This article aims to give you a toolset and hopefully mindset which will help in saving your store in an uncertain and slowing economy.
Because your store will be affected, if it’s not already. Production in Asian regions in uncertain or seized, delivery across borders is shutting down, and in the past days, it’s better not to even look at the stock market numbers. But there are solutions to get over the days coming ahead. We will not present some “big solution”? but a series of methods, tips, and examples for you. Let’s get started.
The most important thing for you to keep an eye on as a leader of your company and store is the safety and health of your customers, clients, partners and colleagues – than you can start working on preparing for your company.
What can we expect?
Basically, no one has any idea.
McKinsey came up with three different scenarios, and even the most optimistic one predicts a 23% drop in European and US GDP growth. Stocks are diving in a fashion not seen for decades, not even in the days when Lehman Brothers went under, and IMF already had to announce $50bn in emergency funding.
But this is not the worse. The worse is, we have absolutely no idea how long this will last, not even how severe the economic consequences could be. Tourism, catering, brick-and-mortar stores could be out of business for months with the restrictions and lockdowns. Travel and tourism alone is a 1.1 trillion dollar industry in the US, directly contributing to approximately 5.29 million jobs.
What can you sell, and for how long?
It’s time to re-evaluate your entire business model, even if you are not directly affected by the first stages of the economic crisis. There are basically two possibilities: as an online merchant, you are either selling physical products or virtual ones.
Virtuals products are of course affected much less and provide greater flexibility for your business. You may even experience an uplift in a time when tens of millions of people are confined to their homes and consequently, to the online space.
Physical products face some huge challenges in the meantime. Let’s have a look at them because if you haven’t already, you have to come up with emergency plans now for these scenarios.
Where is your source of production?
Ever since December 2019 businesses producing or purchasing their goods in China faced a terrible drop in availability. I personally know webshop owners who’s entire source of products was cut off in one day.
By the time of writing this article, China seems to be in a state of recovery, with factories opening up – but after more than 4 months of isolation and lockdown, even China won’t get back to full capacity in a few days.
What should you do?
As a given, if your supplier cannot deliver, you have to find another. I will assume that as a responsible merchant, you chose your previous supplier because they had the best quality/price ration. Switching likely means a lower quality or a higher price.
As you don’t want to offer lower quality, finding another supplier will cost you, and most likely you are not in a position to ignore the additional costs for weeks and months. But if you raise your prices accordingly, always communicate this to your customers, and be very honest about it. And rationalize the higher price for them.
Because here another factor comes into play. Small and medium-sized businesses compete with large companies on the market. Usually, this does not disrupt existing businesses, but in times like this, they become your direct competitors. And they have larger stock. A large ecommerce company can likely supply their customers from stock for months – while you have only weeks or not even that. In the short term, they are not forced to raise prices, they can play wait, but you can’t.
“Many just don’t have the resources to compete with a larger company that’s placing an order for 10,000 units versus their 500 units of product and they’re willing to pay a premium for those goods whereas many smaller companies may not be able to do the same. “ (Via)
So don’t just raise your prices, if you have to in order to survive. Increase the value you give, so the perceived value of your product will also be higher and match the price.
The extra could be a lot of things: free shipping, help with assembly or usage, guidance, customer support, gifts, discounts, points in your loyalty program and so on.
A highly relevant value-increasing massage could be for example if you make sure your customers know that you disinfect your packages before shipping them, and they can pay and receive them without direct contact with anyone. (A few more words on this in a moment.) Have a look at how Zenni, an online store selling sunglasses is handling this issue:
Incorporate these extras into the product and price in a way to preserve the cashflow. (Which, of course, means rethinking your business plan, or at least coming up with emergency scenarious which could be quickly enacted if your supply chain is disrupted.)
Can you even get the products? Or deliver them?
Even if production is unaffected, it doesn’t mean you can just be calm. In the past few days, almost all European countries closed down borders, airlines are canceling flights by the tens of thousands, even the EU is banning non-essential travel as a whole. In theory, this doesn’t affect logistics, but in practice the disruption is huge.
As Josh Behr, head of marketing at the Amerex Group put it:
Our future development for future deliveries expected in May, June, July, is already being pushed out a good 30, 60, sometimes 90 days. We’re currently selling outerwear for the next season and, as we make changes and those items are being made, we don’t have the ability to make them as quickly. We’re seeing factories opening up at 20-30 percent capacity from their normal workload.
And communicate all of this to your customers. Be calm, rational and helping: it’s the worst time to cause panic (or more panic), so don’t frighten them with stocks running out (this is a logistical challenge and a temporary one), and don’t try to profiteer on the situation. Of course, you might have to raise your prices, but do this rationally, as justified – and do justify it openly.
Let’s move on to the next issue: even if you have the production, means of transport and stock, how are you going to get the product to your customers?
Please note that while courier services are experiencing a boom right now, it is a very likely scenario that you won’t have access to them or even the post office for weeks or months – if not because they shut down then because how overloaded they will be. In a lockdown, you also can’t use pick-up points.
Finally, there is one other consideration regarding logistics: you may have to sterilize the products you deliver, and you definitely have to make deliveries no-contact. Take the steps necessary to protect your customers and tell them about these steps, so they can be certain they can order from you safely. For example, most food delivery services have already introduced contact-free delivery, like Domino’s:
Rethink your entire communication
Many companies are already in full crisis-communication mode – which is inevitable if you have to cancel events if you have to tell customers about how your product is virus-free or if employees start falling sick.
But this is only relief effort.
Life and business will not stop. You don’t have to put all your ads and content creation on hold, but you certainly have to rethink what your messages are. For example, it wouldn’t make much sense right now to advertise your luxury products to Europeans right now, when most of them are saving money, buying up products for their basic needs and focusing on getting through the next days and weeks.
Your other campaigns may not stay relevant in the coming weeks either – currently, every social platform, every news site, even niche sites, and groups are fully saturated with COVID-19. Hardly anything that is not relevant to the virus, lockdowns, cure research, economic consequences, etc. gets through. So your messages could just be lost in the endless flow of information.
For example, inboxes by now are full of emails regarding the virus:
I’m not saying you should stop all your campaigns, but you should keep a very close eye on their effectiveness.
Are you selling food products? Create recipes and tell customers what they should really buy to be prepared and how they can use it. Are you selling clothes? Write about how to stay healthy with proper dressing up – the last thing anyone needs right now is a cold. Are you a personal trainer? Create videos and show people how they can stay fit in their homes!
If you are a larger company, you have even more chances to help. For example…
- Microsoft made Office 365 trial free for 6 months.
- Adobe made their products free for 60 days and announced services to help students and tutors.
- DigitalMarketer opened up the DM Lab for free, for anyone.
The list goes on, and there is actually a comprehensive list of services being offered free during the outbreak at Bleeping Computer, so check it out.
If your product can actually help your customers, you are lucky – many could be jealous of Clorox for example, because the company can recommend their products for disinfection. But keep an eye on how they do that: they provide information on the pandemic and the virus, give advice on how to stay safe and use their products in order to do so. They are not mongering fear or panic, they are actually helping. It’s no coincidence this article has 96% positive feedback.
“With so much chaos around this outbreak, it is important that retailers not lose sight of the customer. Brands who go the extra mile to address customer frustrations due to the impacts of Coronavirus will make a positive impression on consumers that can only encourage brand loyalty in the end.” (Via)
Financial questions and your cashflow
You have to rethink your financial processes, because the pandemic will affect them greatly.
For many companies, their core business simply vanished in a matter of days. Event planning, tourism, catering, most of brick-and-mortar retail – currently, these industries are gone.
The guys behind the inOrbit conference were more creative than that: when lockdowns started in Europe, they “simply” decided to move the entire conference from offline to online, making it possible for every attendee to access the tracks regardless of where they are:
Now back to the financial considerations. You have a lot to do even is your core business is still intact:
- Postpone investments and expansion that is not entirely necessary right now. Furnishing the office, expanding to new niches, creating new websites or introducing new products might not be a good idea at this moment. (For others, a new website or a new product can mean the lifeline. THe point is: be rational about what you spend on.)
- Try recovering your debts to increase your flexibility.
- Rethink the timing of your plans: it is very likely that you won’t be able to meet your financial goals on either short- or long-term, so implementation will have to change too.
- Don’t shy away from investments that are rational. Your sales may plummet, your funnels may brake down, but this is also a time for long-term thinking. Introducing longer customer journeys, inbound methods to your business model now could mean that you have ready leads and customers by the time things start to normalize and you don’t have to rebuild from scratch. If your budget is flexible enough, move it around.
- Think very carefully about how you can manage your most important investment: you have to pay your employees. Keep in mind that it is the team that runs your business, and you have to keep it together even in the harshest of times. If you simply can’t, because you just don’t have the money for their salary, communicate with them actively and honestly. Tell them about the situation, search for solutions together, and tell them they will have a place waiting for them when the dust settles. Otherwise, you lose all the talent you built up in your team in the past years.
Speaking about your team…
Take care of your people!
Your team is the thing that keeps your business alive. Especially in an emergency, which the current situation is, globally. It’s a given that you have to surround yourself with people who you can trust blindly, people who are creative and flexible enough to handle a rapid change in the business model.
According to a study, 20% of home office workers in the US named loneliness, 7% staying motivated. In many cases even a few video calls, regular personal communication online can be a huge help.
Don’t monitor how many minutes your employees are working every day – if you can’t trust them, it simply means that you didn’t build a good enough team or you can’t manage them well. Instead keep an eye on their mental state, help and support them wherever you can, because you, and we all have to get through this together.
Home office: tools, software and preparations
Finally, we are going to recommend tools and software that you can use in the coming weeks if you and your team are in home office and want to stay productive.
Organizing tasks and tracking time
- Toggl: A great tool for tracking the time you spend on different tasks and projects – which can help you organize your thoughts in the changed working environment. And the basic functions are free.
- Odoo: A more complex tool for more complex projects and larger teams, with a lot of possible integrations and functions that can greatly help your business to move online.
- Asana:. A basic CRM tool that is free and easy to use, they even provide advice on how to integrate it into your work processes during the COVID-19 outbreak.
- Trello: Another free tool, which can be easier to use if you like drag&drop interfaces. It’s handy for organizing tasks with your team or clients.
We advise you to utilize the many functions of Google Drive and Microsoft 365. Your office work can be moved to the cloud almost entirely with the many different tools integrated in these services. Think of it as an investment, as if you have not been using one of them before, it’s the perfect time to start.
- Skype: simply, easy-to-use Microsoft tool.
- Google Hangouts Meet: a perfect tool from Google for online meetings, video conferences, easy-to-use even for beginners users.
- Zoom: the tool that we ourselves use for live meetings – it’s easy to send out invitations, meetings pop up in calendars and you can even get the recording of the meeting when you are done.
When you are moving your team to home office, you have to make sure that they have the actual tools for it to work – and if they don’t, it’s your responsibility to invest in acquiring them. The most important ones are:
- Laptops: many companies are bulk buying for days because they know that employees don’t necessarily have PCs or laptops of their own, especially suitable for office work. You might also consider installing VPNs for a safe connection.
- Internet: ask your employees if they have service providers and packages with sufficient bandwidth, and if necessary, buy more for the company laptops and phones, even sticks they can use to stay online.
- Mobile phone: in the case of employees who have to speak to clients, keep up the customer support, make calls about deliveries, orders etc. it’s vital to have company phones on them that they can use.
The most important factor: take care of each other
In whatever way you are forced to rethink and reorganize your business, the first and last thing you have to consider is the safety and health of your customers, partners, clients and colleagues. Help where you can, however you can, as a company and as a human being. The COVID-19 outbreak and the resulting economic fallout affects us all. We have to get through this together.