It’s time to fight the long battle.

Editor’s note: This article is from WeChat public account “Chaotic University” (ID: hundun-university) , author : Liping Chen, Professor of Capital University of Economics and Trade; released with authorization.

The epidemic has hit various industries, with retail and service industries bearing the brunt. How can the retail industry in distress rescue itself under such heavy losses?

In the face of disaster, retail is the most sensitive

The retail industry is the most sensitive to natural disasters. After natural disasters and man-made disasters, it is very common to buy food and daily necessities to protect yourself. Therefore, the retail industry usually faces huge social pressure in the face of major disasters.

There are two aspects to this pressure. First, the internal pressure mainly comes from the following aspects: the supply chain is interrupted, costs have risen sharply, cash flow has dried up, and the number of people on the job has been insufficient.

External pressure comes from social supervision. Retail and catering are considered the most opaque of all industries. After the disaster, it faced severe market supervision, customer criticism, and public opinion. Once an error occurs, it often causes fatal harm to the company.

I would like to summarize the plight of the retail and service industries in this epidemic.

Catering industry

Let ’s talk about the catering industry first. There is a report on the Internet from the Evergrande Institute on the impact of the epidemic on the industry. Based on the sales of catering and retail during the Spring Festival in 2019, the report calculated that the food industry lost more than 500 billion yuan in 7 days during the Spring Festival RMB. The China Catering Association also has statistics, and this year’s dinner cancellations reached 94%. It caused huge losses to the catering industry that bought a lot of ingredients before the festival.

If the current situation continues, most catering companies will not be able to hold on for two or three months.

Shopping mall

Department stores, shopping malls, and hypermarkets have recently closed. The department stores and shopping malls in our country use a joint-venture business model, which mainly relies on investment promotion. As soon as the store closed, the merchants in it, including clothing, jewelry, as well as service industries such as catering, cinemas, and entertainment, basically lost their business.

Community small and micro retail, service industry

The epidemic has had the biggest impact on micro retail and service industries. In addition to large shopping malls, small shops in front of the house are also closed. Barber shops, repair shops, photocopy shops, breakfast shops, massage massage shops, and community life services are basically in a standstill, which involves the livelihood of many people.

Peking University and Tsinghua University conduct a joint survey of 995 SMEs. According to surveys, 30% of SMEs believe that their operating income will fall by more than 50% this year.85% of companies claim that they can’t last for three months.

Our country’s main employment market is small and medium-sized enterprises. Although the number of individual industrial and commercial households is small, there are many. If the labor-intensive enterprises such as the business service industry fall into depression, it will bring about a wave of unemployment in the whole society and will have a great impact on social stability.

I think the biggest problem after the epidemic is the employment problem of the whole society.

Can’t persist for three months? This is a critical moment in the long-term battle

I talked about the predicament faced by the retail industry, but now the first question is how to survive?

Many retailers now say “I can’t hold on for three months.” At present, in various predictions, optimistic predictions believe that the national epidemic situation can be truly controlled by no later than about May. And pessimistic predictions suggest that if the epidemic spreads to regional countries, the time of out of control will be greatly extended. Therefore, I don’t think the epidemic will end in the short term. It is necessary to warn friends in the retail industry to prepare psychologically, the commodity supply chain, and the capital for a protracted war. This is a critical moment to measure the vitality of the enterprise.

I have a few suggestions for your reference.

1. Strong confidence in self-development.

In an uncertain environment, you cannot control the external environment, you can only manage yourself.

Governments at various levels have recently introduced a number of preferential and exemption policies to help small and medium-sized enterprises overcome difficulties. But you can’t expect to pass the policy by relying only on policies. Enterprises must first base themselves on self-development.

2. Epidemic prevention and control is a top priority.

Apart from hospitals, retail is also a high-risk place. Tianjin Baodi Department Store was sealed, and the salesperson and customer were infected with each other. Nearly 1,000 people were isolated. Epidemic prevention is the first task that the retail industry cannot make mistakes. Once it is closed, it will suffer great losses.

3. Prepare for long-term hard work and formulate an emergency risk prevention plan for 3 to 6 months.

The retail industry in our country is basically risk-free. However, the world is not peaceful now. In addition to natural disasters, there are also terrorist attacks, wars, and social unrest. In an uncertain environment, companies must make good plans for risk management.

● How to prepare a risk management plan?

You can refer to the risk management system of Japanese companies, which have done a good job in risk management in the retail industry.

In 2011, the Japanese government learned the lessons of the Tohoku earthquake and revised its disaster response laws. 7 national large-scale chain companies including AEON, 711, and the whole family were included in the list of designated national public institutions for disasters. In the event of a disaster, companies follow the green channel and can quickly deliver the daily necessities needed in the disaster area to the designated place.

● How does the company establish a contingency plan for 3 to 6 months?

Highlight the following points:

1. Pay attention to price management.

A few days ago, you saw that high-priced dishes and high-priced masks have been blamed by the society. The reputation of making trouble in the country is not what the company can bear. Therefore, price management must be done well before the disaster.

2. Guarantee product quality.

If you can’t guarantee the quality, the products with high quality and low price will cause significant reputational damage to the company.

3. Ensure supply chain management.

Stable supply is an important guarantee for the retail industry to survive the crisis. Enterprises and manufacturers must establish alliances and work together for a long time to overcome difficulties together.

4. Caring for employees.

In the epidemic, not only medical staff are devotees, but millions of salespeople are also working at risk. Medical personnel have government policy subsidies, and subsidies for sales personnel must be formulated by enterprises. Supermarket tallyers, cashiers, and couriers are all workers at the bottom, and it is not easy to support their families. Enterprises must provide employees with practical help to ensure the health of employees, financial compensation and incentives in place. You care about your employees so they can work with you.

5. Sincerely serve customers.

Employees and customers are the pillars that support the sustainable development of an enterprise.

Community business in our country is flawed, with only emphasis on commerce and no focus on the community. When disaster strikes, responsible companies must integrate into the community and provide better services to residents. Enterprises can start from these aspects:

(1) Sharing information with residents, especially information on food safety.

(2) Together with the residents, contribute to society. For example, in Japanese convenience stores, donation boxes were collected during the earthquake to provide consumers with disaster prevention information.

(3) Provide assistance to the elderly. China’s population over the age of 60 exceeds 17% of the total population. According to statistics, there are about 300,000 empty-nest elderly people and solitary elderly people in Beijing who have difficulty buying fresh food. After the disaster, young people can go out and buy food. What do the elderly do? Only the neighbours will help them to get back some dishes. Communities can serve as a bridge between older people and business.

In the event of a disaster, the services and contributions made by the company to the community, residents, and the weak will be best compensated after the disaster.

6. Strengthen collaboration with government, media, and suppliers.

I have contacted many bosses. They just do stuff and do not have the consciousness of establishing close contact with the government and community residents. This epidemic situation has given our company an opportunity for deep reflection on disaster prevention and sustainable development.

After the epidemic, 5 major changes are worth your attention

The epidemic cannot change the basic structure of the retail industry, but it can accelerate the pace of innovation and development in the retail industry.

After the epidemic, the development of the retail industry will definitely undergo great changes, and there are several aspects worthy of attention.

1. Community businessdevelopment of.