As of December 27th, 2020 the Paycheck Protection Program is back, and Biz2Credit can get your business started with an easy process to help you get funded quickly.
As 2021 progresses and we look back, there is no doubt that 2020 was a tough year for businesses of all kinds in the United States. COVID has and continues to wreak havoc on select industries, testing and stressing supply chains and putting small businesses and their owners on edge.
Many “Big Box” stores figured out a way to thrive during the pandemic, using their size and strength to quickly shift their safety practices, while delivering tons of essentials to customers. For example, Target had a record-setting 2020, blowing away analyst estimates with record same-store sales growth, according to Forbes. They, like many other retailers, also reached a record high stock price, thrilling Wall Street. However, many small businesses had a more challenging time. The US Chamber of Commerce performed polls that determined that many small businesses underwent a temporary or permanent closure. Of those businesses that haven’t closed, many are worried they may have to close.
Although small businesses are clearly different from “Big Box” retailers, there are some techniques and trends that apply to both worlds. There are lessons that small businesses can learn from Big Box retailers that may be useful throughout the final months of the coronavirus pandemic and beyond.
Use COVID as an Opportunity to Digitize and Go “Touch Free” to Support Social Distancing
Many large retailers used coronavirus as an opportunity to invest in technology that allows for contactless checkout or app-based interactions that make shopping easier and safer for customers. In Pittsburgh, the large grocery store Giant Eagle created a checkout-free “Scan-Pay-Go” option for customers that allows you to skip the checkout line. Other companies like Walmart have invested heavily in no-contact curbside pickup.
Even customer service has shifted online: Apple did everything they could to transform their “Genius Bar” sessions so that they could be completed online at their customers’ convenience. Investing in technology and convenience options like this can increase efficiency, improve customer satisfaction, and allow your employees to focus on other necessary tasks.
The “Big Box” retailers have socialized customers to these new ways of shopping and interacting, which are now ubiquitous, making it easier for you to bring them to your small business. If you don’t already, it may be a good time to explore bringing contactless payment or app-based shopping options to your business.
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Mobilize Your Supply Chain for the New Normal
Companies that thrived throughout COVID often had robust order management systems (OMS) that could integrate data about demand, purchases, stock outs, shipments, and other metrics in their supply chain ecosystem. These systems lent insights to how retailers could best adapt their business models to the abrupt changes taking place. Some companies even brought their order and inventory management expertise to local municipalities to help manage demand for essential PPE.
A takeaway for small businesses is that it may be time to invest in an order management system, even a simple one, to provide insights necessary to adjust supply chains in good and disruptive times. While hopefully many things will return to normal after the pandemic is over, there is no doubt that many disruptions that shifted businesses to rely on technology in new and innovative ways are here to stay. As such, small business owners should be thinking about how they can adapt both now and for life after the pandemic.
Additionally, other big box stores found success by prioritizing within their supply chains. COVID demand initially caught even Amazon off guard, and they initially struggled to fulfill orders. They decided to announce that they’d be prioritizing certain products over others. They communicated this change to both customers and their third-party sellers. Small businesses should realize that prioritization can be good during a period of rapid change, especially when it is communicated clearly to partners and customers, which have much smaller inventory and stocking capacities than Big Box retailers.
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Adjust Advertising and Content Delivery to New Consumer Preferences
In many ways, COVID has pushed businesses large and small over their largest technology hurdles, particularly in marketing and content delivery. Many Chief Marketing Officers shifted a significant amount of marketing focus to social media.
A report from “The CMO Survey” report showed that marketing investment in mobile and social media “spiked during the pandemic at 70% and 74% growth, respectively.” Marketers are clearly responding to customers spending significant time online and on their phones during lockdowns and COVID restrictions.
In response to such a major shift online, Disney announced that they would shift their primary focus to streaming. In August, App Annie released a report showing that in the first half of 2020, consumers spent 1.6 trillion hours on their phones. Customer interest in purchasing online through e-commerce also grew dramatically during 2020. The big shopping day Black Friday looked a lot more like Cyber Monday this year.
In Q3 2020 alone, according to the Commerce Department, consumer online purchasing grew 37.1% from the same quarter of the year 2019. For small business owners, if you haven’t already, explore opportunities to take advantage of these trends by advertising on social media for the first time, providing opportunities for consumers to interact with your business digitally, and investing in an e-commerce platform.
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Seek Financial Support from All Angles
Retailers of all sizes have had to seek out additional financial support during the pandemic. Whether through paycheck protection program loans, disaster loans, or private loans, businesses often turned to debt as a way to protect their financial security. There are also private sector programs and local government programs currently in operation to assist small businesses in their fight to survive during these challenging times.
However, as the pandemic begins to wind down, small businesses can expect these opportunities to continue to dissipate and eventually disappear. As such, if you think you need assistance, now is the time to act. Don’t be ashamed to take advantage of these programs which are designed to help businesses succeed during good times and bad.
Gift cards are also a financial tool that retailers large and small have used creatively throughout the pandemic. Gift card demand actually grew during COVID. Prepaid technology company NGC found that gift card demand grew during the COVID pandemic, with Big Box retailers making up 31% of the demand. Gift cards can be an excellent way for businesses large and small to amass cash flow before delivering actual goods or services, which can help support a business’ cash flow during a period of uncertainty. If you are a small business, now may be a great time to pursue a gift card product option for your customers to provide some much-needed cash flow.
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And finally, one additional way large businesses have taken charge of their finances is by renegotiating vendor contracts and closely controlling their accounts payable and receivable. While Walmart may have the resources to use Artificial Intelligence to renegotiate all of their supplier contracts, small businesses can take this as inspiration to return to supplier contracts one-by-one to get better deals heading into next year.
It is true that even as week look back at some of these trends from 2020 that are continuing to shape 2021 and which will undoubtedly shape the future of commerce, there is still a lot of work to be done to get out of the pandemic. However, even though we are not out of the weeds yet, this does not mean that you cannot be thinking proactively about both the present and the future.
It is important that small businesses act smartly and deliberately now so that they can ensure they are on a strong and sustainable footing as we exit the pandemic. By thinking about how the pandemic has reshaped business, as well as how trends in Big Box retailers might work their way down and impact small businesses, you can make sure you are setting up your business for success in the future.