Business Transformationin Times of Crisis
Local family businesses or large corporations - how could they survive during the Coronavirus lockdown
Business activities suffer severely due to the current Coronavirus pandemic. It is a global problem and Bulgaria makes no exception. Local authorities locked down hotels, restaurants, hairdresser salons and shops more than a week ago. In most cases those are sites located in urban centers, suburbs and large shopping centres. Those businesses are all greatly affected by the suspension of their activities. The coronavirus related measures forced many owners to make fateful decisions about the future of their businesses. Some are focusing on digitalisation and ecommerce, which is considered a lifeline in the crisis. However, others may not respond as quickly or would need to think in a different direction. It’s not just small family businesses that are affected by the restrictive measures. Big merchants - hoteliers, transport services, factories, consulting and intermediary companies also suffer serious losses during a state of emergency.
In this post we will touch upon some of the ways that brick and mortar businesses could change their habits while trying to retain their customers.
Transformation in the food industry
In many places around the world - US, Australia and Europe, local restaurants are turning into shops. The lack of small grocery shops in those countries prompts restaurateurs to think flexibly. On the one hand, they continue to produce take away food for their customers while on the other they also sell many essentials that are vital to people in times of distress - cleansing and hygiene products, kitchen towel paper and more.
The same could easily happen in Bulgaria. Since the early days of the blockade restaurants have been focusing on home deliveries through online delivery platforms. It’s just that people are rarely inclined or could afford the same restaurant food as before the crisis. Restaurants need to be flexible in terms of menus, drinks, and more. However, they would benefit more if they transformed into shops in order to offer ready-made food from a limited menu in a hot buffet, as well as wine from local producers on a special rate. It would be even more successful if restaurant and shop owners could lend a hand to the local producers of fruits, vegetables, meat or dairy products who are in fact their fresh food suppliers. Restaurant owners would benefit if they began to sell their produce on stands, as in a shop. Of course, this transformation is not about changing the permanent purpose of business according to the Bulgarian legislation but a temporary and rather informal change.
We believe this is entirely acceptable from a legal standpoint, since the restaurateurs already have all the necessary papers. The only additional thing they would need to do is set apart corners for fruits and vegetables and transform the refrigerators so they could store other products. Hence, all restaurants could function almost seamlessly in a state of emergency and in full compliance with all safety regulations.
Digitalization is no longer a matter of luxury but a true necessity. Below we look at the possibilities for a successful digital transformation.
Digital transformation - current challenges and possible solutions
The good news for business is that although customers are at home, they have not disappeared, nor did they change their needs dramatically. The main challenge for traditional business is to build reliable digital channels and reach their customers. Those efforts may include an online store (as we mentioned above), a Facebook page, an Instagram account, a YouTube channel, a blog, or in the best scenario a combination of all to maximize impact and brand identity.
Digital business presence is no longer just an extra mile for those who would want to look more creative and contemporary. In just a few weeks digital business image has become a major factor for survival.
As far as eCommerce is concerned, according to Statista (2020), annual sales generated online in Bulgaria amount to about 700 million Euro, which is just 1.3% of GDP (compared to 2018 data). The e-business sector is still relatively underdeveloped, which means digital transition is an utmost priority for most traditional businesses.
Looking for a potential solution, we could turn to the most popular and affordable digital channels that some marketers already use in their daily lives and slowly but steadily build on a complete and unique online brand.
Facebook and Instagram are extremely powerful marketing tools freely available to anyone with internet access. They are also good channels to keep in touch with current customers because they build a sense of belonging and brand loyalty.
Furthermore, marketers could consider a fully-fledged eCommerce website integrated with the already established identity on social media. The rest is a matter of promotion strategy, appropriate marketing campaigns and constant efforts to engage the right target audience.
It is important to note that we should not treat investments in building a digital business identity as some sort of a temporary lifeline for as long as social exclusion and quarantine rule over. Digitalisation is a strategy, plan for action and a business culture for successful and sustainable business operations in the realm of digital economy.
Digitalisation, the Cloud and Industry 4.0 - Outlook to the Future
Business digitalisation improves the way organizations store, analyze and manage data. Moving away from paper is enough of a challenge but it is just the beginning. If you have heard of Industry 4.0 then you probably already know that the defining keyword is "connectivity". Imagine a world where everything is connected and exchanges information through the Internet. It is data and information that connect computers, machines and humans.
With the progress of technology, it is now possible to transfer large volumes of data quickly and reliably.
This fact creates the right environment for the development of successful business digitalization. Apart from infrastructure, the preparation of individual businesses is also of particular importance for the success of this process. Most business organizations handle huge amounts of data that they often fail to control effectively.
The phenomenon of the cloud and the so-called SaaS (Software as a Service) solutions come to the rescue. A leading concept hereby is the technical relief for the business that does not have to build expensive and inefficient IT infrastructure in order to achieve certain business goals. Just imagine that we had to build our own power plants at home.
Cloud technology allows us to quickly and easily access the data we need from any device anywhere.
In conclusion, it is good to bear in mind that the success of digital transformation for any organization translates to a successful partnership with an experienced consultant. According to a 2018 McKinsey report covering a five-year period, only about 20% of companies succeed in their digitalisation efforts due to the fact that the process is complex and requires not just planning but a clear strategy and flawless communication.
The content of this publication represents the authors’ personal opinions and does not claim to be exhaustive. As each situation is unique in itself, it must be considered on its own. If you are experiencing similar difficulties or have more questions about the current situation, do not hesitate to contact us by email: email@example.com or by phone: +359 32 666 990, and get personalized advice.