The COVID-19 outbreak has forced retailers to close their stores until the situation improves. This has resulted in revenue loss for so many retailers. Like it or not, retailers must adapt to the “new normal” in order to survive. The first step is, of course, to switch to online.
Despite facing many challenges, there are several ways that retailers can implement to compensate for lost in-store revenue. Below is the list of short-term revenue strategies to adopt during COVID-19.
1. Incentivize Customers
Providing incentives in the form of digital gift cards can help convince customers to make repeat purchases. This is one of the quickest ways to keep your revenue flowing when your margins are thin.
You can incentivize your customers by giving them discounts based on their spending. You can also give them free merchandise. You can use your own complimentary items as souvenirs or get ones from your co-marketing partners.
In order for this incentive program to run effectively, you must adjust it to your customer preferences. Use HashMicro’s Retail POS Software to make it easier for you to create personalized incentives.
2. Allow Pre-Orders
To secure your cash flow, it never hurts to set up pre-orders for your products. This will be helpful during the current situation, where getting items from suppliers is even more challenging. Since customers will be required to pay up front, you’ll need to provide a clear return and exchange policy. That way, customers will feel more certain to pre-order.
3. Get Rid of Low-Selling Items
Most retailers are experiencing a decline in demand. Therefore, it is critical to control your inventory. The main goal is to gain revenue from your on-hand inventory, not to end up with dead stock.
The first step that needs to be done is to use your stock management app to perform ABC analysis. This is necessary to help you prioritize products by how much value they contribute to your business. A-grade items are the most valuable, B-grade items are of medium value, and C-grade items are the low-value ones yet collectively account for the hundreds of small transactions.
Next, you have to make sure that C-grade items are also sold. You can do this by heavily discounting them or bundling them with A-grade items. This will help improve your cash flow and gain enough revenue to provide more most-wanted products in the future.
NOTE: HashMicro’s Stock Management App makes it easier for you to perform stock valuations and stock ageing analysis to avoid excess inventory.
4. Pause Standing Orders with Suppliers
To avoid dealing with slow-moving inventory, it’s best to rethink your standing orders with suppliers. If you used to make multiple orders a month, you can now minimize the frequency. This will not only help you save on inventory costs, but also shipping costs.
Before placing an order, you must first confirm if the product you’re going to order meets the demand. Stop ordering low-demand items. The best way to ensure the right order and good timing is by tracking your stock levels in real time. When a product approaches its minimum stock level, then it’s time to place an order. But then, what if your stock runs out quickly?
Creating blanket orders is the right way to reduce the frequency of orders and ensure long-term stock availability. You can make an agreement with your supplier regarding the price based on the quantity of stock and the delivery time you desire.
NOTE: Blanket orders are basically created to obtain products that get sold out quickly, in large quantities. Thus, make sure that you analyze your inventory first before making orders.
5. Reduce Packaging Costs
Packaging costs can eat away at your margins without you knowing. Beautiful packaging can indeed impress customers, but if it’s expensive, why should you keep it? There are many other ways to please customers, without having to sacrifice your revenue (will be discussed in another article).
Reduce the expensive materials that you used to use to pack your products. This can also help you work on more environmentally-friendly products. If you’re worried that your customers will get confused by the new look, then you can make an announcement about it on your social media.
6. Optimize Your Retargeting Ads
There is no better way to boost revenue in a short period of time than optimizing your digital marketing. It’s the perfect time to focus on retargeting your existing customers, because they already know or even love your brand. Remember that selling your product to someone who is familiar with your brand is much easier than selling it to someone who has never heard of your brand before.
You can upload your customer list to Facebook Ads Manager and post your ads on the platform as well as Instagram. Don’t forget to highlight interesting elements such as discounts, gift cards, thrifty packages, and etc.
7. Boost Revenue Through Social Media
Posting ads on Instagram regularly can effectively help you gain revenue. As the number of users on the platform has increased since COVID-19, it gives you a greater chance to capture new customers. Make sure to include product links so viewers can make a purchase directly from their app.
You can also increase brand awareness by creating social experiences through social media. Nowadays people who have been isolated look to social media for content and connection. Therefore, this is a good opportunity to let them know of your social media presence.
Depending on your product, you can start a certain trend by including a unique hashtag. Recently, a few trends that have been created are workout, quarantine pillow, and pass the brush (makeup) challenges. So why not create something different?
As a leading ERP consultant, HashMicro is more than happy to provide your business with the right software solution during the COVID-19 pandemic.