HP Innovation Journal Issue 15: Summer 2020

NEW IDEAS OFTEN EMERGE OR ARE DEVELOPED IN RESPONSE TO EXTREME NEEDS ARISING DURING A SOCIAL CRISIS. increased by more than 50% compared with pre-crisis levels. On the other hand, apparel purchases have declined by more than 50%, and travel and live entertainment spending has nearly vanished. We should not expect that all of these shifts will stick, however. For example, there was a marked reduction in air travel after the 9/11 attacks, but it returned to its previous trend line within 15 months. Undoubtedly we will see some consumption patterns reverting to long-term trend lines, albeit at different speeds. We must distinguish between temporarily postponed, accelerated, or disturbed consumption, and new, more permanent patterns of consumption. Furthermore, we should not expect consumption to shift only between existing products. New ideas often emerge or are developed in response to extreme needs arising during a social crisis.⁴ World War II, for example, forced innovation or accelerated development and commercialization of the jet engine, pressurized aircraft cabins, helicopters, atomic technology, computers, synthetic rubber, rocketry, radar, and penicillin, with lasting effects. New needs born in our current crisis will likely drive lasting innovation in other areas, such as mass disease-testing technologies, digital collaboration tools, or affordable home office setups. We should not, however, expect permanent shifts to be easily discernible through observation and analysis alone. We cannot know for sure what shifts will persist until after the crisis is over, by which time pioneers will have already established leading positions. Pioneers will not only adapt to shifting needs, they will also proactively shape perceived needs and outcomes through innovation, education, and promotional activities. We can visualize the field of possibilities PURCHASING PATTERNS SHIFTING AS OUTBREAK PROGRESSES PERCENT CHANGE IN SALES VS. PRE-CRISIS, US INDUSTRY VERTICALS 100 75 50 FOOD DELIVERY APPAREL AND ACCESSORIES DIY AIRLINES AMAZON (EX WHOLE FOODS) AWAY-FROM-HOME ENTERTAINMENT 25 0 -25 -50 -75 Pre-crisis (Dec–Jan) 19 Feb 26 Feb 4 Mar 11 Mar 18 Mar 25 Mar 01 Apr 08 Apr 15 Apr 22 Apr WEEK END DATE Source: BCG GAMMA analytics, Earnest Research credit card data as of 5/1/2020 and BCG estimates INNOVATION/ SUMMER 2020 21

HP Innovation Journal Issue 15: Summer 2020 | Page 23