COVID-19: Which Businesses Are More Likely To Be OK?
I’m sure you already know, that in order to prevent the spread of the coronavirus COVID-19 disease, governments around the world are telling people to stay home and are closing most businesses, except for essential services such as banks, pharmacies, markets and delivery services.
The restriction period varies from country to country:
- Malaysia – Extended Movement Control Order for 4 weeks
- Philippines – Luzon was placed under Enhanced Community Quarantine for almost a month
- Thailand – Broad lockdown with a possible 24-hour lockdown
Whether it’s 14 days or three weeks, with most people staying home, many businesses will suffer losses.
It’s estimated that COVID-19 could cost the global economy US$2.7 trillion.
From our own data, we’ve already seen an average drop of 50% – 80% in sales for our merchants across Southeast Asia.
How will this affect my business?
COVID-19 affects different businesses in different ways.
Here’s a look at a few businesses that heavily rely on foot traffic:
- Retailers – those in shopping malls have seen a drop in sales of 50 – 70% since the outbreak of COVID-19, according to Datuk Liew Bin, VP of Malaysia Chain Retail Association. Small independent retailers may be experiencing the same.
- F&B outlets – restaurants may be allowed to open for takeaway and delivery services, food trucks have been temporarily banned in selected areas
- Healthcare – pharmacies are allowed to open during this period so the impact should be minimal. In fact, manufacturers of soap, hand sanitisers and medical supplies, such as masks, may even see an increase in sales due to the sudden spike in demand
- Beauty or Wellness services – this is a sector that will likely be hit hard during this period because the business is mostly dependent on people visiting their stores to enjoy the service
It’s clear that the impact of the lockdown is not the same for every business.
However, businesses that have adopted some form of digitisation may have a better chance of surviving compared to those who have not.
Read on to know why.
Small businesses who run a physical shop and sell their products online are not 100% dependent on foot traffic.
These guys would be in a much better position to survive.
Does this mean they all have their own online shops?
Not at all!
Many of these small retailers today also use:
- Online marketplaces such as Lazada or Facebook Marketplace
- Classified listings such as Mudah.my or ebay.ph. Originally meant for people to sell their old stuff, retailers use it to sell new products too
- Social selling such as using their Instagram/Facebook page as a shop
These retailers don’t have a website or online store because it can be expensive.
But they recognise the importance of digitising their business, and have found an affordable way to reach new customers online.
In a time when they can’t even open their shop doors, their online presence will minimise some of the impact.
There’s one downside.
This form of online selling is that it’s inefficient.
They would have to keep track of two sets of sales transactions and doing stock takes would be even more time consuming.
A more efficient and affordable way would be to use a point-of-sale (POS) system that has a pre-integrated ecommerce platform like StoreHub Ecommerce.
This way, they’ll only have one set of data for their business instead of two.
It’s time to turn to cloud or web-based solutions because it gives you the flexibility to keep your business running when there is a country-wide lockdown.
Professional services such as IT or accounting services may not depend on walk-in customers but they still need to serve their clients, and they can’t do this if they can’t go into the office.
Unless, they are already set up to:
- access their files from anywhere with cloud storage such as Google Drive
- use online meeting tools to “see” clients such as Zoom
- use web-based solutions that they can log into outside of the office
There is another advantage to using web-based solutions besides flexibility: you would be able to enjoy any new features or benefits rolled out by the software company immediately.
During the recent COVID-19 lockdown in the US, tech companies removed limits on free trials or offered free upgrades to businesses to help them cope.
If your business had paid for a one-time licence, instead of subscribing to a web-based solution, you would not be able to enjoy this.
We know that labour costs form a significant part of your business expenses.
One way to reduce it is to automate part of your operations.
For example, supermarkets that offer self-check-outs don’t have to hire as many cashiers.
Restaurants that allow customers to self-order, whether at kiosks or at their tables using a mobile phone, don’t have to hire as many waiters to serve customers.
When you face a difficult situation, such as needing to close for a few weeks, like you do now during this lockdown, you have a better chance of surviving if you do so with a lower cost-base.
And if you’re not allowed to have dine-in customers like in Malaysia, then you can consider enabling an affordable food delivery feature for your store.
Even if you were to let your workers go now in order to cut costs, you may face another risk when the lockdown is lifted: you may not be able to rehire fast enough and that may hurt your chances to get back on your feet.
If you’re in the F&B business and you allow table ordering as an example, then you won’t need to hire waiters once the lockdown is lifted because the table ordering system can cater for the volumes of customers at any time.
We know that times are tough, and we hope nothing but the best for you and your business. Take some of the solutions we’ve highlighted into consideration to help you survive through all of this.
Until next time.
Stay safe and healthy out there guys!
Click here to learn how StoreHub can help you grow your business online.