Short-Term Revenue Strategies for Small Retailers
For many small retailers, the COVID-19 outbreak and the subsequent pandemic remain the single biggest unexpected disruption they have experienced. Stringent regulations including social and physical distancing measures have effectively locked down the economy. These have forced all non-essential businesses to stop production and distribution.
Smaller retailers or businesses utilize less people, machinery and capital. They normally address fewer buyers and may include a manufacturing unit that makes cold pressed coconut oil. It could also include a medical store that sells pain relievers, masks, surgical gloves etc. Grocery stores that sell packaged goods like packaged dry foods, toiletries, home care items etc.
Small businesses account for a quarter of India’s $2.9 Trillion economy, providing employment for 500 million workers across the nation. This lockdown is set to have a catastrophic effect on the economy at large. The government has announced an INR 1.7-lakh-crore economic stimulus package focused largely on aiding MSME’s.
Businesses can also apply some preventive actions to protect themselves. What we can do is show you some clever short-term strategies that can boost your revenues.
Gearing up for an uncertain future
Business owners need to streamline their processes and prepare for the next phase. There are several strategic decisions that small business owners can make that will enable them to reap the benefits later. The first concern for any small retailer is to make up for lost in-store revenue owing to reduced buyer footfall.
We have a few steps in mind that you could take to generate short term revenue to help sustain your business.
Reevaluate non-essential stocks:
Since the government’s essential-only policy on retail came to effect, the demand - value for non-essential items was shaken. Retailers do have ways to address this by assessing the non-essential stock they have.
• Using inventory management processes to gauge the business value and the gradation of their stocks.
• Assess the dispersal of their deadstock that can bring in much needed cash inflow to their business.
• Discounting and bundling of lower category inventory will not only cause a cash infusion but can also create room for moving stock.
A small, simple solution that is beneficial in two different ways. One, selling gift cards will allow for immediate cash flow and two, they will assure repeat business. There are several ways to make the gift cards more valuable and attractive to the customers.
• Business owners can apply some discount to gift cards to enable a higher volume of sale.
• They may also choose to partner with other local businesses to leverage co-marketing opportunities.
Some local businesses take pride in the close connections they have with their customers. It appears to have paid off, as they’re enjoying a slow – but steady – business! Some companies have asked their buyers to pre-order the things they want to buy.
• Pre-ordering helps generate a cash flow as buyers fulfill their payments.
• It works at a slower pace and might only come from registered buyers.
• Requesting customers to pre-order products for a deposit or full amount.
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As things stand, small-time businesses might want to create working capital by sorting out their inventory and push back future payments.
• Rethinking standing orders and cancelling impending non-essential orders.
• Avoid overstocking their business with non-essentials for the foreseeable future.
Reducing shipping expenses:
Some part of the price paid for orders include shipping. This might not be attractive to buyers during this pandemic. Consumers are now a bit more careful about their spending.
• Businesses can lower price tags by cutting down on shipping expenses.
• Skip out on elaborate product packaging that is unnecessary – this is product specific.
Cash has to be invested in suppliers and to pay for expenses. Deferring this can help make extra capital available.
• Defer payments to suppliers based on a joint plan between both parties.
• Subject to your business needs, you may consider using the moratorium plans allowed by the Government.
Going beyond the four walls: Venture into online sales
People are no longer shopping outside because of the lockdowns and social distancing in place. What they are doing now is buying goods from their homes online – but essential goods only. So, there has been a surge in online retailing with e-commerce portals experiencing significantly higher sales for essential goods. Studies show how online sales have grown by a whopping 74% in just March alone globally. The effect is being seen here in India too. Here’s what a small business owner can do.
• Boost existing online presence: Some sellers may be using an exclusive ‘online only’ system to address increased online sales. There are ways to improve their store listings that can direct potential consumers to their store.
• Rethink branding and advertising: In precarious times, businesses have to be sensitive to the prevailing conditions. Taking a leaf out of stakeholder capitalism, small-time business owners need to change their marketing approach. Your message has to be more empathetic of their needs, the COVID-19 pandemic and speak in real, relatable terms. At the same time, all of these changes have to fit the brand image without shifting too far away from it.
• Use the reach social media has: Real-time experiences have been taken away; consumers are using social media for connection as well as content. And, you can create an ongoing narrative that talks about the brand and products as well. Both efforts work for promote the brand name ultimately.
• Shipping and delivery: Just like offline retail, it is important to offer sensible perks to your customers. This is one way to make your offerings sound more appealing to them. Free shipping, or a host of pickup options is fits social distancing measures.
• Altering exchange and return policies: Empathizing with your customers during this time can go a long way in establishing your business. Considering how the lockdown and movement restrictions work, you can extend the return/ exchange windows. This helps reduce purchasing doubts and may boost online sales.
• Leveraging online sales marketplaces: If your business still does not have an online presence, now is perhaps the best time to venture into one. A simpler way is to register with a reputed business marketplace as an online seller. An existing marketplace has many benefits over new online portals. Some of them are:
o An existing customer base: Reputed online marketplaces like Amazon have an already existing and substantial customer base. Therefore, finding consumers for your products will be far simpler.
o Save on advertising: Your products are often highlighted with other related products in online portals. This gives you the assurance that your product will be visible to potential buyers.
o Hassle free customer service: Online portals already have a centralized customer service operations team. They handle most of the primary customer queries and other engagements separately. You are left with time and resources that can be focused on other business-critical areas.
o Shipping and delivery: You will not have to bother about shipping and delivering your items again. From packaging to the final handing over your product, the central shipping department will take care of it all. And what is more, marketplaces like Amazon has shipping and delivery across country making your products available over a far wider geographical region.
To sum up, even though the situation is far from ideal but there’s light at the end of the tunnel. Proper focus and planning are what small business owners need right now to ensure they are safe through this pandemic.
If you plan to sell online, you can catalogue your products and services on Amazon, which grants you access to millions of buyers across the world. To sell on Amazon, register as a Seller now.