Businesses Get Sick Too as COVID-19 Sweeps the Nation
With supply chains from China all but cut, stock markets gyrating wildly and U.S. unemployment claims hitting record levels, there is a widespread perception that the coronavirus pandemic is utterly destroying business in America and other countries in the developed world. Such a view is not completely unfounded as the travel, hospitality, food service, and retail sectors take a massive hit due to both voluntary and forced changes in consumer behavior along with various mandated business closures and service limitations that have been emplaced.
Retail businesses are the foundation of the U.S. economy. Retail contributes about 25% to national GDP and supports 52 million jobs as the nation’s largest private-sector employer. The impact of disruption and chaos in this business sector is difficult to overestimate, and things are certainly looking grim in a sector that was already under siege and closing stores as the popularity of shopping and buying online soars. Now, shelter-in-place and lockdown orders are emptying streets and parking lots, giants like Macy’s, Nordstrom, Nike, and Apple are closing their doors, and Simon, the country’s largest mall operator, is closing over 200 shopping centers.
According to Ray Wimer, an assistant professor of retail practice at Syracuse University’s Martin J. Whitman School of Management, retailers that cater to wants rather than needs, for example apparel merchants and department stores, will bear the brunt of this crisis. “It took consumers about six weeks to start spending in the retail sector after 9/11 and about six months post the [2008] crash. Right now, there is so much uncertainty that we have no idea when consumer spending will bounce back,” Wimer says. “It really depends on how the government continues to place restrictions that help flatten the curve and when these restrictions will be lifted.”
The Picture is Not All Dire
A range of retailers are seeing a business windfall from the pandemic. Visits to brick-and-mortar outlets may be constrained by social isolation efforts, but this does not mean demand for essential commodities has slackened. There is soaring demand for fundamental goods, and merchants like grocery chains, discount and drug stores have not only been designated by the government as essential and exempt from lockdown, they are launching massive hiring campaigns.
The Kroger Co. wants to hire an additional 10,000 supermarket employees to meet surging demand for food. A strong uptick in online shopping is pushing Amazon to hire an additional 100,000 warehouse employees and increase hourly pay by $2 through April. 7-Eleven is anticipating a surge in mobile orders through its delivery app and expects to hire 20,000 employees to fulfill app orders for essential items like food, beverage and over-the-counter medications. Walmart plans to hire 150,000 additional staff and is offering $550 million in staff bonuses and a $2.00 an hour pay increase to ecommerce warehouse and hourly staff. CVS, Dollar General, PepsiCo, Papa John’s, and grocery delivery company Instacart are examples of other big retailers planning surges in hiring.
This all adds up to evidence that retail has not necessarily been dealt a death blow by COVID-19. In fact, for retailers who sell the right things in the right way, the coronavirus is bringing a boost in profits. The only question is how to position your retail business to get in on the action. With the right strategies, it should be easily possible to at least survive if not thrive during this unprecedented crisis. The team at Wodu Media is here to help businesses get through these hard times, and we would like to offer a few ideas to consider.
Adapting Your Retail Business to a Market Shaped by Coronavirus
The Covid-19 virus has caused a pandemic as determined by the World Health Organization (WHO) and is impacting large and small retailers with dramatically reduced store traffic, order delays, and supply chain issues. As the virus and its disruption continues to spread, companies need to take action to mitigate its impact. There are two areas where action is needed: keeping your team productive and maintaining sales.
To protect your team:
1. Build remote work capability. Millions of people already work remotely and it is very likely that your business can shift many jobs to remote mode. There are plenty of free tools that can be used to keep teams in touch and working even when they are not in the same office. Establish a remote work policy and schedule that outlines work and availability hours, communication methods, individual deliverables, and team production targets. For many businesses, working remotely will not really be that much of a change
2. Curtail travel and meetings. It goes without saying that business travel and conference attendance are not things that should be happening now if they are even possible. Cancel or face possible liability issues or at least sick leave requests if you send employees out and they come back with coronavirus. Hold meetings online or cancel them for the time being.
3. Allow your employees flexibility. Like it or not, the whole country is slowly moving toward the type of total lockdown now in place in New York and California. Team members are going to be dealing with children out of school or daycare, taking care of essential personal errands in conditions of constraint and limitation, and possibly taking care of sick loved ones. Be as understanding as possible and have plans in place to move staff around and plug holes when people are absent.
4. Be aggressive with cleanliness. With business slow and many people out of your facility, it is the perfect time to do a deep cleaning. Then work to keep things clean. Provide sanitary wipes near high-touch areas like copy machines, shared computers and phones, break room facilities, and so forth. If wipes are not available, use containers of bleach or disinfectant cleaner and rags. Consider contracting with a linen service to have clean supplies weekly.
To maintain your numbers:
1. Communicate with your suppliers, landlord, and customers. We are all in this together and communicating transparently is the best way to draw empathy. Keep creditors up to date on your financial situation, including any applications for coronavirus aid and special relief. Customers place higher value on the services and products you provide when they more about the work being done behind the scenes to serve them and the steps being taken to keep them safe.
2. Move as much business as possible online. With Amazon looking to hire 100,000 warehouse workers, it is obvious that online retail is coming out the winner in this crisis. Recent research indicates that 58% of Americans have made more online purchases than usual due to the coronavirus. But even with the upswing in online shopping, it still accounts for only 10.7% of total U.S. retails sales. There is plenty of room in the online space and it is looking like this pandemic could provide a lasting boost to ecommerce. Former holdouts will likely become converts; for example elderly folks who are most at risk from the virus. Even if your product is not suitable for online sales, think about developing your web presence into a powerful mechanism for attracting customers and completing sales entirely online, leaving only the delivery. Take car dealers as a model: many have already established remote procedures for sales and service with everything completed remotely then pickup and drop-off services carried out to customers’ driveways.
3. Be agile, keep things fresh, and look for new opportunities. Offer online specials and discounts. Provide new alternatives for pick up and delivery. Think about how you can supply what people may want and need when they are stuck in the house and working from home. Some businesses may be able to weather supply chain delays by digging into inventory and promoting items they already have to customers who may not have seen them yet. And always be on the lookout for entirely new demand areas that will be opening up.
4. Dial up your customer service. Be very responsive to your customers. Take their phone calls, answer emails, respond to reviews. Be honest and go the extra mile to make sure they are satisfied and happy. Depending on your product, it might be a good idea to build a house-call customer service capability. People are going through a hard time right now, and they will remember the companies that took care of them.
5. Maintain a future orientation. Realize and accept that the coronavirus pandemic is going to have a permanent impact on the way we live and do things. Sit down and make a serious, objective effort to visualize potential effects and changes in your business space. Then make plans to adapt going forward. Think out of the box – as mentioned above, you may be able to identify new and very profitable opportunities.
Creative, Flexible Retailers can Emerge from This Crisis Stronger
As a retail business owner, you are familiar with challenges and the realm of tough competition on an ever-changing playing field. Keep the current crisis in perspective by considering these numbers from Johns Hopkins Medicine: the common flu we all face each winter affects an estimated 1 billion people worldwide every year, with 9.3 million to 45 million cases in the U.S. alone and 291,000 to 646,000 deaths worldwide. In light of these figures, many of the economic shut-down measures we are currently experiencing may actually appear to be a bit heavy-handed.
Your business has survived other bumps in the road and it can survive this one. Make an objective assessment of your situation, calmly plan your strategy, and make the right moves without delay. There is one thing you can count on: going forward, successful companies will be marked by superior online presence and the ability to carry out as much of their work and business as possible in digital environments. Wodu Media can help you there – We have been working online and helping businesses do the same since 1999. Get in touch by chat, email, or phone (800-909-WODU) to see what we can do for you.