The coronavirus originated in China, and naturally, it was the first country to be impacted by the pandemic outbreak. It was also the first country to free itself from the deadly virus, showed a path to
the rest of the world.
Lessons to be Learned from Chinese Retailers to Deal with Crisis?
· Save Cost on Training Employees
COVID-19 will undoubtedly have an impact on the profit-and-loss statement of many retailers. But leadership teams should focus more on cash flow over the coming weeks—and ensure that this shift in emphasis is understood throughout the senior managerial ranks. After adhering to the digitization technology, the retailers won't have to train their employees to perform routine tasks. As a result, they would be able to save a considerable amount of cost required for day-to-day functions.
The increased focus on cash can go hand in hand with measures to reinforce the balance sheet, including drawing down all existing credit lines and stopping or postponing all nonessential capital spending. A variety of working capital enhancements are also possible, such as measures to accelerate cash conversion. Hiring freezes were frequent at Chinese retailers in the early stages of the crisis and are likely to become more prevalent internationally as the pandemic progresses.
· Online Initiatives Delivers
The best way to prevent the spreading of the pandemic is to become socially distant; therefore, contactless delivery services are some of the most promising tactics used. In China, many of the departmental services and shopping centers followed the rule and started online businesses. According to the results of the report, many of these online initiatives have delivered encouraging results. However, it will take time to build comprehensive functions, exciting and relevant content as well as synergies with users.
The reports from Bain & Company suggest that sales rapidly plummeted in discretionary categories, such as apparel and luxury, as consumers avoided shopping malls and other key commercial centers. The impact also varied by consumption category, as analyzed in detail in the Bain Brief "China's Consumer Industry Prepares for the Coronavirus Legacy." Consumers hoarded necessities and essential pantry and household items while reducing consumption of nonessentials, such as beauty products, apparel, electronic items, and luxury goods. Therefore, fashion brands must initiate online customization solutions, as it is the only form of business that will deliver under all circumstances.
· Show Sensitivity towards People
The retailer is the face of bands and plays a vital role in supporting society through crises, such as this current one. Top-management or the high-end brands of the fashion industry need to maintain open lines of communication with the authorities in each of their markets. Similarly, since retailers are a highly visible face of the crisis response, they can use this opportunity in their favor by creating deep customer loyalty by continuing the supply flow against the odds.
According to the report in Bain & Company "Even as affected retailers move to a more cash-focused approach to running their businesses, we think they'll benefit from increased investment in internal and external communication, especially if it's skewed to channels that are favored by customers and other stakeholders during periods of quarantine or self-isolation. That includes call centers, for both customers and suppliers, and social media, where resources will be needed to monitor and respond to misinformation—as well as performing the vital role of showing empathy,"
Conclusion-
At present, we are fighting against the demon that no one could see, and we also don't know how long we will fight it. But one is the thing for sure t we can't give up because there are many lives at stake who would perish if the industry takes a step back. Also, the critical lesson to learn is from Chinese retailers; how did they combat and brought the life back to normal. After seeing their struggles, we should be it should be engraved in our minds that digitization is the future. It's high time we realize our mistakes and pick-up from where we left. iDesigniBuy, a fashion tech company that offers digital customization solutions that will help retailers to deliver even during the time of crisis.
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