Pratikkumar P. Gaikwad | 10 min read | Sep 22, 2020
Coronavirus, or COVID-19, has been declared a global pandemic and has an alarming influence on humans and our whole economy. Times are complicated, and while we don’t have all the solutions, we’re doing what we can to give advice to our clients and small businesses around the world.
One of the main issues (especially among “non-essential” retailers) is how to pay for lost in-store sales, as retailers are forced to close their doors to prevent another COVID-19 outbreak
Below, along with guidance from our in-house experts and collaborators, we will share a list of services that share quick measures that retailers should take to mitigate cash flow constraints, respond to revenue declines, and redeploy digital marketing expenditure. In addition to COVID-19, you can also find examples of the actions that other organizations have taken.
2. How you can inject cash flow into your company
Underperforming inventory discount
Non-essential retail would likely see a drop in revenue because companies in this segment are vulnerable to oversupply. Retailers’ biggest objective in the short term (4-6 weeks) is to make sure they aren’t sitting on cash held up in inventory or deadstock. And well-run firms will have a deadstock of 20-30 percent of the product, so now is the time to fix it.
- To prioritize items on how much value they generate for your business, use your inventory tracking and/or monitoring apps to do an ABC inventory review. A-grade products are the most important, B-grade products are “middle of the road” goods, and C-grade goods are low-priced goods that do not add any value individually, but account for hundreds of small transactions collectively.
- Reduce the cost of shipping by supplying C-grade goods. Consider heavily discounting, bundling, or even selling these products to liquidation retailers. This may sound counterintuitive to your company, but it will provide you with much-needed cash flow and make space for stock that moves.
Develop a pre-order strategy
Customers recognize that it’s a particularly difficult time for local retailers. Community-based programs have taken off to assist local small businesses to help them pin down dollars. One solution was to explicitly ask consumers, either by paying a deposit or the whole sum, to pre-order famous items.
Extend payables to providers
Decreasing costs is the other side of cash flow. Taking longer to pay suppliers is one way to hold on to working capital. In order to preserve the integrity (and longevity) of supplier relationships, we recommend that retailers work as soon as possible with their suppliers to establish an agreement with which they can both live in the short term.
Promote gift cards
Gift cards provide retailers with an immediate infusion of cash and (in most cases) ensure that a customer will return to their business in the future. Gift cards can help you stay afloat until the crisis passes, for companies with, particularly thin margins.
To further incentivize customers, you can discount gift cards, or even collaborate with complementary local businesses to create co-marketing opportunities that can help you acquire new customers. Finally, to reduce the chance of human interaction, you should allow a digital gift card service to use in your social media and email marketing strategies.
Cutting expenses for shipping
Shipping costs will eat away at your margins, so we suggest the following if you are trying to cut back:
- Fulfill orders manually where appropriate.
- Avoid the fancy packaging.
3. Strategies for improving sales online
Since customers are socially isolated and work from home, they spend much more time online than ever before. In order to compensate for declining foot traffic, our advice will be to concentrate on what you can do with your online store and digital marketing.
Now is the time to reconsider your budget on ads and maximize the efficiency of your automated communications; approach your website like your storefront and move some of your physical store experience to your online sites and social media platforms.
Reach out to your high-value clients
Because 80% of your sales are generated by approximately 20% of your consumers, consider prioritizing your high-value customers to ensure their lifetime loyalty.
Visitors will have concerns about shipments and delivery on your website, the timeframe for your website to resume operations, how well the facility is sanitized, and much more. Provide the website with a Whatsapp chat option so that they can quickly connect to your support staff that can help answer the queries. You can install your website’s free Whatsapp chat module here. You may instead use Shopify’s Facebook messenger channel to deliver automatic message answers to customer requests if you do not have a customer service resource. This channel attaches ‘Message Us’ to the Messenger icon on your website.
Your consumers can opt-in at the checkout to get Messenger notifications from your store after adding the Messenger sales platform in your Shopify admin. You should install this app if you are currently using the Facebook Messenger system and you want to deliver some marketing messages or major bulk notifications to your current customers (those who have subscribed to receive alerts on Messenger).
Tailor your communications for ads
Brands need to be alert to the wishes of customers over the coming weeks and reconsider their promotions and ads. In order to best speak to the reality of the COVID-19 pandemic, that might mean pausing certain advertisements for certain products and changing the copy and design on advertising. For example, when there is a global travel alert in place, you do not want to promote luggage promotions with “wanderlust” branding.
However, marketers should be careful of pivoting too far away from their main brand messaging, or worse yet, as opportunistic.
Build “social interactions” in social media
In the absence of “IRL interactions,” consumers who are self-isolated are constantly turning to social media for content and interaction. Brands should be innovative about how to exploit their social media activity.
From immersive showrooms to live-streamed yoga lessons, companies get creative with their social media platforms and tap into their already devoted viewers.
Free shipping or convenient pick-up and delivery deal
Shipping prices are a deterrent to online shoppers, so try providing free shipping if you can. Another way to escape delivery costs is the “curbside delivery” way. In other words, local consumers will order a product online and pick it up from your store (even though you are not officially open).
Extend the strategy of return and swap
Empathizing with the uncertainty of clients can go a long way on the subject of sensitivity. Returns and exchanges are growing more complicated in the context of shop closing which could prevent internet sales. Simply placed, consumers don’t like a commodity they don’t want to be stuck with.
In consideration of the current economy, expanding the return and exchange policy could mitigate customer concerns and stimulate online sales.
4. Revisit your plan for commercial ads
Digital marketing opens up several options to meet clients where they spend their time online. But with limited cash flow, it might be a smart time to reconsider your paid marketing mix, spend on campaigns where you can achieve the best return on investment, and in order to control your spending, take advantage of the regular and lifetime budget management tools available by paid advertisement platforms.
To meet your clients, use retargeting ads
Through the custom communities that you build, which consist of your past clients or social media followers, people who already know and enjoy your brand, Facebook ads will help you attract new clients.
You should submit a client list to the Advertising Manager on Facebook and use the site to connect with your most loyal consumers, display gift cards, pre-orders, or other deals mentioned in this post.
Show up with Google Smart Retail initiatives for willful shoppers
While during this era, some ads may appear as interruptive, search advertisements let you show up directly for clients that are actually searching for your goods. The Google Shopping app makes discovering your company across Twitter, Google Search, and Gmail easier for online shoppers.
It is relatively easy to set up Google Shopping. You should sync Google Merchant Center goods, set a budget, and let Google refine the campaign so that as users look for them through Google’s network, goods turn up.