Adaptations That Businesses Have Made Due to the Pandemic That Will Last Into the Future
At Stratus Wealth Advisors, we work with a number of independent retailers in the lumber, building materials, home center, and hardware industries. As essential businesses, these companies have had to come up with creative ways to deliver products to homeowners and contractors, especially since so many people have spent money upgrading their home living space or finishing do-it-yourself projects that got put off pre-COVID. One of the biggest changes these businesses have faced is how products are delivered to customers. Buy-Online, Pickup In-Store (BOPIS) and delivery services have become a critical service for these businesses, and the convenience to customers has ensured that these options will continue to drive a large part of revenue going forward.
With the increase in BOPIS and delivery, these independent businesses have had to make an investment in their technology. If a customer cannot see a real time inventory of the products the retailer has to offer, it is easy to lose that customer to a competitor who has an online shopping portal that provides a current look at all the products that are in stock. Further, with the continued disruption to supply chains (e.g., lumber shortages), it is vital that these businesses can be transparent with their customers about what products are available. If a home builder can see what framing material is available, order it from the construction site, and have the lumber dealer deliver it, the efficiency of the project is greatly increased. Going forward, this type of value-added efficiency is a service that a lumber dealer must have to remain competitive.
As important as the online shopping and delivery experience is, the physical store will remain a vital part of the home improvement experience. Many customers of independent retailers appreciate the expertise that they receive from in-person shopping, so these businesses will need to increase their investment in associate training because the product market has changed due to the pandemic. For example, in the spring of 2020 when there was a nationwide toilet paper shortage, the demand for bidet attachments saw a sharp increase. Since these were not popular pre-pandemic, many salespeople had to learn on the job about the intricacies of this product. Going forward, ongoing education about the changes in demand and the new products that have been produced to meet that demand will be key for independent home improvement retailers to retain and grow their businesses.
Finally, while cash flow management and business continuity planning have always been important to running a good business, as we emerge from the worst of the pandemic, we are seeing a renewed interest from our clients in developing more detailed cash flow analysis tools and expanding their business continuity plan to include trigger events such as a business interruption due to a health crisis. We believe that small businesses must keep a closer eye on their cash flow management and supply chain because of the pandemic, which we think will make the operations of these businesses stronger in the future.
If you are interested in a more in-depth discussion about how your business can maximize its value post-pandemic, please feel free to download our Business Planning Kit or contact us for a complimentary consultation.