How to lockdown-proof your business
The Australian Industry Group estimates the snap five-day lockdown cost Victoria's economy a lot more than $2.3 billion in lost or postponed household spending. Coming because it did across Valentine's Day and Chinese New Year, horror stories were plentiful.
Florists required compensation from the Government, having lost $36 million in sales on which is their biggest trading day of the year, not to mention losses over events for example weddings. The hospitality industry estimates revenue losses to become about $100 million, with almost $30 million in fresh foods and produce was dumped.
The Victorian Government has announced grants of $2000 will be available to eligible small businesses, including sole traders, for all those hit by the lockdown, but there is little else that businesses can do to claw back that which was lost.
There may be more pain to come
Snap lockdowns have now occurred in several states and retailers have to proceed as if future lockdowns are inevitable, and that means now is the time to lockdown-proof the company.
Retailers should heed warnings that tailwinds fuelled by the COVID-19 pandemic are set to lighten as the absence of tourists and population growth requires a toll.
The second quarter of the calendar year looms as flat and difficult. Retailers have winter stock on order however it will not arrive until April, May and June, whereas it ought to be getting sold in those months, which results in a lag to cover those costs.
Speed is from the essence
During the lengthy shutdown that Victoria went through last year, retailers had time to develop contingency plans but in 2021, speed is now essential.
Whether it's a pivot straight to online or facilitating click and collect, business people must have a game plan that can be quickly turned on and off again, since there is no time to prepare when everything suddenly snaps shut.
Despite the surge in online sales, independent retailers haven't secured exactly the same market share as big players in the last 12 months. Small businesses can't necessarily compete in price and scale, but they have agility and that means owners can focus on creating a seamless online experience, personalising communications and keeping their subscriber base engaged.
Trust is everything when it comes to digital communications and sales – a person who has a poor initial online knowledge about a small operator will not regularly be back for a second purchase.
Diversify your messaging
Don't wait until there's a new issue or problem to shore up communication channels. Make certain interactions are clear and share positive news, which will help to build trust with your online community.
Relying on just one way of getting the message out is fraught with danger, just like any outlet that has been caught up in the Facebook news lockout will attest, so ensure there are multiple effective communication channels in your control, such as email newsletters or push messages.
Communicate with your financiers and landlords as well. Know exactly when business funders are going to turn back on principal and interest, what any back rents are going to be and when they are going to be paid, and handling the debtor’s books to make sure individuals are not going out of business beneath your feet.
Small businesses need to be nimble and also have a structured plan to move quickly if another lockdown occurs. Employing lockdown-proofing measures gives retailers the very best chance of staying competitive and ensuring any losses are minimal.
