Two-thirds of Romanian consumers used at least one digital service during the COVID-19 lockdown, up ten percentage points compared to the pre-pandemic period, according to the “Digital Sentiment in Romania” survey conducted by McKinsey & Company. The survey, carried out by the firm’s local team, analyzes the online behavior of Romanian consumers and the digital penetration of services in ten different sectors: banking, insurance, grocery, apparel, entertainment, social media, travel, telecommunications, utilities, and the public sector.
The survey finds that the number of services accessed digitally doubled during the lockdown. “Prior to lockdown, the average Romanian consumer accessed between one and two different services online. During the quarantine, they averaged three to four”, says Alexandru Filip, Managing Partner at McKinsey & Company’s Bucharest Office and Leader of the firm’s Digital and Analytics Practice in Central Europe.
Online banking and telecommunications services were the most popular, with 38 percent of Romanians stating that they had used at least one digital service from these two sectors during the COVID-19 lockdown. Some 19 percent of respondents said that they used them for the first time ever during the lockdown. However, only 14 percent of Romanians engaged digitally with insurance or public sector services.
“It comes as no surprise that banks and telecommunications companies are at the forefront of consumers’ digital engagement. The significant investments and commitment to digitization already taken several years ago are clearly paying off. This is also a call to action for other sectors, especially insurance, where there is a clear business case for accelerating digitization. The digitized products and services offered can meet the growing public’s awareness of the need for long-term financial protection. The general public is likely to become more cautious given the experience of uncertainty and vulnerability reflected by the COVID-19 crisis”, says Alexandru Filip.
The survey also finds that the use of digital services is now significant across all age groups and geographies, not just early adopters – historically, young professionals living in large cities. Before COVID-19 lockdown, the 18-24 and 35-44 age groups led the way with regard to digital adoption. Thus, 69 percent of 18-24 year olds and 65 percent of 35-44 year olds used at least one digital service. Now, the figure for both groups is 76 percent. During the lockdown, the digital adoption rate has grown significantly for consumers between 45-64 years old, too, a group whose increased age-related medical risk creates a strong incentive to use digital services. In addition, 65 percent of Romanians living in small cities and rural areas used at least one digital service in the past six months.
Mobile phones are the main device used for accessing online services for 62 percent of Romanians. The survey found that once Romanians engaged with the digital experience, 37 percent of them were “very satisfied” and 56 percent “satisfied”.
Despite this increase in digital adoption by Romanians, there is still room for attracting more users to engage digitally. Compared to the countries in Central and Eastern Europe with the highest levels of digital engagement, Romania shows significant growth potential for online engagement in most industries. Thus, banking, insurance and the public sector could potentially increase digital engagement by a factor of 1.7 to 2.6, while utilities and grocery could increase engagement by a factor of 1.2. Some 31-52 percent of consumers who need services do not access them digitally due to obstacles such as complexity of use, lack of trust or unavailability of the service required.
To tap into this potential, companies should go beyond digitizing processes and make digital services simpler and more accessible, improving the user experience. They need to focus on fulfilling specific customer needs – even if this requires building a new product rather than digitizing an existing product (often created for a now outdated paradigm). To achieve digital excellence at scale for their services, companies across the board need to focus on two key factors: recruiting those rare individuals with a broad range of digital skills, and building a modern, largely traditional vendors-independent technological system.
“COVID-19 is first and foremost a global humanitarian challenge. We still do not know how the situation will unfold in the future. Companies around the world need to act promptly to protect their employees, customers, supply chains and financial results. The new normal of increased digital engagement brings changes for companies in all sectors. It is important that those companies now speed up their transformation and focus more clearly on digital channels. Simple digitization meets customers’ expectations but does not exceed them; as a result, it fails to create customer followership. Companies should aim for end-to-end digitization, including business needs as well as design thinking techniques, to improve the customer experience specific to each industry and achieve better financial results”, says Alexandru Filip.
The “Digital Sentiment in Romania” survey was conducted in May 2020 and included more than 1,200 respondents. Results have been adjusted so that figures reflect the overall Romanian population aged 18-80.