NEXT: Safeguarding your business until you can trade profitably
by Louise Burgers. What do you do when you can’t do business under lockdown or your consumer market has disappeared overnight?Thursday, 13 Aug 2020
by Louise Burgers. What do you do when you can’t do business under lockdown or your consumer market has disappeared overnight? Reimagining your business model or reinventing your business anew until you can trade again properly, post-Covid, is not easy. It takes risk and it takes courage; but this is also an opportunity to try something different, to collaborate, seek out new partnerships or markets, and to get your ducks in a row for when the economy restarts and growth is possible again.
In Cape town, The Peninsula All-Suite Hotel, known for its self-catering holiday accommodation with sumptuous views across the Atlantic seaboard, has reinvented itself: it will fetch your laundry and return it the same day freshly washed; send its experienced cleaning teams to your home to give it a lockdown spring clean, or a maintenance team of handymen to fix whatever you need fixed; will rent out its rooms as private offices with a view; and is also providing dedicated work stations with a free coffee thrown in, for as little as R60 an hour. This is innovation and reinvention at its best.
And it is exactly how Flux Trends founder and trends specialist, Dion Chang, advises businesses to approach our current uncertain environment and reassess skills and assets to find new markets and continue trading and save jobs; until they can return to their core business – or completely transform their business to meet changed consumer demand as he outlined in Part 1 of our report-back on the Flux Trends mini-masterclass held for business recently [Survivor SA 2020: Making a plan for lockdown limbo]. The importance of understanding that consumer behaviour has changed – possibly permanently in some cases; and that this changed consumer may no longer want or need business services on offer, is something all business has to get to grips with, and fast. Are you still relevant? This is the most important question that Chang posed.
Examples given by Flux, included two local comics who started the Nowhere Comedy Club and “toured the world” without leaving home with their comedy offering and were able to charge money to their new global audience; and a local Pilates instructor, who under lockdown gave free Pilates classes, gaining clients around the world, and is now able to charge and earn foreign currency, thereby growing her business online faster than she could ever have in real life in South Africa. Chang urges business owners to step back and work on their businesses right now and rethink strategy and bring in different ideas from their workforce; and look at this as a time for learning, rather than performance.
In this, Part 2 of our NEXT business strategy series, Flux Trends looks at how to design the optimum experience for customers under lockdown; and financial tips on how to survive the financial chaos and challenges ahead.
UX: How to reach your customers
User experience in this changed environment of social and physical distancing, mask wearing and sanitising also presents the consumer with a very difference experience of your service or brands. There is no longer such a thing as retail therapy or comfort in a sterile store or business where you can’t see people’s faces properly; and where any contact with another human being is a hurried, fearful affair, where your eyes burn from all the sanitiser being sprayed about and you can’t hear people talking properly. Chang brought on board lecturer in interactive design (UX design), Morne Venter, deputy head at the School of Creative Technologies, Open Window, to talk about user experience (UX).
Covid has changed the online user experience in the short term and long term. According to the Global Web Index stats, 50% of consumers expect to be able to continue shopping online post-Covid. So, consumer shopping patterns have definitely changed and retailers, in particular, need to deliver on seamless UX experience with online shopping and delivery – an area many retailers in South Africa continue to find challenging, five months into lockdown.
Venter agrees that empathy is at the forefront of all customer experience and user design. How customers feel about an interaction, their perception and the outcome of that experience. “It is literally about the changes in thoughts and feelings a customer has about your product or service,” explained Venter. All customer experiences are linked to their emotional response. UX design is the act of directing or curating and influencing how a customer feels after having interacted with your product or service. It is about understanding your customer and their mindset; and about reacting to that understanding and making decisions in your business that benefit your customer and make them feel safe, reassure them and demonstrate your empathy in crisis times such as these. “How are we acting and what decisions are we making to make sure people are less anxious when they come into our shops?” Venter asked.
For example, products should not just be functional, but emotionally satisfying and an emotionally positive experience. Interaction design is the design of interfaces that users have to engage with and how people engage within your spaces. User experience is very important now, Venter explained, because we have moved from a time where people just expect products and services to be functional. Customers expect services to respond to them and meet their needs, beyond basic functionality. It is about how we react to customer and user needs and anticipate their needs and how we meet their needs for reassurance and empathy.
“The biggest mistake a business owner can make right now when designing user experience, is making assumptions about what they think users, or their customers want. The important thing about empathy is about stepping outside of yourself and really going down to the ground and talking to the people using your products and services.” Business owners also need to react and change things that their customers don’t like or want; particularly when trading during times such as these when consumer mindsets have changed so radically. Venter said a good place to start was basic surveys of customers; talk to people coming into shops and their mindsets and how they feel; and once insights have been received, to see what changes can be made to help customers have a better user experience.
Finance: Safeguarding your finances
Finance expert Lynn Marais of Chelete, was up after Venter, talking about how business can safeguard their financial futures. Globally, 80% of consumers say they are delaying big purchases; and six in 10 globally, say the pandemic has had a negative financial impact on them. “We have to survive this chaos and the challenges ahead of us,” said Marais. These are her tools and tips for surviving this time of chaos:
- Housekeeping: Bringing in stability as far as financial management goes; and remain completely compliant.
- Rethinking: These are different times and all previous methodologies in financial management and financial structure has to be rethought.
- Look beyond: For businesses to survive; we need to look at what we can change now to get us into post-Covid. People are looking at the now of cash flows and redundancies, but it is also important to look at how we change things to bring us into a stronger position post-Covid; and stabilise finances. We need to build systems for the future so that we will be in a stable position in the future; be more resilient, Marais advised.
- Good habits: Form good habits for our personal and business futures during this time. Create a short-term financial operational plan. In a time like this, if you can create a financial plan, you will be able to understand what is working and what isn’t. We believe you should look at a 13-week rolling cashflow forecast, Marais said. Maintain this on a weekly and daily basis. Build a reserve fund within your company – start small, but start. Have three bank accounts: a day-to-day operational account; a tax reserve or VAT or provisional tax reserve; and then a rainy-day reserve. Understand your cash flow and use excess income to help with chaotic situations like this. It is important to have those investments – in your personal life too.
- Build systems for the future: Forget the old rules. Keep the important relationships, build for post-Covid. So that when there is a chaotic system again, you will be able to be resilient and get through it. Look at your bank accounts on a daily basis. Know your figures; know where you are; record your transactions on a daily basis; be more aware of your financial realm in your business.
- Cull the small things: We all know we can cull so many things. With this cash awareness, you can cull the small, unnecessary things and start your savings for a rainy day.
- Outreach: Reach out to your customers or suppliers and let them know what is happening. Engagement and communication is so important in a time like this.
- Ideas: Make sure you are keeping your ideas and potential opportunities somewhere. As business owners, we have got so much extra to deal with; so much more has been placed on our shoulders, you need to keep those ideas for stable times when growth is possible, Marais advised.
Marais said if business owners had belief in their business, they needed to try save it: keep good staff and negotiate with bankers and suppliers, to try sustain their business through the crisis, until they could trade properly again, or the economic situation improves.
*NEXT is a news section that looks at innovation in business strategy and brand strategy for surviving the COVID-19 pandemic; crisis management; and the tools needed to do so. In Part 1 of this mini-masterclass report back, we looked at what business could do to survive lockdown limbo – and thrive – with insights from the Flux Trends Masterclass, hosted by founder and trend specialist Dion Chang.
In Part 3, publishing August 14, 2020, Flux Trends partner and futurist, Bronwyn Williams, answers questions submitted by business owners during the masterclass on how to market their businesses under lockdown and post-Covid.
In an interview ahead of the Flux Masterclass, Dion Chang, spoke about how resilience is the most important quality any CEO or business owner can have right now. They need to be able to do anything and everything necessary to save their businesses during pandemic panic; trying out new strategies, testing, collaborating and testing again.
Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.
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