The COVID-19 pandemic is prompting rapid changes, which are transforming the ways we live, work and do business. Everyone, and every business, has been forced to adapt. As we begin to emerge from lockdown, pinning down certainties is still difficult, with fresh analysis of how the future may shape surfacing on a daily basis.
It is clear, however, that if you’re simply ‘treading water’ in the hope of things returning to how they once were, you are likely to drown. To survive, you need to be able to keep pace with the fast-moving transformations, to both commercial realities and consumer behaviours.
Conflicting information, changing dates and divers opinions can all make things difficult, but tough decisions need to be made, and often quickly. Fortune favours the brave – simply waiting for things to blow over can be disastrous. In reality, no one can predict what the future will look like, how long it will take to get there, or if, indeed, things will ever return to how they were last year. The changes happening today are likely to frame our future’s long-term landscape.
The pandemic has seen new groups embrace online shopping, looking to avoid putting themselves at unnecessary risk. However, while online sales have increased globally, by as much as 80%, it’s hard to see where the final figure will settle, but, behind the scenes, businesses have been adapting the way they do things in order to meet demand.
An emerging trend to tackle rising demand, is direct supplier fulfilment. John Lewis, for example, has asked suppliers to fulfil orders directly, as they have reached internal capacity to service rising demand for online orders. As high street shops reopen, social distancing measures will inevitably limit footfall, unprofitable shops will likely remain closed, and consumers will adjust to a very different retail experience.
New figures from IMRG[i], mirror this online surge, reporting how the health and beauty sector saw UK ecommerce sales grow by 31.6%, year-on-year, in Mid-March 2020. Similarly, the online sales of electricals in the UK increased by 42.4%, year-on-year. However, not all sectors have enjoyed rising sales, with the clothing industry seeing sales drop by 26.7%, year-on-year, as customers prioritise more essential purchases. Although, latest figures from the Office for National Statistics highlight that, despite retail sales dropping by 18.1% in April, the online proportion of those sales has increased from 19.1% to 30.7%.
Everyone is having to adapt quickly, so how can we build long-term resilience?
Don’t be afraid to ask for help – seek expertise and work closely with your stakeholders to determine all of the risks and opportunities you’re faced with.
For supply chains, it’s now about handling inventory and coming up with new ways to manage it and deliver it to your customers safely. The market is forgiving, people are accepting that brands need to adjust the way they did things before to protect teams and customers. There is room to think laterally, many businesses have already acted to divert resources, expertise and capacity to where they are needed most.
As teams are fragmented, it’s essential that every part of the businesses is involved in key decision making and invited to contribute ideas to aid long-term business survival.
Communicate with your supply chain and logistics partners – ensure customers, both new and old, continue to be served well, and have their expectations managed, in way that builds long-term brand loyalty.
Looking forward can be difficult when we’re all in ‘crisis mode’, but now is the time to make changes that will shape your business’ future for the long-term. Wholesale changes may not be possible but testing of new and adjusted approaches can happen now. There has never been more free training, knowledge sharing and advice available online.
At Cygnia, our customers are seeing dramatic increases in ecommerce sales, as new customers – who had previously shunned online shopping – are now expecting it to deliver. Brands need to build trust with those customers quickly.
Sometimes, changes will be tough – such as, delaying launches, redeploying employees, repurposing resources, reimagining packaging and sourcing solutions – but these decisions need to be made now. Confident leadership is crucial.
Retail’s seasonal norms have been disrupted. Planning for Christmas 2020 will be unlike any previous season – and it needs to start soon. High street sales are likely to be constrained and long-tail supply chains might need to be shortened. Achieving a very agile B2C capacity is likely to require outsourcing.
Brands need to act now. We know there will be shifts between retail channels, with direct to consumer likely to increase further. For some businesses, this may be new territory, but it provides access to valuable data surrounding product performance and customer feedback. Many suppliers will begin using online resellers, as a ‘halfway house’, for the first time. This isn’t something you can do in isolation – there is strict criteria and high standards need to be met.
One of the key lessons learnt from the 2008 recession was that those businesses that survived were the ones listening closely to the market – seizing opportunities and creating the products and services which would be relevant in the future. It’s not all about making sales. As a B2B business with significant change expertise, it’s about solving problems, being flexible and – ultimately – being creative. So, step back, simplify the complex, create value and design sustainable solutions.
The time to be proactive is running out. Working with others will held businesses to develop the survival strategies they need to preserve long-term success.
If you’re a medium-sized business looking to access new markets, new channels, or fast-track changes to your online service offering, get in touch with a member of the team, to see how we can help.