May 06 , 2020
The coronavirus, or COVID-19, has been declared a global pandemic and is having an unprecedented impact on people and our economy in general. We live in uncertain times, and while we don't have all the answers, we are doing everything we can to guide our clients and small businesses around the world.
At a time when retailers are forced to close their doors to combat the coronavirus outbreak, one of the biggest concerns (especially among "non-essential" retailers) is how to make up for lost revenue in the physical store.
Below, we'll share a list of resources as well as advice from our experts and internal partners, and describe the immediate actions that retailers can take to mitigate cash flow restrictions, respond to declining revenue, and redistribute. spending on digital marketing. You will also find examples of the actions that some businesses have taken in response to the coronavirus.
1. How to inject cash flow into your business
A. Promote gift cards
Gift cards provide retailers with an immediate cash injection and, in most cases, guarantee that a customer will return to your business in the future. For businesses with especially low margins, gift cards can help keep them afloat until the crisis passes.
To further incentivize customers, you can offer gift card discounts, or even collaborate with complementary local businesses to create co-marketing opportunities that can help you acquire new customers. Finally, to reduce the risk of human contact, consider implementing a digital gift card program to include in your social media and email marketing campaigns.
B. Develop a pre-sale strategy
Customers understand that this is an especially challenging time for local retailers. In this sense, initiatives proposed by the communities have been launched to support small local businesses and help them not to lose money. One approach has been to directly ask customers to pre-order popular products, either by paying a subscription or the full amount of the item.
C. Offer discounts on underperforming products
Nonessential retail will likely see a decrease in demand, making companies in this category vulnerable to having excess inventory. The main goal of retailers in the short term (4-6 weeks) is to ensure that they do not have money held in inventory or dead merchandise. Even in well-run companies, 20-30% of inventory is dead merchandise, so now is the time to address this.
- Use your inventory management and reporting applications to perform ABC inventory analysis to prioritize products based on the value they create for your business. Grade A items are the most valuable, Grade B items are the products that are "in the middle of the table", and Grade C items are the low value items that do not add much value individually, but together they represent hundreds of small transactions.
- Reduce transportation costs by liquidating Grade C products. Consider offering deep discounts on these items, selling them in bundles or combos, or even selling them to clearance retailers. This may seem counterintuitive to your business, but it will provide much-needed cash flow and leave room for inventory that does move.
2. Strategies to boost online sales
In times of social distancing and remote work from home, consumers are spending more time online than ever. Therefore, we recommend that you focus on what you can do with your online store and digital marketing to compensate for lost foot traffic.
Now is the time to review your marketing investment and improve the effectiveness of your virtual communications. Treat your home page as if it were a showcase and transfer part of the experience of your physical store to your product pages and social media channels. And don't forget about pay-per-click channels like search and viewing.
ADVICE: If you've closed your physical store, change your Yelp posts and Google Places information to redirect customers to your online store.
1. Connect with your high-value customers
Since approximately 20% of your customers contribute 80% of your revenue, consider prioritizing your high-value customers to ensure their loyalty for life.
Applications like Endear they act as a customer relationship management system and messaging platform all rolled into one. This way, you and your employees can stay productive while working remotely, allowing you to stay in touch with customers through text messages and email. You can send personalized recommendations and catalogs with links included to buy online.
Finally, consider add a live chat to your online store to replicate the personalized service that customers are used to receiving in the physical store.
2. Tailor your marketing messages
Over the next several weeks, brands must be sensitive to consumer needs and rethink their marketing and advertising strategies. That could mean pausing certain campaigns for certain products, and adjusting the content and creativity in the ads to better address the realities of the coronavirus pandemic. For example, it may not be the time to promote luggage campaigns with messages like explore the world when there is a global travel advisory in effect.e.
However, brands need to be careful not to stray too far from their brand's core messages, or worse, appear opportunistic. For example, the Easy Tiger Goods brand made some simple adjustments to its messages, to be in tune with this new reality, while remaining authentic:
3. Create "social experiences" on social media
In the absence of real-life experiences, customers who find themselves in self-isolation increasingly seek content and connection on social media. Therefore, brands must be creative about how to take advantage of their presence on social media.
From virtual showrooms to live streamed yoga classes, brands are tapping into their creativity on their social media channels to connect with their audiences.
4. Offer free shipping or local pickup and drop-off
Shipping cost is a barrier for online shoppers, so if you can, consider offering free shipping. Another option to avoid shipping costs is to offer to "pick them up at the gate." In other words, local customers can buy a product online and pick it up at your store (even if it's not technically open).
5. Extend your return and exchange policy
In these moments, empathizing with customer uncertainty can make a big difference. With stores closed, making returns and exchanges becomes more complicated, which could affect online purchases. Simply put, people don't want to stick with a product they don't like.
In this sense, given the current situation, extending your return and exchange policy could alleviate buyers' doubts and encourage online sales.