The onslaught of COVID 19 has changed the shopping landscape dramatically. Its impact on e-commerce and online shopping has also been intense. However, it is important that businesses understand the overall effect and devise appropriate strategies to deal with the situation. To make sure that your business is in a position to provide the best possible services during this difficult time, there are certain guidelines you can follow. These pointers will also help you in maintaining the liquidity and profitability of your business.
- Figure out the impact: In order to design an appropriate strategy, it is important to figure out the areas which are going to be impacted by the pandemic. Further, it is also important to quantify the impact, so that you are fully aware of the changes. Depending on the type of your business, you may experience a drop in your website traffic. However, you should endeavor to measure the drop exactly, or at least have an approximate idea. Once these areas have been identified, the next step is to take mitigating actions to minimize the negative impact. This step will also allow you to identify your critical resources and ensure their proper utilization.
- Streamline your costs: The pandemic has stalled the pace of growth for the e-commerce landscape, and is likely to have a negative impact on revenue and profit margins. During such times, it is important that you cut down your costs to preserve your financial resources. This is also the best time to evaluate your plans such as marketing budgets etc. You may decide to suspend some of the activities until things get back to normal. In other cases, you may find some expenses to be completely superfluous, and decide to eliminate them completely. You may also want to automate various operations, leading to more efficiency and reduction in cost.
- Manage your resources: Apart from planning your expenses, you should plan about your resources as well. Identify the assets which are most resource-incentive. For example, maintaining an inventory calls for substantial investment, and therefore, you may want to carry out ABC analysis of the items lying with you. With this analysis, you can identify the items which are most critical for your business. You may want to reduce your investment in non-critical items while focusing on the important ones. Similarly, you may want to renegotiate the terms and conditions with your debtors, so as to speed up the cash flow and boost your liquidity. You may also carry out a similar process with your creditors to renegotiate your contract.
- Focus on revenue: The long lockdown is indeed going to have a negative impact on the revenues of most businesses. However, such a negative effect is not going to be equal for all. In fact, for some businesses, this calamity may lead to higher revenues. In this scenario, you may want to figure out alternative revenue streams for your business. You may want to expand your business into health-related areas, and by doing this, you will not only be able to seek new revenue streams, but also provide essential services to the society. For example, you may add items such as face masks, gloves etc. to your inventory.
- Implement and track metrics: You can use this slack time to try out various marketing and analytics strategies. You can implement new metrics which may help you in tracking your business activities in an efficient manner. Most of these metrics are real time and may help you in taking timely and prompt decisions. The metrics regarding site visit and sales value are especially helpful. Additionally, you may also want to keep an eye on the competition to see how they are faring in this environment. Some of the most prominent metrics you need to look out for are Benchmark CPC and Benchmark CTR. Another important area for analysis is the price competitiveness, where metrics such as benchmark product price difference may be used.
COVID 19 has presented e-commerce businesses with an unprecedented situation. While the environment is unpredictable, you can successfully navigate through this situation with the appropriate tools and intensive planning. So, try and use this downtime for planning your future course of action.