The impact of the COVID-19 has been so intense that it has pushed many companies to look for alternatives. Some companies have already shifted entirely to pandemic operations—whether that means redirecting facilities to produce hand sanitizer in leftover fancy soap bottles or working to transform assembly plants into ventilator factories. LVMH, the French luxury goods conglomerate, has bid farewell to floral scents and glass bottles at its Christian Dior, Givenchy, and Guerlain perfume factories. Just 72 hours after the French government issued a call to industry to address a shortage of hand sanitizer on March 13, LVMH's perfume facilities started churning out the essential product for health care works—in Dior-branded plastic bottles.
Another leading brand, Zara, has moved towards supplying chains to produce medical equipment free of charge for the Spanish government, despite taking a 287 million euro hit to inventories. If the market giants of the fashion world had to change the business model, imagine what would be happening to the medium and small-scale businesses.
How can Small-scale companies Survive through Coronavirus?
The pain and uncertainty of the impact of the coronavirus on small business owners are staggering and likely to be substantial. Entrepreneurs are being forced to take drastic steps to continue operating, and many are fearful about their futures.
A National Small Business Association member survey last week found that three in four small-business owners are very concerned about the economic impact of COVID-19. Almost half have already seen reduced customer demand. And 38% aren't confident in the financial future of their business, up markedly from 15% in January. First came the order to close up. Then the laying off of staff. Now small-business owners across the U.S. are bleeding cash and wading through paperwork to get financial assistance. Large swathes of the U.S. are under confinement orders that are becoming stricter by the day as authorities try to contain the coronavirus outbreak. Among the hardest hit are clothing shops and other mom-and-pop stores that are the engine of the economy. Every day counts when half of the small businesses have a cash buffer of less than a month, according to a JPMorgan Chase Institute study.
Here are a few strategies these companies are adopting to face the challenges:
1. Digital Technology
Small businesses and sole traders who do not sell a physical product are turning to the internet to combat the drop in sales during the COVID-19. Several designers discovered this season that they could still make sales without the person-to-person appointments, using digital platforms like Joor to sell their goods instead. Amid government-mandated quarantines in China, consultants at Bain found that shoppers dramatically increased their online purchases through Tmall, an ecommerce site, but that their designer goods purchases went down.
2. Public Demand
The outburst of the coronavirus disrupted the fashion business so much so that the organizations changed business models of what they were initially into radically. The cases of leading mentioned above give a clear picture that public demand has changes. It is wise to comply the business model according to the change. Like many brands, small-scaled organizations, too, are shifting their models and catering to the priorities of the customers.
3. Swap the chain
People are asked to remain in their homes for many weeks; many cities in the infected countries are requested to maintain lock-down for a long time. Due to this change, the customers are not able to go to the shopping malls or the brick and mortar stores, as they are places that lead to the spreading of the virus. Here is a little hope for the small-scale fashion houses; if the customers can't reach them, they can contact the customer. You need to swap the supply chain that could help you to become profitable in the crisis.
4. Collaboration
Since the virus has hit the fashion industry so hard that it would take some time to bring the derailed economy back on its foot. The leading brands have suffered the most as their production, supply, and sale have been compromised. Therefore, they must be looking for smaller-sized businesses to venture into the new verticals. The key stakeholders are dependent upon the local marketers to help them in supplying and manufacturing the products. This is the golden opportunity that later needs to seize.
Conclusion-
COVID-19 has drastically impaired the way the fashion industry used to work. Though it has caused some damage, the vital lesson to learn is that it has also provided a window of opportunities to small-scale businesses. They can lead the way and become at par with the leading brands. iDesigniBuy is an experienced company that offers modern-day solutions that will aid in understanding and acting proactively during tough times.
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