How some businesses stay afloat amid covid-19?
Covid-19 has effectively affected every line of business in a catastrophic way (apart from mask and protective suit manufacturers, pharmaceutical and healthcare companies and alike). Many companies are on the verge of running out of business such as airlines, tourism and hotels, entertainment, event management etc. Lay-offs due to covid-19 started first in China such as OYO Hotels, then now it rolls into America and Europe (e.g. MGM Resort, Norweigian Airline). But it is precisely at this challenging time that companies have to gear up to be ultra creative and adaptable. For me, it is fascinating to see how some businesses adapt to survive. Here are some observations I see around me, mainly in Singapore:
1. Shift of target population: as tourism drops, tourist-facing businesses turn their attention to sell to local residents. My son and I just enjoyed a discounted 2-dive package at iFly Sentosa for SGD$38 (usual R.P. $119). They also offer SGD$20 off a third dive or merchandise. This offer is extended to only Singapore citizens and permanent residents. I think equally hotels can offer weekend staycation package, birthday, festival package to maintain some level of business (of course, it will have to make sense with the running costs).
2. Offer discounts: To keep cash flows, offering discount is perhaps the most common strategy. However, companies must also be aware what it is that they really need to offer discount (if it will really help the sales) and what not. When traveling was still allowed, hotels and airlines were offering massive discount to fight for survival. However, when traveling restrictions are now tightened up with state policies after the announcement of global pandemic on 11 March 2020 by World Health Organisation, then perhaps reducing flights and offering a standard price for those essential travelers makes more sense.
3. Mode of delivering the product/service: I have witnessed a few smaller scale of enrichment and tuition centers in China and Singapore delivering their classes online via video-conferencing applications. While it brings inconvenience to both parties, and it may not be effective as face-to-face teaching and it may not be liked by many parents and children, it is after all a way to keep the business running. And some of these classes, if well taught, could remain in sale, at a lower price forever, creating a passive income.
4. Flexibility: Earlier Scoot airline from Singapore has just announced that they allow one time change of flight for free due to fear and uncertainty on travel plans. Quantas and Jetstar airlines have also allowed cancellation in exchange of a travel voucher to be used a later date. This way, companies could at least secure some cash upfront to stay afloat.
5. Care and Compassion: Sometimes customers are put off because of fear, not just regulation. So more than anything, companies need to show their care and go the extra miles to assure customers. I just received an email from Amped Trampoline park informing customers of their measures for the covid-19: keeping social distancing in the trampoline park, cutting capacity to avoid crowding, monitoring entry of participants with symptoms or recent travel history, and promoting of good hygiene of frequent hand washing, offer of hand sanitizes and disfecting surfaces twice daily, on top of booking flexibility (free change within 12 months). I have seen companies who decided not to refund to cover their bottom line and needless to say they have upset some customers, then there are companies who decided to refund for the sake of long term relationship.
6. Thinking out of the box: When tourists reduce and indoor attraction ticketing suffer, offering activities outdoor is a wise strategy. Human close contact is minimized and ventilation is much better in an outdoor environment. Sentosa, the famous resort island in Singapore that caters mostly tourists, is now putting on Magical Shores — a multi-sensorial light and sound show. There are beautiful shows displayed on the beach and some of them will follow your steps as you walk and jump. The restaurants around these shows are actually full to the point that they couldn’t deliver our dinner as they are serving an event.
Small vendors may be more agile than large companies. In early February, I read about a fruit vendor in Hong Kong, at the onset of the outbreak, has overnight changed to be a surgical mask-vendor. But, what big companies have is multitude of talents. They need to pick on their intelligence to come up with innovative solutions. During the calamity of covid-19, business are challenged to the extreme but creativity and adaptability will prove to be an eternal asset.