With working from home the new enforced norm and social gatherings banned, people have been turning to video conferencing software in their droves. And with all but essential shops closing their doors, online shopping and food delivery services advertised through social media have become more prevalent.

But as our latest Digital Commerce M&A Market Report shows, we’ve been on this trajectory for some time.

To mark the release of the report, we take a look at how recent trends in social media, marketing, e-commerce and gaming have all been leading to this point.

In little over a month, social distancing has achieved what many in the technology sector have been working towards for years.

As workplaces send their employees home, Zoom, Skype or Microsoft Teams have become an essential part of the day, hosting everything from team catch ups to essential briefings, news interviews and virtual tea breaks.

The UK National Health Service (NHS), faced with the near insurmountable task of caring for mounting numbers of critically ill patients, is expanding capacity by bringing telemedicine initiatives online almost overnight.

Suddenly, video chat software like Houseparty has millions of users, and the live streaming of everything from workouts and meditation, theatre shows and club nights is keeping everyone exercised and entertained.

At the same time, online shopping, which was already on the up before the current crisis took hold, has taken on a whole new level of importance.

Food delivery apps, like Deliveroo and UberEats, are helping to keep the nation fed for takeaway meals but also shopping deliveries. Small businesses are rapidly changing their business models, and, whether that’s breweries delivering beer directly to the customer or restaurants providing takeaways, it’s all being done online, via social media and e-commerce.

This digital transformation of business and personal life may feel like it’s all happened at once, but it is nothing new.

In fact, the pace of change in the worlds of e-commerce and digital marketing had already led us to combine the two sectors into a digital commerce category for our latest market report.

Over the last few years, social media has become social commerce, and marketplaces and e-commerce giants have become retail media. At the same time, e-commerce giants have been employing the techniques of the software marketing trade to reach their target audiences.

All of this has been brought into sharp focus by the current crisis, but the rapid evolution, spearheaded by consolidation, has been extremely apparent in the M&A space for at least the last six months.

Yahoo Japan, for example, acquired the online shopping company ZOZO for $3.9billon in an attempt to compete more effectively with Amazon. And with its £3million acquisition of Tumblr, WordPress’ parent company Automattic hopes to create a mobile-optimised blogging community that is receptive to online marketing. Even Louis Vuitton has been diverting ad spend away from traditional avenues and into online games platforms.

In short, the lines between social media and marketing, e-commerce and communication have been blurring for some time.

While COVID-19 has not increased digital commerce prospects overall as demand is temporarily stunted, it is fair to say it is accelerating the mechanisms of change.

As consumption and demand have dropped, companies are attempting to manage this by quickly adapting to online business models.

This is, at least in part, due to a shift in the balance of risks and benefits. Arguments about the possible dangers of social media, for example, have all but disappeared now we know it can be the only way to keep in touch with friends and family.

Companies that have resisted the onset of remote working because of concerns over productivity or technological literacy now have no choice but to give it a try.  And businesses that have been forced to close their doors and are teetering on the edge of bankruptcy have set up their Facebook pages and added “pay now” buttons to their websites.

It’s a shift that’s been driven by necessity, but whether it is permanent or temporary remains unclear. Much will depend on the success this new way of working provides to the thousands of businesses that are struggling to survive.

Will the world’s workforce, now more than aware of the possibilities and benefits of remote working, go back to the office where it is safe to do so?  Will consumers still choose to have their food and goods to be delivered to their doorsteps once the danger of “IRL” shopping has passed?

One thing is for sure, the sector has been given, and is embracing, a golden opportunity to demonstrate its value to customers and society.

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services. 

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