How to Adapt to Covid-19 Through Digital Transformation
For the past month or so, the world has been flooded with news of the Covid-19 pandemic. In Malaysia, the Covid-19 pandemic has become a very real and serious issue. How serious is it you may ask? With almost 3000 positive cases and rising, it is starting to concern a lot of people nationwide.
On the 16th of March, our Prime Minister Muhyiddin Yassin made a live televised speech announcing the Movement Control Order (MCO). Non-essential businesses and services are to be closed down throughout the entire period as a way to reduce transmission.
While expected, this announcement still came as a surprise for many Malaysians. Many are still unprepared to face the grim reality of this pandemic.
People have always been talking about having a Plan B but how many of us do? Is your Plan B good enough? With the MCO currently being extended for another 14 days, can your contingency plan continue to sustain your business? What happens if the MCO is being extended yet again?!
Survival is not for the fittest, but for those that can adapt. This is why we are here to talk about digital transformation for your business.
1. How Covid-19 has impacted businesses
Before we start, if you are a part of the essential services group then you are in luck. Chances are business will be booming for you. That should be a good thing right?
Most businesses operate based on a supply chain beginning from manufacturers all the way to customers. What happens when one of the components are missing? The entire chain of operation breaks down. As demand spikes during the MCO, supplies will get scarce and the cost of raw materials tend to increase too.
Operating your business can become more expensive. And remember, you’re the lucky ones.
For some businesses especially those in the B2B industry, major transactions and businesses often depend on annual tradeshows and exhibition circuits. As the industry itself is not a digital native, networking and building client relationships will be much harder. People are actively discouraged from gathering and face-to-face meetings are almost out of the question.
So, going digital is the clear winner here.
1.1 Cash flow
When business is on the table, cash flow is important. Having money on-hand is important so that you can continue paying your employees. Even when the RM250 billion economic stimulus package was announced, many remain skeptical. When the people’s movements are restricted, there are fewer people on the streets.
Fewer people going out means less money being spent too. According to the SME Association of Malaysia, “only 37.8% of businesses have enough cash flow to sustain themselves until April 2020.” They also added that the financial impact is likely to last for up to 6 months.
This spells trouble for many business owners as salaries, rent and other statutory payments still have to be made. While mega-corporations may have the cash reserves to sustain, not every company can afford to do so.
For conversions, the trend should remain similar. Those in the essential sectors will find that conversions have spiked significantly. For news and media sites, there’s a high conversion increase as people are trying to know more about what’s happening around them. The same goes for e-commerce stores where customers are more likely to buy things online.
The sectors that got hit the hardest due to the Covid-19 pandemic has to be food and hospitality. Eateries that did not sign up for food delivery services are going to suffer the most with takeaways being their only reliable source of income. As people are not going around anymore, travel agencies and other travel-related business are going to be seriously affected as conversions fall to almost zero during the MCO.
Besides, real estate conversions have been affected as demand is low. When businesses cannot afford to pay salaries, they will postpone any major renovation or relocation plans. This means commercial properties are going to take the brunt of the impact.
For website traffic, generally, you can expect an overall decrease during this period. However, media websites and social media traffic are more likely to increase. As people stay in most of the time, they spend more time on the internet. However, this does not mean that conversions will increase as people get more budget-conscious about their money.
For e-commerce websites, it is usually a mixed bag. Stores that sell essential items and groceries will have a very nice bump in traffic. Non-essentials like luxury products are more likely to have decreased traffic and sales.
1.4 Long-term impacts
All Malaysians have thought that the MCO was going to be lifted on the 1st of April. As the MCO is critical to keeping the pandemic in check, necessary extensions have to be made according to the situation.
Undoubtedly, an extended MCO is only going to cause further problems for most businesses. Even when it is (hopefully) lifted on the 14th of April, many businesses are left in financial shambles. Having had to pay salaries, rent and bank loans would have drained cash reserves.
When businesses resume as usual, profit margins are unlikely to be high enough to cover expenses during the MCO. In fact, the majority of business owners agree that it will take up to nine months for their finances to stabilize.
So what are the measures that can be taken to accelerate this process?
How digital transformation helps
As mentioned above, this pandemic has been affecting businesses both big and small. With the MCO, face-to-face transactions are significantly reduced. While most economic experts talk about a bleak 2020 for business finance, we believe that this presents yet another opportunity.
During the MCO, it had also brought several revelations despite all the negative effects. For one, people are starting to realize that they can actually buy a lot of products and services online. Digital marketing has become even more important than ever as more people discover the various items and services that are available online.
For business owners, having to rely only on a physical store is showing its ugly end now. With the MCO, businesses are rendered to a complete halt. Without a website, these businesses simply do not have the means to reach out to consumers on the internet.
Going digital prepares your business in case of the unexpected. You give your business a safety net to fall back into even during pandemics and MCOs.
2.1 People still need products
As society grinds to a halt, people still need to continue living their lives. Just because we are unable to go out shopping does not mean that we cannot do it online. Having stocked-out warehouse does not mean anything if people are unable to purchase your products. Engaging in digital marketing services allows you to reach out to these potential customers.
Before the MCO was even announced, rumours have already been circulating. People tend to hop on the bandwagon and thus many started panic buying and hoarding. During these times, supplies are scarce and this leads to more searches.
When people are going crazy about the lack of eggs and bread on the market, online stores that sell these essential items are in luck. Having the right products needs to be complemented by digital strategies to reach out to your customers. Without it, you might as well be sitting on a mountain of gold with nowhere to use it.
Other than that, online shopping behaviour has been on the rise and it does not show any signs of slowing down. During the MCO, Malaysians are depending on online shopping more than ever. So it is only wise that you pick up your digital efforts to take advantage of the situation.
2.2 Reduced competition (for now)
As we all know, non-essential businesses are ordered to close down during the MCO. What this creates is a rather unique ecosystem for businesses. While customers might not be able to reach you anymore, the same applies to other business owners. In this situation, competition among businesses will be much lower especially if you have the upper hand in digital marketing.
As some people struggle to keep businesses running, those that are already operating digitally will face the least impact during the MCO. As of now, digital adoption for most SMEs is still low as business owners are likely non-digital natives. The economic stimulus package effectively injects a one-off cash payment for Malaysians. Leverage on this for your business and let the people purchase your products online.
For now, the limiting factor for your business is not competition, but rather the ability to reach out to customers digitally.
2.3 Long-term planning
Experts have chipped in saying that economic impacts of the Covid-19 pandemic should start to taper off by the second half of 2020. While it sounds positive, the best case scenario still takes up to 4-6 months for things to normalize.
Rather than keeping yourselves rooted, long-term financial planning is important. Accept the fact that Q1 and Q2 are probably going to report losses and focus on the future instead. Digital marketing strategies like Search Engine Optimization (SEO) are poised for long term effects. It takes time for SEO to show effective results and this is exactly the perfect time for you to start yours now.
Rather than acting as just an emergency fill-in, digital marketing continues to drive value in the long-term for your business. When business is back to normal, those who have engaged with SEO or any other digital marketing strategies are more likely to recover faster.
The Best Time for Digital Transformation is now
Image Source: https://neilpatel.com/blog/coronavirus/
As we can see from the graph, most industries have been severely affected by the Covid-19 pandemic. Businesses in travel, advertising, construction, manufacturing and transportation have been hit the hardest.
Things might seem like they are on an unending downward spiral. The MCO might even be further extended if things do not improve. In times like these, each decision and investment that you make becomes even more important.
Imagine being 6 months down the road, do you still want your business to remain as it is? Or do you envision yourself doing something different?
Having a digital marketing plan is more than just about doing better than others. What the Covid-19 pandemic showed us is that digital marketing can be a contingency plan for businesses. Stay tuned as we will share about how SEO is able to help your business at crucial times like this.
If you too agree with us that going digital is the right move for your business, click here to talk with our digital marketing specialists.
Get started today, so that you are prepared for whatever happens tomorrow.
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