Many suffered from the impacts of the COVID-19 pandemic. People lost lives and jobs. Businesses had to halt operations due to state restrictions. Yet, some businesses remained on the surface despite the global struggle. How is this possible?
The keys to survival are smart financial and marketing strategies. Some businesses managed to stay afloat by maximizing the use of technology. That is because online shopping boomed during the pandemic. A lot of businesses cut off on their expenses by reducing employment and services. Meanwhile, some decided to take risks. They either closed up or offer high demand products. Many organizations also offered monetary help to small and medium-sized enterprises (SME).
If you plan on building your own fitness brand soon, then one thing’s for sure. You’re in for a challenge. So to help you out, let’s talk about the ways to keep your fitness brand booming in the new normal.
We know how badly the outbreak affected our personal lives. But what about business? The pandemic had a devastating effect on the economy. Most especially on small businesses in almost all aspects. However, just because it’s difficult doesn’t mean it is impossible.
To create a good financial strategy, make sure that it solves all issues you encounter. This anticipation gives you the upper hand on the whole situation. Of course, this is impossible without an idea of how the pandemic affects your business.
So to start, we’ve rounded up some of the biggest impacts of the COVID-19 pandemic on sports brands.
As you might already know, logistics is the key to success. It takes care of transportation of resources, warehousing, and inventory management. It is also important for global trade. However, logistics suffered a lot during the pandemic. It is one of the industries that were mainly affected by state restrictions.
This effect was first experienced in China. Then, it spread globally. Lockdowns were then implemented. Shortly, cargo issues, canceled shipments, and employee shortage happened. Plus, added expenses, limited workers, and quarantine requirements increased costs.
We can observe this in all three major transportation systems:
DHL says 10.1% in ocean freight dropped in early 2020. Also, routes will continue to suffer because of low demand. These routes are those between Europe and Asian, Latin America, and the United States.
There has been a decrease in passenger flights and Chinese manufacturing. Hence, causing air freight volumes to drop. However, the government depends on it to deliver essentials. Thus resulting in higher rates according to Forbes.
Land freight is unlike the previous two transport methods. It still remains available for some more lenient countries. However, because of the high demand we experienced truck shortage. This is according to DC Velocity. In addition, rates increased because of limited workforce.
According to RAND Corporation, 67% of respondents are most affected by low demands. The threats of sudden lockdowns and state restrictions have encouraged people to prioritize essential goods. Most especially when these run out the quickest in grocery stores.
Consumers adopted this behavior because of product shortages during the early months of the outbreak. Since non-essentials are not necessary for survival, consumers hold-off on these purchases. A study by Robert Fairlie revealed that business owners dropped an alarming 3.3 million during these months. This is one of the factors that contributed to the great loss between February to April 2020.
Although practical, this is not good news for non-essential brands. Being the least priority simply means lesser demand and profit. So you’re going to need a brave spirit to build your sports brand in the midst of the pandemic.
During the early months of the COVID-19 outbreak, physical stores closed for safety precautions. This is commonly observed in countries on complete lockdown. Countries like China, South Korea, and India. Because of this, many people had lost their jobs and physical stores had gone bankrupt.
Now this effect is self-explanatory and easy to digest. People had to stay at home because there are no stores open. Some were also too scared to leave their homes. Hence, we observe a decline in purchasing power in physical stores.
In order to cope up with this, a lot of businesses shifted to an online setup according to Jagdish Sheth.
This is a smart strategy. However, this is a nightmare for physical stores with less resources. With the sudden rise of online shops, less people are wanting to go out to buy goods. That is despite the lifting or quarantine protocols. It is more convenient and safer that way compared to leaving the comforts of their homes.
As expected, small and medium-sized businesses suffered the most during the pandemic. After forcing businesses to halt operations for a few months, the economy fell. Millions of businesses closed permanently and some went bankrupt. Majority of these, according to JP Morgan Chase and Co., are companies that are more financially fragile. Meaning, their revenues cannot keep up with the sudden drop of demand and profit. This shows us the value of financial flexibility – a privilege enjoyed by a few.
In addition, we also encounter hoarding of goods. This refers to people buying essentials in bulk at once to stockpile goods. This ‘stockpiling’ consumer behavior and is mainly the reason for shortages and stockouts.
Perhaps it would’ve been alright if these were for personal use only. However, desperate times call for desperate measures. Some people are hoarding essential goods to resell them at higher prices. Since it is in extremely high demand, people are forced to buy from them. That’s because they already bought everything at the grocery stores. Furthermore, the high demand encouraged groups to sell fake products. Always be wary of these, as these can be very dangerous.
The number of negative effects the pandemic has on SMEs is almost endless. But somehow, there are still a few who can see a silver lining to all this. In relation to the third impact, online selling platforms and businesses are booming. Thus using an online platform became the gateway to heaven. That is for both small and large businesses. Many flourished from it.
In addition, the whole online set up is much easier to manage, track, and maintain. According to a survey by Rand Corporation, 15% of respondents say it allows for an easier increase of domestic demand. Meanwhile, 14% said it made it easier to offer and promote new in-demand products.
For instance, you may have noticed a lot of brands using this trick. That is to release new in-demand products during the pandemic. By in-demand products, we’re talking about face masks and PPEs. These are not commonly found in sportswear shops. However this strategy is a smart way to keep the profit coming. Some brands have even innovated these products to make them more suitable for customers.
Let’s assume that you’ve just started your business and you have limited finances and resources. How do you cope with the impacts of the pandemic on SMEs? Small and medium-sized businesses have come up with their own several ways to keep up with the economic drop. Some reinvented themselves. Some temporarily closed. Some cut off on expenses, while unfortunately many had gone bankrupt.
Not all methods turned out effective. However, there are notable ones that were capable of keeping businesses alive. Despite the global restoration, you will need to take precautionary methods. Especially with the threat of the new COVID-19 variant – Omicron.
Let’s talk about five of the most effective strategies for SMEs in the new normal.
First and foremost, the all time favorite – technology. The rapid advancement of technology has become businesses’ saving grace in the midst of the struggle. Digital tools paved the way for business innovation and reinvention. For example, many physical shops had moved to an online setup to ride the waves of online shopping.
However, as stated by National Portal of India, shifting to an online setup is not feasible for all. For instance, you cannot create an online gym complex or massage parlor. However, if we focus on retail products and sportswear brands then this method is perfect. This helps keep your business afloat and generate income.
Furthermore, because of the lockdown a lot of people resorted to stay at home fitness. These people will most likely purchase their equipment and clothes online. But how exactly do you maximize the benefit of technology?
Here are some tips from us and SME Strategy:
- Attract customers with a well-established online website.
- Promote on social media
- Use Web-based Payments
- Track User Engagement with Google Analytics
- Protect Your Business with Backup Software
- Hire Virtual Assistants
When you reinvent the nature of your business, expect that there will be adjustments in staff and services. A lot of businesses who had moved to an online setup had to let go of employees to cut off on expenses. For instance, in an online setup you wouldn’t be needing salespersons and the like.
Rand Corporation reveals that more than half of their respondents had to scale back on products and salaries. This helps them manage their finances better and give way to more in-demand products. Hence, Cose suggests that you carefully consider the staff you need in your business. Think about which positions can be done at home. Also know where to find replacements for manpower loss. This way, you’ll know that all your money goes somewhere productive.
As a non-essential business, you may be the least of people’s priorities at this time and age. According to Cose’s Crisis Planning, it is important to see how far you can adjust your business. Can you produce medical supplies? Can you produce essentials? All of these are in high demand and if you can adopt any of these then that is great news.
As a sportswear brand, what you can do is to create products that make it easier to workout in the new normal. A lot of sports brands, for example, have mass produced face masks. Specifically, masks that are made specifically for vigorous activities. You also may want to lay off on outdoor activewear, and promote home fitness wear instead.
Fortunately, a lot of countries have lifted the lockdown. Others, became loose on restrictions. Because of this, people are looking forward to outdoor activities including fitness. Many people have also gone back to their routines. Since you’re planning your own sportswear brand, then this is great news for you. This simply means that you should expect a boom in your sales these months.
According to Hostinger Tutorials, sportswear items ranked fifth on the top trending fashion items in 2021. These clothes are referred to as ‘athleisure’. For more ideas, here are other trending items that you can incorporate in your sportswear business:
- Wearable fitness trackers
- Home Fitness Tools (e.g yoga mats, resistance bands, etc.)
Last but not the least, external support also helped SMEs a lot in their survival. Many governmental and non governmental groups helped in providing financial assistance. Both local and international groups. They collaborated to lessen the negative impacts of the crisis to these businesses.
This assistance really gave SMEs a boost. According to the Journal of Innovation and Entrepreneurship, it stopped SMEs from complete collapse. Here are some free government grant programs that aid small and medium-sized businesses from US Chamber:
- COVID-19 Economic Industry Disaster Loan – Businesses in low-income communities can receive up to $10,000 in assistance in Targeted EIDL Advances.
- Small Business Innovation Research Program (SBIR) – Gives small businesses the chance to hone their scientific excellence and innovation.
- Small Business Technology Transfer Program (STTR) – Similar to the SBIR, but you need to be working with a research institution to qualify.
- US Small Business Administration State Trade Expansion Program (STEP) – Assists small businesses financially and aids in exporting goods.
But of course, this is only a bonus. In the end, all this financial assistance will be put to waste without a financial plan. Furthermore, you should always remember that this aid is temporary. It will all depend on how you manage these additional finances. If you spend smartly, expect success. Otherwise, expect the worst to come.
During this time, people became more innovative and strategic in their plans. In addition, governmental and nongovernmental groups collaborated in providing assistance. SMEs had to prioritize survival.
Hence, they gave utmost focus on their marketing and financial strategies. Many maximized the use of technology. That is by reinventing themselves from physical shops to online businesses. Also, some decided to cut off on expenses and employment and decided to offer in-demand goods.
In the end, what works for someone else will not always work for you. Thus, it is important that you are aware of your own limits and capabilities. As a business, this helps you tailor the best strategy for you.