The world is changing every day, and since there is no playbook or proven strategy on how to navigate the new reality, we believe that sharing knowledge and experiences is key to help each other move forward and manage the unforeseen disruptions that were thrown our way.
We are starting the ‘Adapting to the New Reality Series’, where we will bring you perspectives from industry leaders across various organizations in the hopes of sharing their knowledge and experience and possibly shining some light on ways how to navigate the ‘new normal’. Today, I have with me Greg Wong, our Chief of Revenue. Greg is going to be answering a series of questions and hopefully sharing something interesting that we can all leverage in today’s new reality. (Transcript of the video interview below.)
What market trends are you seeing amongst our client base (both manufacturers and retailers)? Are there any trends or are we getting more of a mixed message about how they are impacted?
Yeah, it feels like we are seeing the tale of two cities. We have certain customers that for one reason or another are accelerating. Some of our customers are either in the medical industries or producing medical devices, ventilators, or are able to repurpose their factories or stores to help with what is going on in the world today; so they are accelerating.
We have some customers that are extending their commerce and digital footprints or optimizing their systems. We are also seeing people, especially on the retail side, that are expecting all of their revenue to come through eCommerce because all of the stores are closed. So, where we normally do holiday prep for Black Friday and Cyber Monday starting in late summer, we are actually starting to see that happen now because of flash sales and other campaigns where we see spikes in eCommerce traffic.
Then we have other customers where they may be in luxury goods, they are selling products that are really important in people’s lives when the economy is doing well but, in this economy, where people are retrenching they’re just not buying their products. As a result, we have a few customers that have laid off 80 to 90% of their staff and they’re just trying to survive. These types of customers are all about cash preservation whereas we have other customers that are actually accelerating and talking to us about how they can do more now.
A good example is a grocery chain in the New York area that we have. They were doing an SAP Hybris Commerce implementation and they had a certain plan and a certain schedule with a certain budget. Now their business has exploded because everyone is going shopping, everyone is going to their stores. They’re considered an essential service, so all of a sudden online ordering, pick up at the curb and all of these types of things are becoming so important and so critical to their business that they’re accelerating their roadmap.
In your career have you experienced anything similar to this level of uncertainty? I know we had SARS back in the early 2000s and the recession in North America in 2008. Have you seen anything similar?
Yeah, so I think there are some similarities but nothing has ever hit us at the speed that this has hit us. With the COVID-19 epidemic we went from 4 weeks ago where we could not hire people fast enough as it was such a tight labor market that we were having to pay premium salaries and our number one problem was a tug of war. We’re based in Toronto, where we have a lot of tech companies that were growing and doing really well and they were just hiring everybody, so it was really tough. Our revenue was constrained more by our ability to hire than it was by our ability to sell.
So fast forward less than a couple of weeks and all of a sudden companies are doing layoffs, businesses are freezing, and they are stopping spend. Retailers are shutting down or are being forced to shut down all their stores. The labor market is now available but sales are a problem. We have never seen, and personally I have never seen, something change that fast.
The good news for us is, as a company, our model has been to help our customers adapt relentlessly and that model has never been as important as it is today. I’ll be honest, although it’s our model, our motto and it’s what we do as a company, we’ve never had to adapt this relentlessly ourselves or help our customers adapt relentlessly this fast. So, what this epidemic is really forcing us to do is figure out how to help our customers not only survive but grow and find new ways of doing business in this economy.
It’s very different than SARS, its very different than the financial crisis in the past because we had more warning signs, we could see it coming, we could do things gradually and we just had no ability to do things gradually this time.
Having a rich background in data management, any recommendations on how organizations can leverage data to help with major disruptions like supply chain, inventory management, order fulfillment. Can data help in this type of situation?
Yes, absolutely data is critical. When you start looking at what’s going on you see supply chains being disrupted and inventory levels that are incorrect or not being understood, so things are not showing up on shelves. We’ve all gone to our local supermarket and seen there’s no toilet paper on shelves or there’s no cat food left. Whatever you’re trying to buy, there’s a limited amount, eggs for example. As soon as you have a really good data strategy and as soon as you focus on a really solid transparent information supply chain then you get visibility up and down. Who are your vendors, what are the products, and how fast can they turn products around?
This is where master data comes into play, looking at all your transactional data, your vendor data, your customer data, your product data, your location data. Start bringing all of this stuff together and really start to analyze how do I get product faster? How do I predict my demand much faster? How do I predict my suppliers and any disruptions along the supply chain? We can start ensuring that we can take care of any blips that we see in a supply chain, any risks. We can help mitigate those risks so that we can get the products we need faster because people are still buying.
When you look at what’s going on, people are not going into as many stores, but eCommerce is still happening. We have customers who just recently told us that three weeks ago their orders went down to about 10% of what they had planned and then the last week their eCommerce orders have gone up by 250% of their original plan. So, when you start looking at it from that perspective people are buying. We have to make sure that they can get the products they want and deliver them. Making sure that the whole supply chain is managed well and optimized becomes really important. What do you need to make that happen? We need data. Data to run analytics, run predictability on any supply chain, your vendors, your inventory, everything.
There are studies and supporting data demonstrating proof that companies that invest more in times of crisis actually benefit in the future. So, while almost the rest of the world is in self-preservation, cash preservation mode, it’s almost the opposite of what everyone else is doing. What are your thoughts on that?
Gartner released a document weeks ago that showed an analysis of multiple crises, I don’t know, over a 30, 40, 50 year span and it showed that companies that invest heavily, in either their technology, their supply chain, marketing and a number of different areas, in times of crisis they came out of the crisis and leapfrogged their competitors. So, while it’s absolutely natural that we want to preserve cash, we want to retrench in these times, if you have the ability to invest in the proper things, become more efficient and innovate in this time you’re likely to come out and do much better actually leapfrogging your competitors.
So, we’re challenging ourselves and going back to our customers and challenging them, saying let’s look at the really important things. What are the things that you really want to accomplish, how do we disrupt your business, how do we offer a better customer experience with that, so as the market turns back you get a larger market share? I think that’s the thing to focus on right now, not all investments are made equal. Just because you can doesn’t mean you should, but when there are really strong investments, when there are things that can actually make a difference coming out, retrench and do really focused investments. Those are the ones that will pay off.
Turns (crisis) can come in many forms and appear without notice (security breaches, unexpected competition, viral anti-brand social media, etc.), and the notion of the ‘infinite adaptability mindset’ is critical for organizations to adopt. It’s relevant to both technology architecture and team resource allocation. Do you think Pivotree can help in any of these areas to help companies prepare for these turns?
When we think about infinite adaptability you think about people and let’s start with people because the best ideas and the best way to adapt come from tapping the really smart people that we have in our organization. So, when we looked at this, we said the first thing we need to do as a company in this crisis is to take care of our team, take care of our people. If our team feels protected, our team feels safe, if they feel that we’re all in this together they can focus on helping our customers. So, the way we did this and the way we approached this infinite adaptability was to take care of our team and make sure they’re protected, make sure they understand they’re safe so that they could focus on helping our customers.
The next step was to talk to our customers and understand what they are going through, what are their challenges, what are the things that are impacting them. Just being a retailer or a distributor or a manufacturer doesn’t mean all retailers are the same. Some are expanding some are contracting. A supermarket, for example, is probably expanding their investments right now but if you’re a jewelry retailer you’re probably not, there’s not a lot of people going into Tiffany’s at this time, so there are different needs. By protecting our people, by having them understand what’s going on with our customers, we’re able to come up with ideas and solutions to help our customers adapt quickly.
We had a customer that was surveyed in a certain geographic region, they had distribution sites that they could deliver into a broader geographic region and so the easiest way to expand revenue and help them grow more revenue sharing in this period was to say how do we enable the commerce solution to be available in a more broad area so they can start delivering. So, it started with campaigns to that broader area, it started with looking at shipping and new shipping ways just to sell products with these new geographies that they may only be 50 miles further right? We’re really looking at finding the right people, making sure people are safe so they can focus on being very creative to come up with new ideas to help our customers.
Another thing that came up recently is that we have some customers that said business continuity is a critical thing and they don’t have business continuity plans. We heard from some of our customers, and some of our people, that they had relationships with other security and business continuity experts. So, we quickly built some relationships and partnerships and we started offering that service to certain customers to help them not actually grow revenue but protect their business. This was to make sure that they have almost an insurance plan if a certain location gets sick and to have the ability to support the rest of the business by other means. So, protect your people, your people will find the best most creative ways to help customers.
If you were to be born with a superpower, what would it be?
It would be great if I could tell the future especially in today’s day and age. I look at everything going on and I think being able to predict what’s going to happen over the next 30, 60, 90 days would probably help me quite a bit in how we manage our business. What we would communicate to our employees, what we would communicate to our customers and just help reduce a lot of anxiety for people that are worried about what’s going on. So, predicting the future right now feels like one that would be top of mind.
Our focus at Pivotree is to help clients build a foundation that can quickly respond and adapt, no matter where the business or economic climate takes us next. And this is exactly what we’ll continue doing during these unpredictable times. To discuss how our team can help your organization today, contact us here and one of our experts will be in touch.
Check out Pivotree’s ‘The State of Digital Transformation’ report.
Digital transformation is no longer just a buzzword. It’s a necessary disruption that nearly every business must embrace. Unfortunately, there is no one-size-fits-all playbook – so, where do you start?
We decided to go straight to the source. We surveyed our B2B and B2C customers to ask what their digital transformation plans look like for the next three to five years, as well as the challenges that stand in their way. The results paint a picture of significant opportunity, as well as potential gaps, that every company must address.
This White Paper Report combines our research findings with insights into what transformation truly entails – plus, guidance from our data and digital mavens to ensure your company is on the right course.
To download the report, click here.