and opened a new, consequential opportunity for service researchers to lead the way.”

Professor Danaher says businesses are responding to this challenge by innovating their product offerings, which are likely to remain in the post-pandemic world. This includes a rise in telehealth doctor visits, museums offering virtual exhibitions and five-star restaurants providing online cooking lessons so families can whip up gourmet creations from the comfort of their homes.

Other service providers, such as wineries, have transformed the cellar door experience.

One Yarra Valley winery, Innocent Bystander, has recreated the cellar door experience by offering intimate and entertaining virtual wine tasting at home by live-streaming tasting sessions. Winemakers, sommeliers and cellar door staff have shared their passion for wine with customers, as if they were sitting on the other side of a tasting bench.

Other organisations, such as headspace, offer free access to its ‘weathering the storm’ meditations for people who have lost their jobs or for frontline workers during the pandemic.

Little things such as wiping down supermarket trollies, contactless delivery, social distancing, mandatory mask-wearing and deep cleaning are all ways in which the service sector is reducing the risks posed by COVID-19, Professor Danaher says.

“This pandemic has provided opportunities for the service sector to rethink how they conduct and deliver business – leading to innovation that not only makes everyone feel safer, but also improves the service experience in the long-term, regardless of whether a public health crisis is present,” Professor Danaher said.

“Above all, trust must be the central focus for the service sector. Organisations must reassure customers and employees that their physical environment is safe, that information is accurate and reliable, and that they can be trusted to deliver a safe and welcoming experience.”

To read the full article, please visit Monash Impact.