Steve Jordan talks to Wiebe van Bockel from Voerman in the Netherlands about the lessons we need to learn from COVID-19 and how the moving industry might look in the future.
“It became a roller coaster in mid-March,” said Wiebe van Bockel from Voerman, talking about the onslaught of the COVID-19 pandemic. “The government put a lockdown in place on Sunday night and we had to quickly work out how to get everyone working from home.” Although he said it was technically possible for everyone to work from home, it wasn’t going to suit everyone, and some more junior people needed supervision and training. “You don’t learn things working from home and some people just don't have the opportunity to work from home because of their family circumstances.”
In some ways the Netherlands remained quite open throughout the pandemic. The moving industry continued and Voerman was even able to operate in countries that were closed to their own industry. “We were able to go to France, Italy and Spain even in the midst of the crisis,” Wiebe said. But for Voerman, a move management company that derives around 80% of its business from the direct corporate business, business was always going to be tough for a while. Wiebe said that March was 25% down, while April was 50% lower than normal and May and June were not expected to improve much. The government support scheme paid up to a maximum of 90% of salaries, so nobody was paid not to work, and layoffs were not allowed.
Wiebe is expecting a barren season but with, perhaps, a late summer which he is predicting will bring business back to around 70%-80% of normal. “But we’ll probably see a drop at the end of the year because I don't see companies doing big intercontinental relocations. They will be in a hold position until there's a vaccine.” Within Europe, however, he’s expecting a better picture as the borders slowly begin to open again.
Wiebe sees what has happened as a fundamental change unlike anything we have seen before. Normally he would say that the industry usually does well in a crisis; but this is different. “9/11 was an event, but not a fundamental change,” he said. “This will change the principles of how we do business. I don't believe we'll go back to business as usual.”
So, what will be the legacy of COVID-19? Wiebe believes that the transformation will be largely digitally led. It’s been gently becoming more dependent on technology for some years but now we are in for something more dramatic. “Our industry will fast forward,” he said.
He is expecting there to be casualties because he doesn’t see there will be growth in the traditional business. He believes, however, that the companies that invest in technology will, at least, give themselves a fighting chance.
There will be a big emphasis on health and safety as well with all companies having a duty of care to employees and Wiebe says they will have big problems if that’s not taken care of. Sustainability too will become even more important. “We will really have to take drastic steps to reduce our carbon emissions, not just window dressing,” he said. Now that people have seen what can be achieved and the lockdown has demonstrated that people are prepared to accept major change if they can see the benefit, the pressure on companies to do the right thing will intensify. Voerman Group will launch a global initiative on this in Q3 this year.
One area that Wiebe believes will have to change in the future will be financial sustainability. He says that smaller companies will have no choice but to demand faster payment from their clients than they are achieving now. “For small businesses to be financing these big corporations’ payrolls is unhealthy and cannot continue. We must all agree with corporations to shorten that payment period. In the past we were worried about losing the business, but that’s just not an option now.”
Wiebe said that he thinks the RMCs will have a difficult time as well. “Their value proposition will have to change because the landscape is changing underneath them. There is less supply, less business available, and many of them already have financial challenges. Some of the better ones will be fine but the others will struggle.”
“Movers still have a mover advantage because we have the capital investment with trucks, warehouses and people,” he said. “But we will need to change ourselves quickly otherwise we’ll have to be super-efficient just to make a dollar.” Platforms for sure will lead the way in the international mobility world in years to come.
Standardisation and technology
Standardisation within the industry will be important and associations have already shown some initiative towards achieving this with IAM, FIDI and OMNI working together in this area. “If we're going the digital route we need standards in the industry,” said Wiebe,” and associations could facilitate this on behalf of us all. But they will need to collaborate and maybe even merge, to be effective. All associations will need to look at their costs to become sustainable and they will all need to look at their value propositions. I doubt we will all be gathered in San Diego this year (let’s hope so), but the way conferences have been run will potentially change fast as well with utilising new technologies.” Wiebe thinks that it also gives opportunities to companies to use technology to their advantage to increase market share and use networks to grow.
Has COVID-19 brought the Uberization of the moving industry closer? Wiebe believes it is speeding up and his company has already worked on a purely digital offering for one of its major clients. There is also a major Dutch insurance company that has seen opportunities in the moving industry as it feeds many of its own products creating an obvious synergy. “I think we are only two-three years away from outsiders of our industry having an ‘adult’ product,” he said. “There will be other initiatives coming for sure.”
A conditional service
One switch will be towards a more conditional service where the terms of the service provided vary with price. “It will be like the airlines or the hotel industry,” said Wiebe. “You have much more flexibility when you sit in the front of the plane and the level of service at a five-star hotel is higher than at a three star. I think that will come in the next six to twelve months. But we will need to develop better personalisation (personas), not just digitalisation, so we can match services with people. So far, all our industry has been able to give a Hilton or Marriott service, which is confusing for the people who normally stay in a Holiday Inn Express or The Four Seasons. Companies will have to decide where they want to be. The industry will need to separate the budget from the premier.”
A unique opportunity
Wiebe said that there will be winners coming out of this crisis. Those will be the companies that invest in technology and make sure that they are sufficiently agile to manoeuvre. “This is a unique opportunity in our lifetime,” he said. “We need to make use of this time.”
He said that Voerman is doing extensive training during the quiet period and is speeding up IT projects. They are moving from simple video surveys to complete video consultation and pushing the projects forward while they have the opportunity during the crisis. “It is a good opportunity to reflect on what we're doing. This is also a great time to make sure you have the right people in the right place. Some of our staff have really stepped up in the crisis and done extraordinary things for colleagues. It’s been very rewarding to see. I think people are more social, more collaborative these days. But people are also understandably worried about their futures so we are seeing a different side of them that we wouldn't see in normal times. In this crisis there is nowhere to hide. Everybody is in the limelight.”
“This is a great time to show value for our company and for our people,” said Wiebe. “This is a people industry and if we step up and work together, I think there's a bright future. It will change and people generally don't like change. So, we must start the conversation about how, potentially, it will look. It’s time for the industry leaders to do some leading and give us the direction we need.”
Photo: Wiebe van Bockel