Starbucks announced shutting down 200 stores in Canada over next 2 years. Aldo obtained bankruptcy protection in Canada and USA. Victoria Secret and Bath Body Works announced closing stores across Canada. And many other old businesses have already shut doors.
These are all big global players in their segment with huge cash reserves. They have been unable to withstand 3 months of closure with zero revenue and fixed expenses. Imagine the plight of small players who run their business on very limited cash flow.
With the Government’s phase wise opening of the economy and on a brink of second wave of the pandemic, there has never been so much uncertainty in the economy. Businesses have no visibility on the revenue and customer footfall and if ever they are going to resume to the same level of sales prior to this pandemic.
Below are some of the ways businesses are expected to change the way they operate:
- Retail Stores will shift to BOPIS Model
With people trying to avoid going out unnecessarily and limit their exposure, they have made the shift towards online shopping. Brands will be forced to increase their digital presence to attract the consumers. More brands will shift towards the BOPIS Model. Buy Online Pick In Store. The trend has already seen a spike across grocery stores, apparel etc. and will continue to gain momentum in retail across industries. Augmented reality by companies like ZEEKIT will further help people to try products online by seeing themselves in any clothing item online.
- F&B brands will shift towards operating cloud kitchens
Paying high street rentals doesn’t make sense anymore for people now either picking food from takeaways or ordering online. Restaurants now have higher reliance on business through apps like SkipTheDishes, UberEats and Doordash. More restaurants would now take up places at cheaper rentals to run cloud kitchen and save money to infuse it in digital marketing to run only delivery business.
- Real Estate Market will shrink
With retailers operating through BOPIS model, and F&B outlets moving towards ‘dark kitchen’, the demand for commercial real estate will shrink. Additionally, as employers get comfortable with employees working from home, the need for bigger office spaces will also be given a rethought. The market for co-working spaces will also shrink and eventually get expensive as they will have to re-model their layout to ensure physical distancing.
- Services businesses will move towards doorstep services
All services-based businesses like salon and spa professionals, dry cleaners, clinical services etc. will see a huge turnaround in the way they function. These businesses would rather invest in reaching to their clients at their doorstep than paying a fixed rental each month. They have even started services at consumers’ doorstep to make it more convenient and safer. This will allow for more personalized services, prompt and expensive services.
- Event Management will shift online
Most of us have already seen the change. Classes, client meetings, townhalls and even doctors’ appointments being held online. The event management companies will have to carve out new and innovative platforms to conduct events online and engage audiences. Event Management is very closely associated with hospitality industry; both have seen a major setback due to current situation.
This unprecedented and unique situation has forced all companies to get back to the drawing board and re-think their strategy of doing business. Not only will this see a turnaround in the way current businesses function but also lead to opportunity for newer industries and business models.