It’s day 49 since the first confirmed case of Coronavirus (COVID-19) in India came to light. As of now, cinema halls, schools, colleges, and offices are now closed as the best defence against COVID-19 is social distancing. But the monetary impact of this pandemic is visible on businesses across India, especially in the retail & restaurant sectors.
Prime minister Narendra Modi just announced a 21-day countrywide lockdown. Sitting at home for so long is a really scary thought, but as a business operator, it’s an even scarier thought.
All fashion retail brands & mostly restaurants (excluding some delivery restaurants) across India are shut down at the moment. That means 0 revenue for the foreseeable future. Which is a really really SCARY thought.
But, here’s the bright side. China, which is already at Stage-5 and observing a drop in the number of new cases, has started to experience a bit of an economic rebound. Retail stores are now gradually opening up and people are slowly coming out of self-quarantine.
“Apple opened 42 of its stores in China after being closed for about a month. Along the same line, Starbucks has initiated normal services in about 90% of its outlets across China.”
So I’m really hopeful that we can all be back in business in a month’s time.
Though the situation for each country is different, as a retailer in India we can learn from the businesses in countries that are weeks ahead in responding to the COVID-19 pandemic.
To help you better think through the progress of the Coronavirus, we looked at the impact on retail sales during the SARS Epidemic in China, (Earthquake, Tsunami & Fukushima) nuclear disaster in Japan, and the MERS Epidemic in South Korea. In all three cases, we observed three phases: Shock, Recovery & Stabilisation.
Currently, we’re in the shock phase. So right now, the best bet for Indian businesses is to prepare well for the next stage. That’s why we’ve found you the major learnings from businesses in China, to help you better prepare for the next stage.
“According to Quest Mobile, daily time spent with mobile internet rose from 6.1 hours in early January to 6.8 hours during Lunar New Year. It rose even further to 7.3 hours after the holidays, when workers were placed in self-quarantine.”
Due to the dynamic nature of an epidemic, it is very necessary for brands to plan how they will be acting as the situation evolves. Brands need to create strategies for multiple scenarios that may unfold.
And study data they have to better understand consumer behaviour. The road from discovery of the issue to learnings from it should be cut short by using less time to make decisions and implement strategies. For the process to be fast, brands need to follow CEO-led decision making to cut down on time spent during coordination and approval processes so as to not be slow during changing circumstances.
2. More than 40 restaurants, hotels and cinema halls loaned their workforce to “Hema”, a newly launched supermarket chain by Alibaba, which was in urgent need of labour for delivery services owing to the sudden increase in online orders. Restaurants are the most impacted business type during the COVID-19 crisis.
Due to the social distancing practice to keep the disease from spreading, many employees were unable to do their jobs. Some Chinese companies got creative and reallocated employees to other valuable activities. Such as, involving them in recovery planning and also loaned their workforce to other companies that were facing labour shortage.
3. Chinese brand Lin Qingxuan got 100+ of its beauty advisors to become online influencers who used online platforms such as WeChat to engage customers and drive sales. This creative idea was implemented after Lin Qingxuan was forced to close 40% of its stores during the crisis.
But, the online strategy became very successful and the brand registered an increment of 200% growth compared to last year. Due to the negative impact of COVID-19 crisis on brick-and-mortar retail, Chinese brands displayed agility and revamped their sales strategy temporarily. The main focus being to reduce the losses incurred while keeping the business afloat.
4. Cosmo Lady, the largest lingerie retailer in China, started a fun program. Under which, employees of the company will be required to promote the company’s products among their social circles. After 1.5 months of the initial outbreak, the country has started to observe initial signs of recovery.
With increase in coal consumption and congestion delays at 73%, in comparison to 62% when the epidemic was at its peak. It is easy to assume that people and their daily activities are now resuming. The extra time also got companies to act a bit creative towards their processes and understand how they can be a bit more agile when it comes to management even during normal times.
5. One thing that’s inevitable will happen is that the behaviour of the consumers will change accordingly to how the situation unfolds. For example, the SARS epidemic is often credited with increasing the adoption of e-commerce in China. Though it's early to analyse and predict which habits will get formed during the COVID-19 epidemic.
We can assume that companies involved in online education and collaboration industries will grow at a much faster pace as the effects of the epidemic decreases. Some agile companies are already planning around the shifts that are happening. Companies and partnerships with O2O platforms to take advantage of new consumer behaviours during the outbreak and beyond.
As the situation evolves further, the relationship between the customers and retail brands will come under much more friction. As of now, customers expect no kind of compromise on quality and service. Putting much more pressure on retailers to make it a successful proposition all the while working remotely. But, companies which will think creatively and display agility will be able to reap benefits in the long term.
We know, times are hard, but it’s very important that you take care of your family and your team. Spend this time with your loved ones, play video games with your kids, learn to play a new instrument, try to know more about your team members through video calls and understand them more as a human than they are in the office.
This too shall pass. Empathy with love will ensure it goes off smoothly.
Take Care, Stay Safe