Diversifying business in 2021 – for some it’s been a matter of choice, for other it’s been a matter of survival. The impact of last year was unprecedented, but as we push through the new year there’s a feeling of optimism for the businesses who are taking control of their future.
We’re discussing the different degrees of diversification businesses have been undergoing, as well as advice on how to implement change in your own business.
Finding new markets
Whilst some markets have been relatively untouched by the impact of COVID-19, there’s many providers that have had no choice but to expand their offering.
A study conducted by the Harvard Business Review looked at the importance of adopting an offensive strategy in your business. This approach means investing heavily in research and development, ensuring your business is staying ahead of what’s to come.
If a business only focusses on minimising losses, it’s likely they’ll only achieve growth of around 4%. If a business adopts an offensive or progressive approach, that percentage increases to 13%.
Put simply, minimising your losses will only get you so far.
Across the world, businesses have been adapting their strategy to better suit the needs of what’s in demand. Textile manufacturers diversified from clothes to PPE. Exhibition stand builders turned to what can be built from people’s gardens, and restaurants went from indoor luxury dining to takeout’s in a box.
Whilst some of these changes will prove successful for lockdown, it’s just as important to establish what’s likely to last. For every business, speaking to customers should be at the top of their priority list. What knock-on effect will the habits of their customers mean for business? Will it mean a simple mix-up of products, or changing your offering entirely?
Expanding or diversifying inventory
For some businesses, temporarily diversifying product lines will be enough to keep business going, and whilst it’s a great idea to expand your inventory to include in-demand products – it’s not a permanent solution. Items such as masks, hand sanitizers and novelty working-from-home items are only going to provide short term success.
Just as we mentioned before, it’s about identifying the knock-on effect of what’s to come long term. For example, a recent study has revealed 72% of workers want a more hybrid approach to working remotely moving forward.
The result of what that might mean for retailers? More time and money being spent on home-offices and less being spent in a working environment. As well as this being an opportunity for home décor and technology providers, these new lifestyle changes are likely to impact dining experiences, clothing and commuting behaviour. As well as the changes brought around from our working lives, it’s important to consider society’s attitude towards health, relationships and leisure time.
For those thinking of expanding or diversifying product lines, we suggest doing it with an inventory management system. As well as being able to manage your sales across multiple channels, a good system will monitor the success of new items.
Going online from in-store
The last year has had a profound impact on shopping behaviour, bringing the digital transformation to the forefront of the retail industry. For in-store retailers, it can no longer be stalled.
‘Buy online’ related searches have almost doubled since the beginning of the pandemic. Even when restrictions stop altogether, physical retail stores will feel the lasting effects of COVID-19. Now is the time to bring your brick-and-mortar store into the online world. Likewise, if you have an existing ecommerce store to improve, now is the time to transform your omnichannel strategy.
For smaller businesses, transitioning to platforms such as Amazon, eBay and Etsy are a great place to start. For most, building a website through ecommerce store builders like Shopify and BigCommerce will be the best step for your multi-channel strategy.
Those transitioning from offline to online selling are doing so with the help of SaaS (Software as a Service) products. Whether that’s controlling inventory across different outlets or accessing your business whilst working from home, web-based products are transforming the possibilities for selling operations across the globe.
Changing your supply chain
Even for the businesses that don’t require change in product or service, the combination of Brexit and Covid-19 has meant a huge change for the future of ecommerce – most notably, supply chain.
Delivery times have already declined from the effects of COVID-19, but delivery times during the adjustment periods of Brexit are expected to increase rapidly.
So, whether you’re in retail or distribution, continuity of supply chain is key to a well-run operation.
No longer can businesses afford to receive stock “just in time”. Whilst this sourcing strategy has worked for some, longer lead times and slower production is set to have an impact on every industry trading and receiving goods from overseas.Having a diverse sourcing base might be more work initially, but after 2020 exposing the fragility of relying on manufacturers from giants like China, it’s important to have options. In the textile industry for example, diversifying sourcing can extend to places like India, Bangladesh, Indonesia, Mexico, Brazil and Peru.
Diverse working setup
For most businesses in the UK, the impact on staff has been the biggest disruption in everyday business operations.
No matter the size of organisation, working from home has been a reality for most businesses, and when a global crisis like this unfolds, what was once the norm can change in the short term as well as long term. The duration of the pandemic has also meant that people have invested significantly in their home setup. Likewise, the duration of these uncertain times has meant people have changed their lifestyle for good. Instead of hours of commuting to and from the office, individuals can regain lost time at home with friends and family.
Offering a more diverse way of working will be the reality for most business owners moving forward. As a result, workplaces are likely to become a far more social environment, designer to harness interaction and inspiration.
Change is inevitable over the next few years, so its important business owners make sure their business is ready. Diversifying your business successfully will mean assessing what the future of your industry is; that means talking to customers, talking to staff, and learning from others.