Pivot work

Business & Finance, Quotable Magazine

How to Pivot in the Age of the Pandemic 

Pivoting your business can require agility and strategy in even the most bullish of times. During the pandemic and the economic decline, this is even more true. As of October 2020, certain sectors are still down by 23%, while other sectors are starting to recover [1]. From businesses that were performing with low margins pre-pandemic to businesses that were financially established, it appears that most businesses have had at least some form of hardship during the pandemic. Despite these roadblocks, many businesses have succeeded at making small pivots within their businesses to survive and even thrive during this pandemic. 

What some businesses have done to stay afloat and even thrive during the pandemic: 

Travel, Hospitality, Food and Beverage  

The travel, hospitality, and food and beverage industry have famously been hit hard during this economic crisis. According to a survey of 100,915 small businesses by the Census Bureau, 83.5% of businesses in the food and accommodation sector experienced a negative effect from COVID-19 [2]. This probably does not come as a surprise to anyone in the restaurant industry, as 40% of small businesses in the restaurant industry are normally operating at a loss or are breaking even [3].

Companies like Panera and Chipotle have added offerings to cater to customer needs during the pandemic. Panera created their “Panera Grocery” service in response to the supply chain issues that many grocery stores were experiencing [4]. Panera already had access to many of the ingredients that people were looking to buy from grocery stores and leveraged the opportunity [5]. Chipotle began offering a “digital kitchen” service, basically so that customers could order for pick-up. The digital orders for pickup grew very fast and Chipotle hired 18,000 new employees between May and July to respond to the success of the service [6]. 

Philadelphia-based, Performance Meal Prep, a meal prep delivery company, was poised for this type of crisis from the outset of the company. This company was initially created to target athletes, delivering fully prepared meals, but has since grown to become one of the largest meal prep delivery companies in the Greater Philadelphia area. Because the company was already offering online ordering and is a delivery based company, when the demand for this type of service surged during the pandemic, Performance Meal Prep was ready. The company saw the business increase threefold during the pandemic. In addition to their regular meal prep delivery service, they launched a grocery delivery service that likewise saw great success. Similarly to Panera, the company’s owner and chef, Jesse Batt, said he noticed the surge in demand for grocery products that the company already had access to as ingredients for their meals. Jesse told us that the meal prep delivery service is the main source of growth during the pandemic, although grocery delivery has also contributed to the revenue increase. 

Airbnb initially struggled during the pandemic. However soon enough, co-founder and owner of Airbnb, Brian Chesky, noticed that consumers were increasingly looking for stays outside of cities, but staying geographically close, and were navigating away from hotels due to their shared spaces. In August, more than half of Airbnb’s bookings were for stays within 300 miles of the guest’s location. Chesky pivoted Airbnb’s marketing strategy and changed the algorithm to show consumers scenic getaways that are geographically close to where they lived. Since Fall 2020, bookings are close to pre-pandemic levels [6]. 

Supply Chain 

The beginning days of the pandemic were full of internet memes about grocery stores running out of toilet paper. What businesses and consumers soon came to understand is that the toilet paper shortage was due to a bigger issue. Many companies’ supply chains were impacted by the pandemic. Back in February, Fortune magazine reported that 94% of the Fortune 1000 companies reported coronavirus-related supply chain disruptions [7]. The main proponents of these supply chain disruptions came from inefficiencies within suppliers of raw materials and manufacturers. This occurred because of safety restrictions, import/export restrictions [8], changes in demand for certain products, and the supply chain’s inability to pivot to meet that demand. This caused a “bullwhip” reaction that threw off the supply chain on a global scale [9].  

Supply chain companies that have performed well during the pandemic were already catering to shorter supply chains, like Shopify [10].

Reports of the direction that the supply chain management industry is moving in indicate that artificial intelligence (AI), industrial internet of things (IIOT), enterprise resource planning (ERP) systems, and material resource planning (MRP) systems will be essential to curtailing such supply chain crises in the future [9].  

Automotive 

Car dealerships traditionally operate with one-on-one and in-person sales. One auto dealership in Glen Mills, PA, David Dodge, pivoted their business model to suit the needs of their customers during the pandemic. They strategically re-arranged the center to minimize contact and salespeople manage customer relations via phone, email, text, Zoom, and FaceTime test drives. Some customers would do the full deal online and David Dodge would deliver the vehicle to the customer’s door [5]. The result of this pivot was more monthly sales than they had had in over 15 years [10]. 

Consumer Goods 

Certain consumer goods manufacturers and retailers were already struggling pre-pandemic. Certain trends have been growing in the consumer goods sector for some time, such as e-commerce, retailers launching their own products, touchless payments, curbside pickups, automated fulfillment, omnichannel marketing, digitized order taking, delivery, and customer service [11]. During the pandemic the need for these innovations sped up. Companies that were already ahead of the curve in these technologies have been thriving during the pandemic, while other companies that have been slow to adapt have been hit harder. 

To sum up our research, companies that have been adopting new technologies and adapting to modern times of consumers wanting increased convenience and fewer points of contact have likewise been quick to adapt to the new conditions of the pandemic. Companies that have been quick to adopt these practices have likewise thrived. 

..

References: 

[1] Callen, J. (2020, May 14). Weekly Census Bureau Survey Provides Near-Real-Time Info on Businesses. United States Census Bureau. https://www.census.gov/library/stories/2020/05/new-small-business-pulse-survey-shows-breadth-of-covid-19-impact-on-businesses.html

[2] Dua, A., Mahajan, D., Oyer, L., & Ramaswamy, S. (2020, July 7). US Small-business Recovery After The Covid-19 Crisis. McKinsey & Company.  https://www.mckinsey.com/industries/public-and-social-sector/our-insights/us-small-business-recovery-after-the-covid-19-crisis 

[3] Munjal, D. (2020, July 9). The Great Pivot: 5 Tips for Pivoting During the Pandemic. Crunchbase. https://about.crunchbase.com/blog/5-tips-for-pivoting/

[4] Panera. (2020, April 8). Panera Announces Launch of Panera Grocery. Cision PR Newswire.  https://www.prnewswire.com/news-releases/panera-announces-launch-of-panera-grocery-301037168.html

[5] Colvin, G. (2020, Aug 31). 5 Businesses that Pivoted to New Business Models Creatively During the Pandemic. Fortune. https://fortune.com/2020/08/31/covid-business-models-pivot-coronavirus/

[6] Rana, P, & Farrell, M. (2020, Oct 12). How Airbnb Pulled Back from the Brink. The Wall Street Journal.  https://www.wsj.com/articles/how-airbnb-pulled-back-from-the-brink-11602520846

[7] Sherman, E. (2020, February 21). 94% of the Fortune 1000 are Seeing Coronavirus Supply Chain Disruptions: Report. Fortune.  https://fortune.com/2020/02/21/fortune-1000-coronavirus-china-supply-chain-impact/ 

[8] Interos. (2020, Oct 1). New Report Illustrates Severity of COVID-19 Impact on Global Supply Chains, Risk of Further Disruption: Aerospace and defense industry hardest hit thus far, but heavy impact felt across industries; continuous supply chain risk monitoring is imperative. GlobeNewswire. https://www.globenewswire.com/news-release/2020/10/01/2102234/0/en/New-Report-Illustrates-Severity-of-COVID-19-Impact-on-Global-Supply-Chains-Risk-of-Further-Disruption.html

[9] Williamson, C. (2020, Sep 1). The Supply Chain of the Future Isn’t Afraid to Pivot. Forbes. https://www.forbes.com/sites/corywilliamson/2020/09/01/the-supply-chain-of-the-future-isnt-afraid-to-pivot/#5f19830d45e4

[10] Guillen, M. (2020, July 7). How Businesses Have Successfully Pivoted During the Pandemic. Harvard Business Review.  https://hbr.org/2020/07/how-businesses-have-successfully-pivoted-during-the-pandemic

[11] Brown, B., Hirsch, L., Schmutzler, R., van Wamelen, J., & Zanin, M. (2020, Aug 10). What Consumer-goods Sales Leaders Must Do To Emerge Stronger From The Pandemic. McKinsey & Company.

 

Sheena Pradhan is a serial entrepreneur, marketer, and lover of personal growth. She started her career as a Registered Dietitian with a private practice and established herself as a beauty queen, model, actor, and writer. In 2017, she started a food tech company called Bodybuilder Kitchen out of her parents’ kitchen. She had success with this company quickly. Bodybuilder Kitchen was profitable for 3 years. In 2019, Sheena decided to close the company to focus on a career in marketing. She is currently working as a marketing consultant with expertise in data analytics, business development, social media, email marketing, and CRM.

How to Connect with Sheena Pradhan

Website: www.sheenapradhan.com

LinkedIn: https://www.linkedin.com/in/sheenapradhan/

Data Analyst: https://public.tableau.com/profile/sheena.pradhan#!/

YouTube: https://www.youtube.com/user/sheenapradhan

Instagram: @sheenapradhan

Twitter: @sheenapradhan

Facebook: https://www.facebook.com/sheenapradhanofficial

Leave a Reply

Your email address will not be published.