There is no doubt that Retailers, FMCGs and SMEs are having to come to terms with the fallout of COVID-19 and a future that is both uncertain and unpredictable. For many, the immediate future will be a single focus: continued survival. However, for others the period of lockdown, provides a pretty unique opportunity to contemplate how to emerge from the crisis stronger, better positioned and a more valuable business. Whatever the objective, it’s essential to take steps now to prepare the your business for the post COVID-19 environment, while not forgetting to look after your employees wider stakeholders.
The next few months will without doubt, going to be a challenge. Even strong, capitalised, well-managed businesses are going to have to work hard minimise the haemorrhaging of cash while maintaining continuity and investing to be ready for the new normal. Some previously viable businesses may fail as they face a period of zero revenue.
Others are manically coping with a spike in demand that lead to initial shortages. Others, such as some pubs and restaurants have already remodelled to provide take away services, but as yet are having to take orders manually as they haven’t yet caught up with online ordering. What is critical is creativity of thought and agility of implementation. However, it is important to apply efficiency alongside both creativity and implementation
Whilst the worst impact of Covid-19 is likely temporary, the economic impacts are likely to be long-lasting. As the world emerges from lockdown, business as we know it is going to be very different.
Online and direct to consumer businesses have experienced a significant uplift, with some estimating some 600k UK households trying online grocery shopping for the first time during March. Across Europe, the gig economy shopping models such as Glovo in Spain and Buymie in Ireland have seen demand. Online food delivery service, Takeaway.com reported a dip in order volumes in mid March in Germany and the Netherlands before ending the month with a higher run rate than January or February in both countries.
By comparison, many physical non-food retailers are likely to have to weather prolonged closures. Similarly, many hotels, restaurants, and bars are unable to operate in any resemblance of their previous model, until restrictions are lifted. Many consumers indicate they now expect to eat at home more often than before the outbreak. The high street has already become a very different place in a very short timescale.
Separating transient from structural changes will be critical to positioning your business to succeed in the new normal. Dynamically reassessing what will thrive in the new order will maximize your likely success as the recovery comes.
Asset valuations may have fallen and economic activity ground to a halt. Staff may be furloughed and the self-employed on enforced holiday, even if only to look after children while schools are closed. Now is an opportunity to draw up a plans for future investment or where partnership may be mutually beneficial. It definitely an opportunity to revisit previously lists of tasks, such as generic business planning, rationalising technology, re-writing websites and content, optimising in order to benefit from the opportunity when it comes. Businesses that act now are likely to benefit from the inactivity of others as we move into recovery.
Many companies will emerge to find their suppliers in as different a place as they are. For some the suppliers will not re-open; will their demise be the straw that breaks you? Some will therefore require a complete reimagining of their entire value chain. If the recovery get’s close to being as steep as the recession, will you and your suppliers cope? If at the same time you are moving to a reliance on technology or going online for the first time, have you resolved delivery, if you have a website for the first time, can you cope with the increased enquiries.
Do the next right thing!
There are many examples of consumer-focused companies making instant changes to support the fight against the pandemic, from Gin distillers making hand gel, clothing companies making PPE and engineering companies building ventilators.
As organisations prepare for the emergence of the economy it is more be more important than ever to be proactive, make decisions on best estimates and without full knowledge. Cash, costs, and continuity will vital. Cash used to be King, but it’s now more important that that! To emerge from lockdown effectively, ready to exploit the new normal, companies must prepare for the new order or risk losing the confidence of suppliers, consumers and investors alike.
There is no doubt, these are challenging times. Many of our norms and supporting systems for retailers and FMCGs, indeed business in general are strained. Survival remains a top priority. For many, this is an opportunity to re-examine one’s objectives in order emerge a stronger, more focused and more prepared for the new normal.
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