Product businesses must tread a difficult landscape without a map in this difficult era. Bouncing back may be tough with uncertainty over how the coronavirus will impact sales, but there are some encouraging signposts ahead, depending on where you live.
New Zealand, for example, eased some restrictions as of April 27, increasing the potential for eCommerce purchases even as brick-and-mortars remain closed. Some state governments in the US are looking to open non-essential stores (with restrictions) in early May. Other countries are working through how they will eventually re-open, at least partially, for business, balancing the challenge of keeping their people safe with the need to keep their economies active.
Opening doors will likely give retailers and wholesalers a much-needed boost. But as we all ease from lockdowns, we still face uncertainties. Disease experts foresee a need for intermittent social distancing restrictions through 2022. With the expectation of a second wave, particularly in the US, governments may very well need to re-impose lockdowns at a later date.
In other words, COVID-19 will be a long-term global state of uncertainty. The challenge to retailers and wholesalers will be finding ways to innovate, to be able to take that uncertainty in stride. It’s not easy, but product businesses have clear options post-lockdown to help get through the coronavirus era stronger and more resilient than before.
Stepping up after lockdown
Here are a few suggestions for taking your business through the coronavirus era, from getting ready for the end of lockdown to minimizing your costs in the long run. Of course, getting back to business starts with making sure the working environment is safe for your staff, following social-distancing and preventative measures instituted by your state or national government.
Stay in touch with your customers
As your local government eases lockdown restrictions, make sure your customers know you’re ready for business. The end to lockdown is a great opportunity to celebrate with them and re-connect, remaining sensitive, of course, to the possible impact that the situation may have had on them. This is a good time too to raise awareness about your business and products among potential new customers.
Use email and social media channels to announce any store re-openings, along with reminders about continued social distancing rules. In places where courier restrictions impacted eCommerce sales, tell customers when they can begin placing orders again.
Email campaigns can be particularly effective when you target specific customers using CRMs and email automation software like Salesforce and Mailchimp. If you’re new to email marketing, Salesforce provides tips for creating effective email campaigns. If you have access to customer phone numbers, texting can be even more effective as long as it retains that personal touch and frequency is limited.
Know what’s in stock
One thing we’ve learned from customers earlier in the coronavirus era is the benefit of doing regular, partial stock takes. (Watch full customer interview). No matter how your business was impacted in lockdown conditions, you don’t want to begin taking an increasing number of orders after lockdown without knowing what stock on hand you have available to sell.
Partial stock takes (or cycle counting) can help, and it is a good practice, anyway, particularly for retailers. It only requires a physical count of a portion of your inventory. One way to do it is, while your store is closed or your warehouse is quiet, physically count the top 10% of your inventory in terms of turnover or unit sales. This will give you an idea of what products you may need to re-order in the near future.
Optimize stock levels for changing demand
Many retail categories saw spikes in demand in March as countries went into lockdown and customers prepared for a long stay at home. But with so much uncertainty about the economy, those spikes were quickly followed by sales declines, and an end to lockdowns won’t necessarily change that. In the US, for example, consumer confidence dropped significantly in March and only saw a slight uptick in April (right when some state governments started to talk about reopening local economies).
This all makes it important to optimize stock in line with changing forecasted demand. This requires some demand planning, using sales data and current events to scope your purchasing more accurately. Our partner, Inventory Planner, provides a guide for inventory forecasting that can help. Adjusting your inventory planning to changing forecasts will save you money. You’ll be able to make better decisions in shorter timeframes about what you should order and what quantities are likely to be required to meet anticipated demand.
Use technology to reduce operational costs
Surviving and thriving through the coronavirus era will almost certainly require you to reduce the cost of operating your business. There has never been a more critical time to consider where inefficiencies are hurting you, especially if you’re running a product business with spreadsheets. For example, if you’re a small product business, take into account the time it takes to manually download orders from online channels, prepare orders for picking and shipping, update inventory in spreadsheets, and other tasks. Consider upgrading to technology that reduces overall administration and automates processes.