In this post, I'm going to show you EXACTLY how to bounce back post-pandemic.
In fact, this is the exact process that we used to grow retail store chains to 7.9% value growth.
So if you want to get more sales, optimize business operations, and grow your market share, then you'll love this guide on business recovery.
Let's dive right in...
The retail industry is all about selling goods directly to consumers. In terms of product distribution, retail is the end part. Here consumers purchase small quantities of products for personal use.
This industry is a vital component of the economy. It provides necessary goods and services to individuals and families. It enables shopping for desired products through contact efficiency. Retailers work through market forces. They employ a strict balance of supply and demand to thrive amidst adversity.
Retail stores vary in size, niche, and ownership structures. The main categories are store retailers, non-store retailers, and retail organizations. Store retailers sell their goods directly to people who visit their locations. Non-store retailers, on the other hand, offer sales outside physical locations. And retail organizations are companies that own franchises and chains of stores.
Store retailers include department stores, supermarkets, and small business owners. Retail organizations encompass everything from malls, franchises to chain stores. Non-store retailers work through direct sales, subscriptions, kiosks, catalogs, and e-commerce.
All these types of retail stores work in a competitive market, dependent on maintaining supply chains across the world. But Coronavirus disrupted the whole world, especially retailing.
COVID-19 is a pandemic that rocked the whole world. It overhauled the highly social way of life around the world. It also disrupted tight-knit supply chains across Asia and Europe. Aside from supply chain performance, consumer demand had several drastic changes.
The global economy expected to grow after overcoming the 2008 Financial Crisis. But all recovery gains dropped with the emergence of the coronavirus. The economy slowed in 2019 then crashed in 2020.
Countries closed borders and imposed stringent lockdowns. This strategy in fighting COVID is catastrophic for the retail industry. Most retail products are sensitive to the economic cycles. So any disruption in the flow of goods and consumer traffic reverberated throughout the industry.
Customer demands, though changed, drives the retail market. The phenomenon that reigned supreme is "emergency purchasing situations" (EPS). Panic buying ensued. Necessary commodities and staples such as food, water, alcohol, and tissue rolls, quickly ran out of stock. Those who could buy tolerated traditional deterrents such as crowding and extended waiting times.
For a clearer picture, here's a look at the Philippine retail industry in 2020. In 2020, Fast-Moving Consumer Goods (FMCG) sales volume and value declined across all regions in the Philippines, except South Luzon. Because of the quarantine restrictions, which started in March 2020, the average frequency of store visits decreased in the 2nd quarter of 2020. However, the limited mobility of households did not reduce the average spend per store visit. The limitations even let people purchase more, especially pharmacy and food essentials. Store visits decreased in almost all retail stores, except grocery/convenient stores and market stalls. For this reason, FMCG sales volume and value declined across channels (retail stores), but the supermarket is resilient as households spend more on each purchasing trip to supermarkets.
Even as the industry as a whole is resilient, retailers have to think forward. They should respond to shifting consumer demands. And pivot as necessary. The most vital way that retail business owners can take their business post-pandemic is digitalization.
Change is the only constant in the world. So if you want to survive, you need to adapt and evolve. This is key to the retail industry. Retail stores can not be stagnant. Lest be left into the dustbin of history.
Going digital is something all retail businesses should do. It's no longer the shiny thing. It can make or break a business. A poor digital presence is a top factor in the failure of many retail giants such as Sears, Toys R Us, and Blockbuster.
Internet retailing is the way to connect with the modern consumer. When before online shopping is an occasional pastime, it is now the norm. E-commerce became more prominent as the best retail platform because of the lockdowns. People cannot go to their favorite stores so they went to online stores. Everything from apparel to fresh groceries sells online. Thus, if you don't go digital, your business will not survive the pandemic.
Governments even include online shopping and home delivery as essential services. These retail stores especially cater to elder populations. They stay mostly at home due to the threat of COVID. For instance, the Chinese retailer Miss Fresh found a 237% increase in users over 40 years old in 2020.
Online shopping for all ages with buying power is much easier these days. Successful retailers run omnichannel operations, which integrate both offline and online processes. These innovative operations include mobile-first sites, dedicated apps, and versatile payment methods. People love online shopping because it is so convenient. Browse, click then check out to pay cash on delivery, by card, and more.
Unfortunately, the pandemic caused mass closures of retailers, big and small. Maintaining a physical location is harder without a steady flow of foot traffic. But there is hope for retail. Many stores that closed their physical stores began rebuilding with a small online platform. This pivot shows how much digitalization can help your business survive amidst all adversity.
Business Continuity Plan for Pandemic
In any crisis, you should prepare to solve issues. And protect your business from future damages. You need to prepare for any business disruptions that lead to lost revenues and fewer customers. Usually, businesses brace against the aftermath of natural and man-made disasters, such as storms, floods, arson, cyberattacks, and terrorism. Even financial and sociopolitical crises in the area where you operate your business are taken into consideration.
But then came COVID-19. The outbreak of coronavirus upended life. The pandemic presented several unforeseen challenges because it spread exponentially over a global reach. It affected business' operations, customers, and employees. So any retail entrepreneur should think of a business continuity plan (BCP). This BCP should include post-pandemic recovery.
A business continuity plan contains all business processes and workflows to keep the business running. And restore operations as quickly as possible, when after major disasters. Your BCP should be comprehensive, realistic, efficient, and adaptable.
Here are the steps to creating your BCP to bounce back after the pandemic:
1. Create a digital presence for your business. This step is vital to do in this time when lockdowns are everywhere. As previously mentioned, people will go to physical retail stores less. And stuck at home, they tend to use their phones to shop for what they need.
You need to focus your business on your consumer. Consumer-centric businesses adapt better than other businesses because they pivot to changing consumer demands. The poster child of the customer-centric business is Amazon and its founder Jeff Bezos' customer obsession. You need to keep consumers updated on any business changes so they keep their attachment to your business. You need to make shopping for your retail products frictionless, safe, and enjoyable.
You can start with creating social media pages for your business. This is free advertising for brand awareness and lead generation. We also recommend you give phone numbers for customers to call and order your products whenever, wherever they want.
Having this digital presence is a competitive edge. This edge helps you retain customer loyalty. Since consumers are most likely to shop at stores they patronized during the pandemic.
2. Organize a business continuity team. Select key managers and personnel to take care of business disruptions. Designate a leader who can move things forward and decide based on external and internal data. This team will brainstorm and craft the business continuity plan. Train this team to test and evaluate strategies as efficiently as possible.
3. Conduct a business impact analysis. Stay updated on the latest news and government regulations. Doing this can help you identify the risks and impacts of COVID-19 and other future disasters. These impacts include a lessened workforce, a slowdown in sales, and locations closed down. Collate your business data in a digital platform to keep everything in place and easy to evaluate. Analyze your business data and external situation with your business continuity team. Discuss current and future business impacts. And how to lessen or mitigate them.
4. Identify critical business functions and processes. Plan out how you can find resources to support them. Identify and document how to maintain these business processes. These processes include order fulfillment, supply continuity, inventory management, and customer service. Determine which areas of your business are high-risk. Map out dependencies. Then prioritize which business functions to give additional attention.
5. Go digital for open and transparent communication. A study by Sharma et al. (2021) states that collaboration efficiency is key to accelerating retail performance. Business owners and leaders guide their employees in uncertain times. So it's crucial to be open and transparent with your employees. Give as much detail, leaving nothing to misinterpretation. Show clear, straightforward steps. Consider the diverse perspectives of your employees, including the communication platforms they can use. Regularly update your stakeholders (employees, management, suppliers, customers, and government officials).
6. Pivot by digitizing your retail operations. Digitizing retail also means improving the business' internal structure by incorporating software systems for retail management. You can also use the web to look for alternative supply chains. Then once all your business data and analysis of external factors are in one secure place, you can assess your business health better. And look into raising more capital through investor funding rounds, debt refinancing, and bank loans.
By integrating data from multiple sources into a central repository or data warehouse, you can gain control of your data. Digitizing retail operations help you find root causes, timeliness of actions, infrastructure deficiencies, labor issues, and external environmental issues.
Move towards demand-driven operations to respond to rapidly changing consumer habits. Invest in websites for your retail store so people can order and pay at their convenience. Your retail operations also move faster as you stock goods based on consumer demands and shopping habits. You can even take advantage of branded apps and online marketplaces.
Datahyv has helped many retail businesses grow amidst pandemic-borne hurdles. Here's a look at the success of a supermarket chain working with Datahyv:
In the Visayas, supermarkets are growing even amid the pandemic while other channels are declining. Supermarkets' sales value growth rate in the Visayas region increased by 10% in 2020 from 8.5% in 2019. Retail stores are growing in all regions (Luz, Vis, Min) with a 7.9% growth versus 10% value growth in total Visayas Supermarkets, but there is still an opportunity to grow. Visayas-based retail has a 5.4% value growth in the Supermarkets channel.
This incredible growth during the difficult year of 2020 comes from data-driven decisions. Datahyv runs data warehousing and analytics solutions. We save retail businesses time and money thru holistic, actionable insights gleaned over business data.
Bounce back from the pandemic and other crises with Datahyv. Check out our optimized data solutions for retail businesses.
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