With China – the manufacturing hub of the world going down due to the Coronavirus outbreak, followed by the fashion capital Italy, it’s a double blow for fashion. Coronavirus experts such as Gabriel Leung believe that this may just be the first wave of Covid19 and the worst is yet to come, as many as 60% of the world population is feared to get infected by the coronavirus. There is a big question mark on how businesses prepare for the difficult times ahead, as we’re already witnessing one of the worst world economic slowdowns ever. The problem is that we’re all entering an unknown territory and no one is prepared for it.
But having seen patterns in China and Italy, and how many of our clients are dealing with the emergency, we would like to give you some tips that you can use in your war brand’s war against the virus.
Ecommerce was almost 50% of our sales in China in 2019 and we think that this (ecommerce) will really help us in this crisis, as the consumption in our physical stores has reduced significantly, and ecommerce will help Loreal stay solid in months to come. L’Oreal CEO Jean-Paul Agon discusses the impact of China’s coronavirus outbreak and Hong Kong protests on the cosmetics firm.
Because Coronavirus can’t live on packages
One thing is sure – until things go back to normal, people will stop going to malls and other public places for shopping. But surely, life won’t stop. Customers will continue shopping online. By ordering online, customers can avoid public contact and the good news is that online shopping is relatively safer as the chances of coronavirus infection from ecommerce delivery packages are extremely low. Thanks to the poor survivability of the viruses on package surfaces as it takes a few days to deliver and the package gets exposed to ambient temperatures not favorable for the survival of the virus.
1) Contact your suppliers
The first step toward coming up with a contingency plan is to know what’s happening at the ground level, and communication is the key. If your suppliers are based in China, Singapore or any European country – make sure you contact your suppliers to get a clear picture of how bad their daily business operations have been impacted by the virus. You must ask them whether they have the necessary raw material supplies to ensure timely delivery? Are they taking necessary quarantine measures to ensure their workers don’t catch the infection? The bigger idea here is to know about any production or delivery delays well in advance so that you have time to adjust and inform your employees and customers about it.
2) Prioritize Buying decisions
As more of your customers get infected, and the global economic slowdown affects household income, your customers will reprioritize their shopping list. They will spend more on necessity and less on luxury. Thus, it’s only smart for you to quickly adapt your inventory buying decisions to focus on the essential products and avoid experiments until things go back to normal at least in your target markets most affected by the virus.
3) Prepare your customers
It’s important that your customers and retail partners know about the potential impact of Coronavirus on your ability to deliver their packages on time. The most important thing here is that you tell them about what can go wrong before the wrong happens. Also, talk to your transit or 3PL provider about the shipping options they have to offer. You can use spaces on your websites such as sticky hello bar, product page or an outreach email newsletter to give your customers a heads-up.
- Safety: As a responsible brand, you should tell your customers what you’re doing to deal with COVID-19. Even though shipping packages are not an effective host for coronavirus spread, to be extra safe, you can ask consumers to clean packages before opening with solutions containing 62% to 71% ethanol alcohol, 0.5% hydrogen peroxide, or 0.1% sodium hypochlorite.
- Shipping cost: If there are delays, your delivery partner might have to ship your goods by air. Furthermore, Air delivery service from China is heavily controlled due to strict quarantine measures and travel precautions. Another option is expedited shipping via sea as with some routes cutting the trip from Shanghai to Los Angeles to just 12 days. Regardless, it increases the shipping cost, and you should tell your customers about the increase in shipping costs well in advance.The company is already preparing for that possibility, said Bruce Gifford, chief executive of Naked’s parent, 360 Sweater.
“It’s too early to tell if there are possible supply chain interruptions but we’re adding a little bit of extra production time,” he said. If there is a delay, Gifford said, the plan is to ship more goods by air. Currently, 360 Sweater ships 60 percent of its freight across the Pacific on ships, a journey that takes about a month, and 40 percent by air, which takes two days.
- Shortage of supplies: If you’re expecting a shortage in supplies, it’s best to inform customers about potential delays due to supply shortage before they place the order.
4) Prepare your customer support team
No matter how well you inform your customers, there will be customer complaints due to package delays and orders getting canceled. Prepare your customer service team to deal with these situations before it happens. Perhaps, think of creative ways to explain the situation and compensate for the lapse in their shopping experience with refunds and discounts on future purchases.
5) Prepare secondary manufacturing options
Due to mounting tensions between US & China, and Trump threatening to impose additional tariffs on Chinese-made clothing and accessories last year, many US brands stepped up the efforts to find manufacturing companies outside of China. The coronavirus outbreak is now forcing these companies to expedite their efforts to find alternatives in countries such as India, Bangladesh, Cambodia, and Vietnam.
Attend the networking events and trade shows, of course with necessary precautions and safety measures to find alternative manufacturers. It’s best to find a local manufacturer, but it depends a lot on what product you are selling.
We’ve been working with our manufacturers for several years now, having established a solid business relationship so the lines of communication are open. Although this current global outbreak certainly affects the turnaround time for custom orders, we have been able to process these orders. It’s important to be more patient and understanding at the moment because we are all fighting this virus outbreak together and it’s affecting companies across industries. With that being said, we continue to forge ahead with a business-as-usual morale while putting in place back-up alternatives in other regions, just in case.
Olivia Hollaus, CEO – ProtectMyShoes.com
6) Diversify your target audience
For most retailers, Chinese shoppers constitute a big fraction of their customer base and eCommerce retailers that rely on Chinese consumers are especially at risk given that a second bigger wave of Coronavirus is expected to hit China and other countries in the near future. Lost offline sales due to coronavirus, compounded by the Hong Kong protests, means international brands stand to lose a substantial portion of revenue in 2020. To mitigate further losses, brands must push their marketing efforts in less infected countries.
7) Keep a check on your paid ads spent
The general public is in a panic state especially in countries such as China, Italy, Iran, and Korea. They are too distracted with the fear of Coronavirus and if you’re investing in paid marketing channels, you should be careful. Keep a close eye on the ROI on your paid ads from each country, and be quick to respond to any downward spikes to ensure you don’t waste your money. We have already seen many brands lowering their paid ads spent in infected countries because of the ROI.
In a situation like this, you’ve to make quick decisions. You can’t get these decisions right until you have the necessary information. So, make sure you’re on top of the news related to Coronavirus in your home country as well as international markets where you sell. It’s a matter of hoping for the best but preparing for the worst. And the worst thing you can do as a business right now is to close your eyes.