As a small business, we have been lucky to be at the forefront of several key shifts in the retail industry over the years, and that is due to our mindset of viewing change as an opportunity rather than a problem. The businesses doing well right now despite the coronavirus are the ones that see change in the same way.
One example is Sarah Timmerman, the founder of online dress shop Beginning Boutique. When confronted with the health crisis, rather than thinking, ‘This is a disaster, no one’s going to buy my clothes anymore,’ she quickly pivoted to selling face masks and other PPE. Businesses that don’t see change as an opportunity are reacting now, but it’s too late – she got in ahead of them.
It’s not always easy to view change as an opportunity. Often the opportunity is not as big as the one you had before, but that’s how you need to look at it to survive. Here are three examples of new opportunities we’re taking advantage of at The Party People, thanks to the coronavirus:
1. Category expansion
As a party business, we have been severely affected by social distancing restrictions. People don’t buy party supplies if they can’t hold parties. In the first week of lockdown, our sales were down 92 per cent, and we were forced to ask ourselves where the opportunities were.
The obvious answer was hand sanitiser, toilet paper, cleaning supplies and other items people were stockpiling. That wasn’t anywhere near our core business, and there was a risk that people would see us as trying to take advantage of the situation to make money, but we chose to see it as an opportunity to help the supply chain distribute products in high demand.
We were able to source hand sanitiser from an existing supplier, and so far, the gamble has paid off. Our existing customers are buying it, and we haven’t copped any flak for it.
There are a few reasons why I think it has worked out: we’re selling hand sanitiser below our usual margin, so we aren’t price gouging anyone, and we’ve positioned it in a new ‘coronavirus survival’ category alongside products like craft kits and games to entertain your kids at home. These products are much closer to our core business and they came directly from customer feedback.
The same week when sales dropped 92 per cent, in addition to asking where the opportunities were, I asked my team to talk to every single customer to find out what they were buying and why. It turned out many of them were looking for things to do at home with their kids, which led us to create the ‘coronavirus survival’ category.
Category extension is about understanding what your customers need from you as a business now versus a few months ago.
2. New consumer trends
While it makes sense for us to sell hand sanitiser now, we don’t plan to make it a permanent part of our offering. Part of seeing change as an opportunity is knowing when to pivot your business for a short period of time and when to adapt to a longer-term trend.
Before the coronavirus, we were focused on providing more environmentally friendly products in the party space and biodegradable products were doing really well. But now, we think people are going to be more interested in disposable products because they will be seen as a cleaner option.
The virus is going to cause permanent changes in consumer behaviour, and the conversations we’re having at the moment are all around trying to figure these out. We’ll dip our toe into a few different things and see what sticks.
With parties off the table, we quickly had to come up with new ways to help our customers celebrate, so we collaborated with I Love Showbags to sell their show bags on our site in the lead-up to Mother’s Day. The results were positive, and we’ll likely collaborate again in future.
Having done a few collaborations over the years, the advantages are clear: you can access products and customers you might not be able to otherwise, and you can tap into someone else’s expertise in areas outside your core strengths.
It’s important to choose the partners you collaborate with carefully, however. If both parties don’t see it as a win-win from the beginning, if one side is trying to get more out of it than the other, then it can fall apart.
If you haven’t collaborated with other businesses in the past, now is a good time to try it, since – like it or not – many of us have downtime, and we can spend it on our business.
Dean Salakas is CEO of The Party People.