Every weekend, L'Hebdo des PME, the rendez-vous for small and medium-sized businesses. Jeanne Baron interviews the founders and managers of companies that stand out in their sector, followed by an interview with an expert in their field. In this issue, Cyril Besse looks at the 4 major issues to consider if you want to bounce back economically after the COVID-19 crisis.
The show was broadcast on BFM Business (June 20 & 21, 2020), France's 1st all-news business and financial channel.
In the wake of this unprecedented health crisis, many businesses are facing major difficulties. To cope with this situation, they will have to meet 4 major challenges:
1. Treasury
A number of retailers, such as Naf-Naf, Camaïeu and Alinéa, have filed for bankruptcy, as have many independent convenience stores that are little or not at all talked about. Other players, such as Conforama, are in dire straits. In addition to the burden of overflowing inventories, these players all have another thing in common: their lack of cash flow, caused by a very sudden halt to sales in the physical store network, not to mention the fact that this situation inevitably jeopardizes their suppliers for the same reason. In this context, whatever the 3-year strategy - there will always be time to get down to it once this period of great uncertainty is behind us - the urgent thing for them to focus on is to rebuild their cash flow as quickly as possible, in order to survive and regain investment capacity. To achieve this, there's only one watchword: Sell. Sell to clear inventories, sell to bring money into the coffers, sell to bounce back as quickly as possible, and get back on a profitable growth trajectory.
2. Omnichannel & Unified Commerce
The players who have best withstood the crisis are those who were strong ine-commerce, and the significant increase in e-commerce penetration we've seen is set to continue (sales up by around 40% in food and around 20% in non-food). With this in mind, a group such as Inditex (parent company of Zara, among others) has announced that it will be closing 1,200 stores worldwide to focus on e-Commerce and city-center flagships. Undoubtedly, the crisis will accelerate the digital transformation of retailers, in particular to better support and even rethink the customer journey with the persistence of barrier gestures, but also to accelerate the deployment of a unified commerce model. In fact, to cope with the crisis and the impact of confinement, some retailers have had to urgently deploy new models such as contactless Click&Collect or contactless home delivery, models that will now have to be industrialized and made profitable. Finally, local and regional authorities, as well as Chambers of Commerce and Industry, undoubtedly have a role to play in the digitization of convenience stores, which are unable to project themselves into e-Commerce and digitization on their own. Some towns, such as Angers and Nice, have already deployed local marketplaces during the crisis, enabling retailers to sell their products online.
3. Liability
The crisis has heightened consumer awareness of sustainable development. Even if this trend already existed before the crisis, the social and environmental responsibility of brands will become more than ever a vector of attractiveness, sales and consumer loyalty. According to a survey of 5,000 people on responsible brands conducted by Univers Retail in partnership with LSA, 60% consider that brands are not sufficiently committed to economic, social and environmental criteria. This study shows that, while brands have begun to adopt this approach, there is still a long way to go to inform and reassure consumers who are increasingly demanding and attentive to this social issue.
4. Supply Chain
The Supply Chain is probably a less visible challenge than the previous ones, but just as essential in meeting the first 3 challenges. Indeed, when we talk about sales, we're talking about inventory control and product availability, when we talk about Omnichannel or Unified Commerce, we're talking about customer promise and profitability of the model(s), when we talk about eco-responsibility, we're talking about traceability, relocation of production, .... The Supply Chain makes an essential contribution to meeting all these challenges, which are becoming increasingly important for the commercial and financial performance of retail chains.
