According to NuORDER’s recent survey of 1649 buyers, retailers have four top priorities when it comes to mitigating COVID-19 losses: increasing online efforts (28%), cutting operating costs (26%), reducing new inventory (23%), and selling their existing product (18%).
Below, find tips, tricks, and tactics to cross off things on your to-do list efficiently while navigating the uncharted territory of COVID-19.
Increasing Online Efforts
It’s 2020, and we’re living in the era of COVID-19 — the World Wide Web is the place to be. If you’ve been relying on your retail sales, it’s time to pivot and redirect your efforts towards strengthening your online revenue stream(s).
- If you haven’t already, consider bringing your brick and mortar online. With easy-to-use and affordable site builders (not to mention some extra time on your hands), this is an easy way to boost sales. Think of it like a “grand opening” — take advantage of the opportunity to craft a launch strategy, and get the word out about your new “location.”
- Your options for getting products into the hands of customers is no longer limited to your brick-and-mortar or your website. With digital marketplaces galore (both industry-agnostic and industry-specific), as well as social-selling on the rise, there is no better time than now to test the waters with different channels (and their corresponding conversions).
- If you have an in-house line, why not open a digital wholesale storefront?
- Make sure your website is optimized. Little tweaks can make a big difference. For example, a 1-second delay in response time can result in a whopping 7% reduction in conversions. Do an audit of your website and determine where there is room for improvement. You can find a ton of tools and add-ons that can also help in boosting conversions (and revenue).
- Get social. And if you’re already “social,” use the free time to analyze your strategy, make improvements, test new channels, and perhaps most importantly, engage with your customers. Keep your community updated with a regular cadence of posts to your social feeds. How can you continue to deliver value (and remain top-of-mind) during these unsettling times? Give new low-cost initiatives a try, like setting up Instagram Shopping or running Facebook ads (learn how you can score free ad credits here). There are so many ways retailers can experiment with social, and what better time than now?
Cutting Operating Costs
When it comes to reducing expenses, there are several ways you can go about conserving some much-needed cash.
- Review your finances line-by-line and cut non-essential spending. It can be tricky when it comes to things that aren’t as clear-cut. For example, while marketing may be business-critical when it comes to driving sales, you’ll want to dive into your analytics and stop whatever spend isn’t delivering on the ROI front.
- Talk with pretty much everyone and anyone you have a business relationship with to see how they might be able to offer some financial respite. Be proactive and reach out before you’re in a spot where you’re unable to pay your bills.
- Ask your landlord about rent reduction or deferral (or another payment plan).
- Rework payment terms with your vendors and suppliers.
- Contact your creditors and lenders.
- Negotiate (cheaper) plans with your providers.
- Take advantage of COVID-19 discounts and freebies.
- Call your insurance to negotiate the terms of your policy.
- Reduce essential spend where possible. Switch to a cheaper plan (at least temporarily), be conservative about your resource use (from utilities to cleaning supplies), and look for other hacks to lower expenses. For example, you can cut shipping costs by manually fulfilling orders, and bagging the fancy packaging.
- Seek COVID-19 financial relief. Under the CARES ACT, $350 billion has been allocated to the newly created Paycheck Protection Program, an extension of the SBA’s 7(a) loan program. State and local governments, as well as nonprofits and corporate entities, are also offering assistance to small businesses by way of grants and low-cost small business loans.
In mid-March, the Federal Reserve cut interest rates to between zero and 0.25%. If you currently have debt, it might be time to consider refinancing at a (likely) lower rate.
Time is money, and money is time. Put things on autopilot where possible — it can help decrease your operating expenses and leave you with more time for the important stuff, like planning your store’s eventual reopening.
Reducing New Inventory (and Deliveries)
With COVID-19 closure and annual sales down significantly (and expected only to continue to decrease over the next six months), retailers are already pulling the plug on new deliveries. 63% of retailers surveyed by NuORDER were reporting to cancel on-order (yet-to-arrive) products. What you do here is pretty simple: reach out directly to the brands you work with to suspend, reduce, or cancel your order(s).
Keep in mind; your vendors are also likely dealing with similar cash constraints and feeling the financial impact.
Selling Existing Product (Discounted)
This one is pretty straightforward, but you probably shouldn’t have your cash tied up in inventory when money is tight. To get stock off your hands, you’ll likely have to cut your losses and sell at a discount. You can:
- Sell products back to the brand (although this might be difficult given the financial pressure every business is feeling).
- Have a clearance, flash, or item-specific sale to offload deadstock.
- Sell excess inventory to liquidation companies.
- Run a promotion. There are tons of different types to choose from, including (but not limited to) “free gift with purchase,” percentage discounts, “xx dollars off,” and BOGO.
- Incorporate upselling into your sales strategy. What is upselling? Find out how to utilize it in your strategy here.
There are also ways to pivot your strategy to sell your existing product. Rethink the entire “shopping experience,” and how you might be able to relieve points of friction and innovate with what you have available.
- While most ecommerce categories are stagnant, “subscription and convenience services” have seen an upward trend in both conversions and revenue. Subscription services can increase retention, improve forecasting, and provide some degree of a financial cash buffer as a recurring revenue source. Plus, you could incorporate your existing inventory into subscription offerings.
- Bundle inventory into a timely COVID-19 kit (like these “Quarantine Boxes“).
- Give your customers options by offering same-day delivery or curbside pickup for online orders.
- Offer a payment plan for online store purchases through services like Affirm.
- According to COVID-19 insights from marketing guru Neil Patel, businesses that added a payment plan were able to boost conversion rates by 12% on average.
- Extend return and exchange policy, or introduce “Try before you buy.”
This post was written in collaboration with Funding Circle, the 2019 Lendit Top Small Business Lending Platform. Find out more about how they can help your small business needs here.