How to survive the slowdown
With consumer confidence at a 50-year low and a looming recession, it’s undoubtedly a difficult time for retail. But as shops reopen, there are signs of hope. So, what can you do to protect your business during this uncertain period?
1. Communicate clearly with your customers
Keeping in touch with your customers is vital, says Brian Walker, CEO of the Retail Doctor Group: “In these periods, it’s about supporting communities and building the currency of trust.”
Whether you opt for e-newsletters, social media or a more creative approach (Cotton On recently launched lockdown playlists), the key is to encourage consumers to connect with your brand.
Customer service expert and mentor Jaquie Scammell says that now is the time for honesty, transparency and practicality.
Frank Green, the resuable cup brand, made the conscious decision to be transparent with customers about the challenges it was facing during lockdown. “Our business relies on café culture and obviously we were suffering,” says Jay Ong, head of digital and e-commerce. “So, we decided to share that vulnerability with them through our social media.”
During the crisis, Frank Green partnered with local tea and coffee brands to create limited-edition packs as a way to demonstrate the power of togetherness. “The ‘Better Together’ message really resonated with our community,” says Ong. Frank Green founder Ben Young also wrote an open letter to customers, announcing that the brand would be donating to Beyond Blue. He explained that having experienced depression, he wanted to help Australians who might be struggling with mental illness during lockdown.
2. Refine and pivot your offer
We’ve all seen inspiring examples of businesses quickly adapting, from gin distillers now producing hand sanitiser to local fitness studios turning to online classes via Zoom.
Identify whether you are able to pivot your offering or adapt the way that customers access it – for example, through contactless pickup or virtual consultations - and then communicate your pivot. If you’ve launched free home delivery or appointment booking, says Walker, let everyone know via social media or email.
And if customers aren’t coming to you, start using your social media channels more inventively. “You can put messaging out on your social media channels and test consumers’ responses,” says marketing communications specialist Ricci Meldrum, executive partner at TBWA Melbourne. “You should be constantly monitoring social media, looking for what users are responding to.”
Even if you’re a small brand, it is vitally important to have an online presence.
3. Cash flow is king: keep costs as tight as you can
Now is the time to manage your expenses more carefully than ever. “I’d tend to forecast conservative sales during the recovery, and keep your expenses conservative, too,” says Walker.
He suggests keeping informed about the types of financial support available to you. “Get across all the current government stimulus, and job and HR packages, and know that detail intimately.”
4. Get your stock moving quickly
“The big challenge for most retailers in the next three months is that everyone’s going to re-open their stores,” says Bill Rooney, CEO of retail consulting group 6one5. “There’s going to be two months, or more, of built-up stock they haven’t been able to clear.”
Unless you’re selling a very specialist product, you will likely need to start discounting both to compete and to boost cash flow. “If you’ve got products that are not selling, there’s no point waiting until June and then putting them on sale,” points out Rooney.
Much better to drop the price by, say, 20 per cent off the bat, than have to discount further later.
5. Look out for your staff
It’s crucial to ensure your team feels invested, as your staff are your best ambassadors - and recruitment is a cost you’ll want to avoid right now. “Just as the government talks about getting to the other side, as a business you’ve got to talk about how we as a team are going to get to the other side, and how we’re going to build it up,” says Rooney.
To maintain staff morale while staff work remotely, Adore Beauty launched a dedicated Slack channel for employees, and ensured that new and updated employee policies were shared and made available to everyone. “Keep it simple,” says head of campaign and strategy Shanthi Murugan. “Keep communication consistent, provide clear direction and ensure your employees know they’re supported.”
Frank Green marketing manager Sally Hankridge says that one of the brand’s best decisions was holding a “big brainstorm to share ideas” about its response to the pandemic. “It meant all the team was involved in planning the Better Together campaign, which helped build connection.”
Ong adds, “We’re proud of how we’ve approached these challenges,” says Ong. “They’ve helped cement the idea we’re a purpose-drive brand, and I think we know we can survive and thrive by pulling together.”
Larissa Ham is a freelance journalist and former small business editor for Fairfax
All references to any registered trademarks are the property of their respective owners. Afterpay does not endorse or recommend any one particular supplier and the information provided is for educational purposes only.