For the past decade, businesses around the world have been gearing towards building an online presence. With that, they were also sold ideas associated with tapping into the potential created through globalization, integrated markets and the demand for luxury items.
Little did anyone realize that we might end up with a system calling for social distancing, mandatory quarantines, with analysts looking at the genuine possibility of deglobalization. Regardless of how long the negative effects of the spread of the Novel Coronavirus aka COVID-19 last, it is time to reimagine your business in times of the Coronavirus.
The Need for Resolve & Resilience
While it might seem like doom and gloom for many businesses around the world. Many small-scale, medium-size, and large corporations are fighting back with innovative ideas to reach consumers and boost sales. McKinsey & Company has shared a model which consists of five steps for businesses to think and act around. This includes, Resolve, Resilience, Return, Reimagination, and Reform. The first two steps include short-term survival and cash-management methods to stay afloat, followed by more radical changes to survive in the long-run.
We have compiled a list of both challenges and potential solutions that small, medium-size and large businesses can adopt to survive and grow despite the challenges posed by the global pandemic of the Coronavirus outbreak and imminent recession.
What Types of Businesses will Suffer in COVID-19 Times?
Before we look at the type of businesses that will be most affected by COVID-19, we must realize that things might never be the same! Even if the Novel Coronavirus’s impact subsides, many industries associated with tourism, luxury items, and price-elastic goods are most likely to suffer.
Brick-and-Mortar Businesses
One of the worst affected businesses are likely to be brick-and-mortar businesses. This not only includes businesses like dry cleaners, small retailers, or your local bakery shop, but also the dentist providing services through a clinic or the courier service located near your house!
Business not Dealing in Essential Items and Services
It’s not just local businesses but ones functioning at a large scale that are likely to suffer. This includes car manufacturers, cement producers, airlines, banks, investment services, etc. For example, car manufacturers around the world were already facing a recession-like decline. The spread of COVID-19 is likely to make car sales even harder. Similarly, the entertainment industry such as theme parks and cinemas are likely to remain closed for a long time. As people cut back to spend more on essentials, they are unlikely to lease a new car or opt for a new house mortgage. People who are unable to pay back loans might end up having bad debts and possibly another credit crunch.
There have already been reports of various businesses laying off employees, sometimes even in the wake of government warnings to avoid doing so. On the contrary, many healthcare-associated companies such as private hospitals and medicine manufacturers are looking at a potential increase in their revenue. A recent CNBC report claimed that uninsured Americans can end up with a nearly $75,000 medical bill if they fall victim to COVID-19.
Businesses with no Online Presence
As people try to restrict venturing outside, an online presence for businesses has become even more important. While Amazon is finding it hard to keep up with demand, small retailers find f it hard to remain afloat. Interestingly, businesses already dealing with customers online are facing a rise in consumer engagement. A few examples include Twitter, Facebook, Netflix, Zoom, etc. While analysts have predicted a decline in Facebook ads revenue due to COVID-19, this is likely to be mitigated as more businesses look to sell online through popular platforms.
Businesses not Digitally Transformed
As people become cautious in their buying habits, it will not be possible for many businesses dealing with a lot of paperwork and physical processes to stay afloat. There will be a need to digitally transform businesses and processes and to find the means to make production processes free of hazards by emphasizing social distancing, disinfecting surfaces and ensuring that you can market your products digitally. Furthermore, there would be an additional need to convince customers that your product is safe to use. As the Coronavirus is known to spread through currency notes, digital modes of payment will be essential for businesses to survive.
Digital transformation will entail digitizing payrolls, modes of payment, employee expense management, and sales and getting rid of mountains of paper receipts, daily paperwork which needs to be printed, and switching to cloud-based solutions. Businesses that have already embraced those above have the potential to make use of their head start.
Businesses Dependent on International Trade
Obviously as people opt for panic buying, spend more on healthcare and save on essential items and services, this is likely to take a stakeout of other types of businesses. With a recession already announced by the IMF, a slowdown in the global economy is expected to reduce people’s purchasing power further, leading to the closure of millions of businesses worldwide The most brutal hit are likely to be businesses dependent on international trade. There was already a call for tightening borders due to the rise of populous regimes around the world. We have already seen this in the shape of the US-China trade war and Brexit. The Coronavirus is likely to hit international trade harder as large-scale manufacturing, tourism, and other service sector industries take a hit. In fact, China has already suffered a massive short-term impact of the Coronavirus, which has resulted in the permanent closure of 460,000 Chinese firms.
How to Return Business to Scale
There are several steps businesses are taking to return to regular sales. While some firms might be able to benefit from short-term panic buying, government bailouts, loans, and concessions on utility bills subsidized by the government in their country, returning your business to scale requires a detailed plan.
How to Enhance Sales in COVID Times?
Here are a few tips for incorporating your short-term and long-term plan for returning your business to scale and boost sales in COVID times.
Ensure an Online Presence
In the current scenario, you can differentiate businesses from those with have an online presence and those that don’t. For the latter, there is an urgent need to reach out to customers online. Be it through a Facebook page, website, or advertisement via Google Ads, or selling products using Facebook, banner ads, crowdsourcing apps, and the like. For example, suppose you’re a small-time retailer who is finding it hard to sell your products amidst quarantine. In that case you can get an account via a delivery service to get your products delivered to nearby homes on demand. You can also create your app or website to do this. For this purpose, you can do all the aforementioned digitally, be it hiring an app or web developer (such as through platforms like Upwork or People Per Hour) or signing up to partner with a delivery service.
Ensure Digital Payments Even for Physical Outlets
Many businesses have refrained from using digital payments over the years, be it a credit card terminal, PayPal, or online shopping carts. Some conventional business owners have relied on cash for a long time, including people looking to evade taxes or simply avoiding the hassle of digitizing. For businesses to survive, that will have to change. Not using digital technology might mean going out of business and a decline in sales. Companies will need to look for multiple digital payment modes to be available at physical outlets, such as QRCode scans, mobile wallets, e-wallets, online funds transfer, prepaid gift cards, etc.
Since COVID-19 can survive on currency notes, people might prefer digital mediums for payment, even when shopping at physical outlets. This is because while they can clean products after buying them from a store, they can’t quickly disinfect money.
Reach Customers at their Doorstep
People look to sell through popular platforms like Amazon.com and find services offering delivery in their area. Multinational companies like Foodpanda the wake of the Coronavirus pandemic, have partnered with local retailers and pharmacies to deliver products in nearby locations. If you’re selling items such as designer clothes, smartphones, electronic appliances, and other non-essential products, you can still use digital platforms for this purpose.
Provide a Personalized Service
Once the quarantine lifts in different countries, there will always be a demand for selling through digital mediums. People might be less likely to venture to shopping malls, markets, and crowded places but rather compare and buy products to be delivered at their doorstep. This can also be the case for various services. Someone might prefer a mechanic to come over to their garage to fix their car or pick and drop it after repair rather than going to an auto workshop.
The demand for grooming services, dry cleaning, and the like might also require a personalized touch. A dry cleaner might need to pick and drop clothes instead of expecting customers at his/her shop, and beauty parlors might need to give out online appointments to keep a minimum number of people on-premises to offer social distancing.
Look for Local Products, Inputs & Alternatives
Since international trade might not return to normal, at least for a while, it’s time to look for local products, inputs, and alternatives. Be it a local grocery shop, a couture boutique, or large-scale manufacturers businesses will have to look for local products and hidden gems increasingly. .
In recent years car manufacturers like Suzuki have suffered a decline in sales worldwide, whereas local manufacturers or businesses dealing in reconditioned imported cars have cashed in some countries. Analysts believe that this is because the company sells locally assembled cars that lacked quality inputs and features, whereas imported, reconditioned cars were cheaper and superior in quality. Similarly, local companies selling low quality vehicles were cheaper alternatives to the overpriced cars the company has been selling. Another chunk of the market was captured by better quality local car assembly companies like FAW in South Asian markets. Not only did the car manufacturer face closure in the U.S in 2012, but is also suffering a decline in South Asian markets.
A lesson here can help people understand the importance of switching to local manufacturers for inputs and alternatives. Relying solely on imported material was hardly a choice in recent years for many industries; this will further decline. Not to mention help high-quality raw material providers to flourish. In such a case, collective bulk buying by small-scale retailers can help.
Encourage Collective Bulk Buying
Since many small and medium-size businesses will find it harder to afford large orders, collective bulk buying can help businesses reduce costs. For example, two competing grocery store owners in a local market can collectively place orders to acquire bulk buying concessions and offer their customers products at a reasonable price. In this time of crisis, rivalries will have to be turned into, partnerships and helping each other can enable multiple businesses to survive the current crisis.
Conduct Webinars and Online Product Launches
Many large corporations are now launching their products through virtual, online events. There is no reason smaller businesses can’t do the same. Whether you’re providing a service to a local community or are launching a range of cheese-based products manufactured in-house at a bakery you own, you can have an online launch. People will now more than ever be engaged online for buying and ordering products. The COVID-19 crisis means that this is when you are the most likely to grab your audience’s attention. You can also create PowerPoint slideshows and short videos for a webinar or product launch.
You can get ideas for your webinar or online product launch from our posts about how to run PowerPoint presentations online, add offline and online videos to PowerPoint and record a presentation in PowerPoint.
How to Reimagine & Reform Your Business
There are speculations that the Novel Coronavirus’s current wave might not be the end of the pandemic. After a few months, governments might require periodic quarantines to control the spread of the virus until we can find a proper cure for the disease.
Online Team Coordination
Even during a quarantine, you can continue to interact with your employees to coordinate and strategize how to keep the business going. Be it future sales, delivery services to sell products, updates regarding customer interaction on your website, or your daily bookkeeping. You will require transforming how you interact with your team and make use of online team coordination. Many businesses have already switched to Skype and Zoom for this purpose. Whereas others are likely to find various other apps useful to suit their needs. You can make use of a range of cloud-based tools and apps for this purpose, ranging from Microsoft 365 and Google Drive to project management and web conferencing apps.
Outsourcing & Crowdsourcing
You can use outsourcing and crowdsourcing apps to provide home deliveries to your customers and hire individuals to perform various types of tasks for your business. A few examples of delivery marketplaces include Foodpanda, Hungryhouse, Talabat, Uber Eats, and Zomato. Similarly, a few examples of crowdsourcing services include Upwork, People per Hour, Ponoko, as well as customer trend benchmarking websites such as Trendwatching and Quri.
Social Distancing: The New Normal
Be it retail stores, beauty parlors, or banks;businesses will have to embrace social distancing as the new normal. This might not end with the Coronavirus, as social distancing might now be seen as a means of avoiding transmission of diseases, even the common cold.
Switching to a Less Risky Supply Chain
Over the years, many people opted for the globalization bandwagon. This meant selling fancy products sourced from overseas, and cheaper inputs imported from manufacturing powerhouses like China. Once the COVID-19 crisis hit, many countries began manufacturing their PPE (Personal Protective Equipment), ventilators, hand sanitizers, and face masks. This shows that the potential for local manufacturing was always there; however, countries had become accustomed to cheap products manufactured in countries like China.
It appears that the trend might pick up and will help local industries. There has always been potential for local and less risky supply chains. This can include supply from local manufacturers, setting up small-scale supply chains by businesses, neighboring countries and ones endorsed by the government; somehow, such as nations deemed as trusted trading partners by a government.
Keep an Eye on the Competition
As your business switches to or enhances its online presence, there will also be a spike in competition. Businesses that adopt sooner to the change might be better off in the long run. This means that there will also be a need to watch out for competition and adapt to changing market needs. As a business owner, you will need to observe what works for other businesses, and the type of service customers demand in coming days and adapt to it.
Emphasize on Product, Employee & Customer Safety
This is not just a publicity stunt but a very practical need of every business. Unless you can ensure your employees’ safety, disinfected products, and the safety of customers, you are unlikely to go very far with your business. A business once deemed as a super spreader is unlikely to survive in the market due to bad reputation. This goes for all types of businesses, be it small scale, medium-size, or large organizations. While the means of protecting everyone associated with a business can be hard to identify, businesses must do all they can and make sure their customers know about their efforts to build trust.
Final Words
Some analysts have equated the COVID-19 crisis with WWII and The Great Depression of the 1930s. Perhaps it’s a bit of both. What seems certain about the crisis is that it is likely to change the world in ways that are hard to predict accurately. Be it deglobalization, a decline of tourism, or local industries’ rise, a lot is still left to conjecture. However, what seems certain is the fact that businesses would need to adapt to survive. Not only is there a need for short-term strategies but also long-term plans to stay afloat. Moreover, companies would need to keep an eye on trends to be responsive to customer needs and the paranoia that follows this crisis. In the wake of the Coronavirus crisis, the policy of Resolve, Resilience, Return, Reimagination and Reform can be a good way to plan things ahead.
What is your opinion about our strategy to reimagine your business in times of Coronavirus? Share your thoughts and ideas with us in our comments section.
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