Happy Foodie Friday! This week our food-themed screed takes us to the land of alcohol, a place that I have a feeling many of you have visited several times over the last few weeks as a scenic detour in your home confinement. Like many of you, part of my very limited activities over the last little bit has been the often quixotic search for hand sanitizer and toilet paper. The good news is that toilet paper seems to be much easier to find of late while sanitizer remains elusive.
There are many small distilleries near where I live which make everything from vodka to rum to moonshine (hey, it is the South!). Many of them have converted their processes over to produce hand sanitizer which is after all, alcohol-based. One place nearby is selling their sanitizer by the gallon at prices which are reasonable, thereby doing both their shareholders and our community a service. Why the shareholders? Because many of their customers, along with those of their competitors, happen to be restaurants and bars, which are closed except for carry-out. Booze sales are confined to beer and wine in the carry-out world for the most part. That’s our thinking point today.
These businesses have managed to pivot from making one in-demand product to another. This pandemic has caused many other businesses to rethink how they do things as well and to make some changes. For example, I represent a number of companies that run after-school programs. With no school (and no gatherings allowed), most of them have pivoted to providing those programs online. When things calm down, they’ll return to their old model but most indicate they’ll keep the new, online model as well since it seems to be working quite well.
Another example. Companies are cutting down on non-essential costs. They are reallocating their budget from physical in-person processes such as travel, conventions, etc. into digital or virtual tactics. If your primary sales channel is trade shows, are you ready to pivot to some other model since consumers might be wary of large gatherings such as home shows and business buyers may not be allowed to travel to whatever conventions remain?
Has online commerce been an afterthought for your business? My guess is that many brick and mortar firms are rethinking how they approach digital. Yes, all retail sales have dropped. Consumers are restricting their purchasing to essentials, understandably. But it won’t be this way forever. As CNBC quoted one analyst,
“Major retailers who sell goods outside of apparel and furniture – two of the hardest-hit categories – will likely weather the downturn, along with many direct-to-consumer brands that were doing well before the pandemic. Instead of bulldozing the entire retail market, the pandemic is more likely to accelerate the decline of the “boring middle of retail,” such as Sears, J.C. Penney, Macy’s and Kohl’s.”
Those are companies that didn’t invest in the online space before and who can’t keep up with the big guys or the specialty online brands. They can’t pivot.
Being able to pivot is going to be critical as the new world emerges. Can you turn your booze into sanitizer without missing a beat or will you have to rip the whole business down and start over?
Consult Keith 