It’s no secret, the pandemic has drastically shifted product purchasing patterns. Due to changes in demand, many companies are rerouting the direction of their business models. As customers' priorities shift, some businesses have struggled to adjust, while others have risen to the occasion.
Fundamental Changes
As an alternative to shutting down, some businesses are inventing opportunities within their organizations to better access customers and cater to their changing needs. Examples include:
- Extended or decreased operating hours
- Adjusted pricing and new payment methods
- Limited or expanded product availability
- New delivery channels, services, products, and even customer bases
Pivoting for Profitability
According to a GetApp survey, 31% of businesses are pivoting with new products. One example of innovation used to sustain post-crisis event revenues is the Event in a Box, recently launched by St. Louis-based marketing firm Notion. The product is a strategic solution providing an alternative to existing conferences or events in which a turnkey kit is shipped directly to event registrants.
“Before the crisis, a third of our revenue came from work related to on-site events,” said Louis Kokenis, Partner and Executive Creative Director at Notion. “When the pandemic hit, those events came to a screeching halt."
Not all business model adjustments result in profits. According to Harvard Business Review, “a pivot must align the firm with one or more of the long-term trends created or intensified by the pandemic, including remote work, shorter supply chains, social distancing, consumer introspection, and enhanced use of technology.”
To increase the likelihood that a pivot will lead to profitability, the strategy should align with the organization’s mission. An adjustment should be structured around the company's existing capabilities to ensure the outcome is sustainable and continues to enhance the brand.
Making the best use of your finances should be a key element in assessing new business/product opportunities in uncertain times. Everyone is in the same boat and looking to replace lost opportunities.
With limited resources, you may need to pass up promising opportunities if pursuing them would mean using essential funding. Alternatively, if you have the resources, competing may be less expensive during a downturn. Every element of working capital should be considered.
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To learn more about Product Innovation and how other businesses are adjusting to the new normal, download our Think Tank: Conducting Business in Uncertain Times.
