Lights and Technology
08 December 2021

The So-called Traditional Sectors in the Digital World

Are we really prepared for this transformation?

By Ricardo Rocha, Marketing & Communications Director at Noesis

Much has been discussed about the transformation opportunity that the covid-19 pandemic has brought to organizations. In the area of technologies, everyone talks about digital acceleration and the "10-year technological leap". Companies, with their closed offices, have had to reorganize. 

Telecommuting became widespread, processes were modernized and automated, and business models were reinvented. We are living the Digital and "hyper-acceleration" hype, which has gained even greater preponderance in consumer interaction with services and products in a period of social isolation. Consumers and customers have adapted to new relational and transactional models with organizations. Can we, therefore, say that confinement has helped the corporate world to evolve?

The truth is that not all sectors follow the same pace of evolution. Many of the so-called traditional sectors have suffered great difficulties in this period due to poor exposure to the digital context and/or little digitalization of their business models, thus causing the closure of several businesses and, consequently, the loss of numerous jobs.

For example, if we look at the footwear sector, we see that the pandemic context caused the cancellation of numerous fairs around the world, seriously damaging the entire industry. According to the Portuguese Association of Footwear, Components, Leather Goods and its Implements (APICCAPS), approximately 70% of the sector was stopped, and exports decreased by 20%, resulting in a decrease of 60 million euros compared to the previous year. Despite everything, the brands in this sector have already presented their products in the digital, with online commerce services and home delivery. Still, this digital presence was insufficient to support an industry that exports more than 95% of its production to 163 countries. This data puts me to the following question for reflection: Why do footwear fairs continue to represent such an influence in the sector amid the "Digital Transformation" era?

Another example is the book sector, which, despite being one of the traditional sectors that have most quickly adapted to digital - through distributors such as Fnac, exclusively digital bookstores such as Wook, or global commercial platforms such as Amazon - has recorded a loss of approximately 35 million euros since the beginning of the pandemic. In this sense, the question arises again: Will "Book Fairs" and similar events continue to be fundamental for the sector's sustainability? The Independent Book Network (RELI) states that bookstores and book fairs are seen as a meeting point, proximity, and humanization between authors, books, and customers.

Finally, let's also look at the textile industry. The Associação Têxtil e Vestuário de Portugal (Textile and Clothing Association of Portugal) states that during the confinement, the sector recorded an 18% drop in production and a 14% drop in business volume, resulting in the loss of 5000 jobs. Despite efforts to boost e-commerce and the digital growth of many brands, investing in new channels and marketing strategies, such as Influence Marketing, this strategy has not yet proved sufficient to face a store/retail closures scenario. Does this mean that large commercial surfaces are still indispensable to the sector?

It is fundamental, in an era where so much is said about information technology, digital transformation, e-commerce, among other topics, that companies from more traditional sectors continue their transformation journey, adapting their methods, operational and business models, to the new context, market, and consumer demands. There is still a lot of work ahead. We all realize by now that "new normal" will be little "normal" compared to the pre-pandemic period. Increasingly, we will live in a hybrid regime, where digital will play the leading role, both for businesses and consumers.

Published (in Portuguese) in Dinheiro Vivo