When it comes to business, the magic word during the COVID-19 pandemic has been“pivot”. We’ve seen a plethora of examples of companies shifting their focus to join the fight against the virus and to continue to provide services to customers who largely have been homebound.

UK vacuum manufacturer Dyson made headlines in the spring for striking a deal with the British government to provide thousands of ventilators. In the United States, Ford and GM also pivoted to manufacture ventilators. Clothing manufacturers have been churning out masks, and movie studios have been skipping theatrical releases and instead charging a premium for streaming new movies.

With business closures and the economic slowdown the pandemic has brought, many businesses have had no choice but to pivot to continue to be profitable. But how can an organization know which changes to business strategies are wise? Experts have set several criteria for success during the pandemic and beyond.

A pivot must align with long-term trends, as well as short-term demand

Black Diamond Distillery in Alberta, Okanagan Spirits in British Columbia and Duvernois Creative Spirits in Quebec joined distilleries and breweries across the country – and around the world – this spring when they began manufacturing hand sanitizer to help meet market demand.

While many businesses were doing this to fill a critical need, business experts say that pivoting business models needs to go beyond the short term. Instead, businesses should examine demands that have intensified as a result of the pandemic economy but are also likely to be a continued need, even as the pandemic fades and the economy recovers.

Business models adopted by gyms and fitness centers that were shuttered due to the pandemic provide an example. Many began streaming classes to allow members to work out at home. Even as gyms reopen and clients return, gyms could continue to capitalize on recorded or livestream classes for clients who prefer the flexibility or privacy of being able to workout at home while still maintaining the community created by the gym.

Pivoting company operations should be an extension of the business’s offerings.

There are plenty of stories of businesses whose offerings took unexpected turns to meet up with pandemic demands. And for some, retooling their on-hand supplies to meet a current, short-term demand may have been necessary to survival.

As businesses continue to adjust to the pandemic economy, and look beyond it, any changes to business strategy should be an extension of the company’s current business model, uphold the brand’s long-term vision and be sustainable.

One example of this is furniture designer and manufacturer POV. The company saw a slump in sales when the pandemic shutdown began, but as people began purchasing desks and improving their home spaces sales, the company saw a drastic increase in sales that encouraged them to pivot their sales model. Traditionally, the company has sold goods through its North Carolina showroom, physical furniture stores and online through Wayfair. To keep up with the accelerated demand, POV ventured into eCommerce, which allowed them to capitalize on the fact that the pandemic had pushed
the demand for furniture sales, which typically is seen in brick-and-mortar stores, online. Not only has the move helped bolster POV’s profits this year, company officials have said they expect to see eCommerce furniture sales continue to grow.

Pivoting business should make use of existing resources

Food, beauty and personal hygiene conglomerate Unilever demonstrated how brands should pivot to meet the demands of the pandemic economy by making use of their existing resources. Rather than exploring new avenues to adapt to the market, Unilever began putting resources into divisions that manufacture hand sanitizers and other in-demand products. They changed marketing strategies to focus on online marketing to reach consumers who were now grocery shopping online.

On a smaller scale, there are countless stories of restaurants who have made similar moves to use their food supplies, expertise and other resources to pivot their business models. Many had to move to take-out only models after dining rooms were forced to be closed by government order. Others began preparing take-home meal kits or creating “ghost kitchens” – restaurants that carry a name and menu on meal-delivery apps but
operate out of another restaurant or commercial kitchens.

Sustainably pivoting business beyond the pandemic

As COVID-19 began to sweep the globe, forcing business closures and rapidly changing consumer behavior, businesses had to adjust quickly. But as the pandemic economy has become a fact of life rather than an emergency situation, it’s time for businesses to look at how they will sustainably pivot and grow under the dramatically different consumer
economy. That means being sure that pivots to the business model meet both short-term and long-term market needs, adhere to the company’s values and vision, make use of the company’s existing resources and offer sustainable growth and support a sustainable business model.

The post 3 key ways companies are pivoting business models to stay profitable amid the pandemic appeared first on Trade Ready.

As restrictions continued to loosen and more businesses opened up, Canadian businesses continued to feel the impact of mandated closures and reductions in service this summer due to the COVID-19 pandemic.

The Canadian Chamber of Commerce, with help from Deloitte Canada, surveyed businesses between May 30 and July 3 to determine the financial repercussions of the pandemic and to gauge the economic and operational outlook as the pandemic continues to affect the economy. The chamber released the results in the second wave of the Canadian Survey on Business Conditions.

Not surprisingly, a majority of businesses reported negative affects to profits, as well as dramatic changes in operations, the survey showed. Most businesses also reported that they were continuing to make short- and long-term changes to adapt in the pandemic economy.

Business see profits decrease; some worry about survival

Business revenues have been impacted in a big way, according to the survey. Not only did businesses have to deal with mandatory closures or dramatically reduced crowds, but supply chains and distribution also affected businesses’ abilities to meet their customers’ needs. Comparing April 2019 and April 2020, revenues were down for 70% of businesses. Thirty-five percent of those businesses reported that their revenues were down more than 50% over the previous year.

Facing such revenue drops amid the ongoing pandemic economy, a significant percentage of businesses also are worried about their ability to survive until the economy recovers. Thirty-percent of businesses that responded to the survey said they did not believe they would be able to weather another year of the current political climate, and additional 33% said they were unsure of whether they would be able to withstand another year of the pandemic economy. Only 37% of businesses responded that they were confident that their businesses could last 12 months or more of the current situation.

Minority-owned businesses seem to be most on affected. While 29% of businesses owned by people who were not minorities, 29% said they felt they could not last 12 months or more of the pandemic economy. In contrast, 46% of LGBTQ-owned businesses, 43% of businesses owned by visible minorities, 40% of businesses owned by people identifying as First Nation, Métis or Inuit, 35% of immigrant-owned businesses and 30% of women-owned businesses said they could not survive a year or more.

On the bright side

There is one bright point from the survey. Layoffs decreased as the pandemic began to affect the economy, with 40% of businesses saying they laid off staff in March versus 28% who reported making layoffs in May. Five percent of businesses reported that they already had increased staffing, and an additional 15% said they would need to increase staffing in the next three months. Six percent of businesses reported that they increased staff compensation between March and May.

How Canadian businesses are surviving the pandemic

To stay afloat during the pandemic, Canadian businesses have deployed a variety of strategies. Sixty-four percent of businesses reported taking advantage of government programs and emergency funds. Of those, 43% took advantage of the Canada Emergency Business Account, and 23% took advantage of the Canada Emergency Wage Subsidy, and an additional 18% took advantage of the temporary 10-percent Wage Subsidy. Five percent relied on programs from financial institutions, and 3%utilized Canada Emergency Rent Assistance. Only 16% of businesses reported using rent and mortgage deferral programs.

Businesses also have gotten creative about the ways they are managing customer relationships during the pandemic. Half of businesses said they added new ways to interact with or sell to customers, such as curbside pickup and physical distancing between staff and customers. Twenty-seven percent of businesses said they altered the products and services they offered to continue to serve customers, and 25% said they utilized ecommerce or virtual connections to customers. Mandated government closures affected 26% of responding businesses.

Internally, businesses have altered their operations. While some businesses have shown that they are bringing employees back to work in house – 18%of businesses reported having their entire workforce working remotely in March versus 14% in May – most businesses acknowledge that remote work will continue for many employees. The percentage of businesses responding that less than 20% of their workforce was remote dropped from 85% to 74%, and the remaining percentages of businesses with employees working remotely shifted upward in every category.

Moving forward in a pandemic economy

The Canadian Survey on Business Conditions also shows that the pandemic has led to some short- and long-term effects, as businesses look to keep employees safe and virus-proof their operations. Twenty-six percent of businesses said they are altering their physical work space to create greater physical distances between employees. Eleven percent of businesses said they are giving more employees the opportunity to work from home, and 10 percent of businesses are investing in telework systems to make remote work more secure.

To reduce touchpoints with customers, 21% of businesses said they are increasing touchless pickup or delivery options, and 18%said they are increasing their online sales capacity. Business also reported that they are looking to improve sanitation of workspaces, invest in personal protective equipment and diversify supply chains to reduce pandemic disruptions.

Undoubtedly, the coronavirus pandemic has upended the economy, and Canadian businesses have felt the repercussions. Most are making changes to the way they do business to remain competitive, and they will continue to do so to, hopefully, withstand the duration of the pandemic’s economic impacts.

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