Living in an Alternate Reality
How will small retail businesses survive the COVID-19 pandemic?
If three months ago small retail owners were told they would lose virtually all their customers overnight and it may take up to a year or more to get these customers back, they would not have believed it. They would have said that their business would be forced to close if this was the case.
Yet this is the current reality.
Most retail operates are on razor-thin profit margins when times are good. How can they hope to survive the new normal? The answer lies in how quickly they can regain customers as the country begins to “reopen.” Simply hoping that customers will come back is not the answer.
Today, most small retail businesses are closed and those fortunate enough to be considered “essential” are facing a significant drop in customers. Once busy restaurants are trying to survive on delivery and take-out, others are attempting to retain customers by implementing social distancing measures (limiting the number of customers that can come inside, placing tape on the floor six feet apart for customers to stand on when in line, putting up barriers between employees and customers, etc.).
The U.S. is being told by the government that these measures are temporary. But what does this timeline really look like? Information obtained from a simple internet search shows the obvious problems with reopening retail. Let’s address some of these issues:
- Vaccine – There are many different vaccines in the works, but medical experts are still 12-18 months away from a viable vaccine.
- Cure – There are promising drugs, but no magic bullet yet. If that magic happens, it is still likely 12-18 months away.
- Herd immunity – This requires enough of the population to be infected and recover so the virus cannot spread any more. We are many months, potentially over a year away from this best-case scenario. Moreover, it is unknown if recovered individuals are immune.
- Testing – COVID-19 testing to see who is currently infected and antibody testing to see who has recovered and is hopefully now immune. This is the most realistic solution to reopen the country. We are nowhere near having this level of testing readily available. It also relies upon the unproven assumption that these COVID-19 survivors are immune to reinfection.
It is not palatable to think about, but when small business retail is finally allowed to reopen, likely at some point during the summer of 2020, COVID-19 will still be around and impacting us for another 12-18 months minimum. For this reason, businesses not prepared to protect customers and employees from an active pandemic are likely to fail. This is particularly true of small retail.
How does small retail adapt and succeed in the midst of a global pandemic?
Customers willing to venture out and brave the new world are going to have different expectations of safety and cleanliness than they did in a pre-COVID-19 world. However, satisfying these customers alone will not be enough to keep small retail in business.
There will undoubtedly be a larger group of former customers that will not be back, at least not initially. The primary reason for this is that they will have found new ways to get what they want (think online) and need without engaging in the risky behavior of in-person retail. Businesses that do not find a way to attract these former customers or to find new customers are destined to fail. There are no simple solutions. But, here are a few ideas that can help.
- Ensure customers are safe and “feel safe”.
- Message your existing customer base to ensure they know the measures you have taken for your safety and the safety of your employees. You want to reassure your customers that you have gone above and beyond competitors.
- Make sure you have a product, service, or need that people are willing to come out for.
- Take advantage of all online opportunities to sell your product.
- Concerted advertising, including optimization of social media.
- Take advantage of ALL government programs.
- Anticipate inflation/deflation, supply chain disruptions, and plan this uncertainty into your product costs.
- Make connections with your customers and sell experiences (you can’t get that online). People will be hungry for those. Stand out.
As with any retail crisis, there will be new opportunities. People always find new ways to succeed where others fail. That is a topic for another day.