Many retailers are hearing the call for change since the arrival of Covid-19. Such change may seem like trouble, but it has also revealed alternative paths that proved to be successful for many small business owners.
In this blog, we will discuss how some local retailers are combating this pandemic with sound strategies to resuscitate their business from the impact of COVID-19.
The Impact on Singapore Economy
The impact of Covid-19 pandemic has caused an unprecedented dent on the world economy. It even drove Singapore into a recession with the second-quarter gross domestic product (GDP) taking a 41.2 percent dive and retail sales suffering the biggest drop since 1986.
With an economy that has contracted 12.6 percent (on a year-on-year basis), small businesses are hit the hardest. Most retail outlets were forced to close temporarily during the Circuit Breaker (CB), slowing their business to a halt.
The threat of recurring waves of infection has also continued to keep customers away for an indefinite period until a cure is discovered. Furthermore, even as the economy begins to open gradually, strict precautionary measures continue to disrupt the usual flow of business.
Impact on Small Business Management: “We Can’t Rely Purely on Walk-In Customers”
According to the Department of Statistics, the retail sales and the food and beverage (F&B) sector have declined significantly compared with the same period last year. It is not difficult to imagine that small businesses are the ones bearing the brunt of the decline since many of them were not equipped to handle the sudden change in the retail scene.
Retail Sales Index and F&B Services Index as of June 2020*
| Key Indicators of Retail Trade | Year-on-Year |
| Total Retail Sales (Excluding Motor Vehicles) | – 27.8% |
| Total F&B Sales | – 43.5% |
| Change in Retail Sales by Industry | |
| Cosmetics, Toiletries & Medical Goods | -33.1% |
| Food & Alcohol | -45.7% |
| Restaurants | -59.0% |
| Cafes, Food Courts & Other Eating Places | -32.7% |
*Data extracted from Department of Statistics Singapore
Notably, restaurants have experienced the most decline (at -59%) compared to retail businesses such as cafes, cosmetics, food and alcohol.
Inadvertently, owners of small retail businesses in Singapore are facing the stress of the changing retail landscape. According to a survey conducted by CandyBar, the key challenges faced by local retailers can be broadly classified in three categories: modification of business strategies to meet the changing environment, managing cost to keep business afloat and ensuring their workforce stay employed and motivated.
Additionally, those in the F&B sector are also having difficulties meeting the minimum order quantity (MOQ) of raw ingredient supplies. As pointed out by Jasper Jek, the Chef-partner of Super Simple Group, his three food outlets are seeing fewer customers and orders are moving much slower than before. To meet the MOQ, he has to create more alternative products and delivery channels instead of relying purely on walk-in customers.
What Retailers Have to Deal Within this Economic Climate
- Decrease in sales due to declining patronage
- Manage cost to keep business afloat
- Precautionary measures that reduce dine-in and walk-in customers
- Lack of technical know-how to implement an online platform
- Employees’ mental well-being and morale
- Time crunch for implementing new strategies
Impact of COVID-19 on the Retail Industry in Singapore
As Trade and Industry Minister Chan Chun Sing puts it, “We are not returning to a pre-COVID-19 world … We must chart a new direction now.” Resilient business owners are doing just that.
When the pandemic arrived in Singapore, retailers were quick to move their business online and offer island-wide delivery to customers who are home-bound. Even for The Wine Company which operates primarily out of a dine-in location, branching out to offer takeout and delivery are the only means to generate revenue until the market can reopen. For many retailers who are new to setting up shops online, this opportunity not only provided additional cash flow to struggling businesses, it also presented a new and thriving business model.
Alfero Gelato, which relies mainly on business-to-business (B2B) orders, was pleasantly surprised by the outcome of going online with their business.
When asked about what measures were taken to improve their business during the pandemic, Marco Alfero, Founder of Alfero Gelato said:
“We take this new online adventure in a positive fashion since it is totally new to us. It is definitely helping our brand in terms of sales as well as brand awareness. Before this e-shop, we were mainly focusing on B2B supplying to hotels and restaurants, but with the positive results from our online venture, we believe it is a great value to our business and we will certainly continue to strive to do better online.”
Besides going online, some retailers took it up a notch by creating new product lines and menus to entice a more diverse market. Despite the rush to introduce new products to keep businesses afloat, many retailers made dedicated effort to ensure only the best quality products that are representative of their core values are presented to customers during launch. For some, even the packaging and online ordering experience were redesigned to ensure the quality of the packed food are not compromised during delivery.
With the news of retrenchment hitting the market, many retailers took deliberate effort to open their line of communications with their employees to provide reassurance and debunk any uncertainties that may rattle corporate morale. Such proactive practice not only cultivates employee confidence during this turbulent time but also increases employee loyalty through sincere empathy from the management
What Eight Singaporean Retailers Are Doing to Overcome the Impact of Covid-19
Many local retailers have adopted some best practices that are useful for combating the doom and gloom of the pandemic. Eight retailers that participated in CandyBar’s survey have these valuable lessons to share:
Super Simple: New Online Platform & Product Line
Super Simple is a salad bar that offers healthy protein bowls and fresh salads. It has three outlets in Singapore that serve walk-in customers but since the pandemic started, an online ordering platform was set up to facilitate online orders.
Jasper said:
“We have to find new ways of doing and getting business. It is also harder to order ingredients because goods are moving slower, making it harder to hit the MOQ. We also need time and manpower to understand, respond to and fulfil the new government regulations. It is just harder to be efficient.”
Also, the brutal decline of walk-in business has driven Super Simple to launch a new product line – JUST, a vacuum-packed meal component such as slow-cooked chicken breast, chilled salmon and frozen mashed potato, that customers can enjoy at home just by heating up for a few minutes. The free delivery option for orders from $50 also encourages customers to buy in bulk.
Ling Ling by The Wine Company: Reinvent Menu, New Takeout & Delivery Options
When asked about how the Covid-19 crisis has impacted their business, Belinda Lim, Founder of The Wine Company said:
“Sales has reduced drastically as Dempsey is a destination spot. We are determined to keep our team, so we are constantly exploring new ways to reach out to our regulars and new customers… Even as we do this, we stick to our philosophy of offering good value food and drinking experiences at affordable prices.”
To ensure continuity of the business, Ling Ling by The Wine Company went beyond its dine-in service to create a long list of takeout and online menus with delivery options to suit the changing needs of retail customers. Besides trying to keep prices affordable by delivering orders themselves, they also offer 30 percent off on food and wine orders to entice new customers. With economic bee hoon dish priced at $1, bento box at $10 and wine at as low as $29.90 per bottle, The Wine Company is determined to provide value-for-money options that keep customers coming back for more. Additionally, the team also attempted to keep their menu interesting with creative options such as alcoholic bubble tea and freshly made dim sums that strike a chord with Singaporeans.
LivinWall Pte Ltd (Gush): Establish Employee Relations & Welfare
LivinWall (Gush) is a company that supplies high-grade wall paints produced through special pulverization processes that minimize carbon emissions and decrease energy consumption over time. However, the arrival of Covid-19 pandemic has not just affected revenue but alerted the management to take special care of employees’ mental wellness amidst the startling change.
Lester, Co-Founder of LivinWall (Gush), said:
“We have started to increase the number of channels that our employees can use to speak to us directly so that we can break down communication barriers and provide reassurance in such a time of unsettling uncertainty.”
With the constant stream of recession news and retrenchment updates across different industries, employees are aware of their vulnerable employment status if the economy continues to decline. To ensure that the team remains motivated and free from undue stress, LivinWall (Gush) adopted a proactive approach to assure their employees’ mental and emotional wellness through honest and open communications.
Japan Rail Café: Build a Digital Community
Japan Rail Café was intended to be a one-stop platform for those who love Japan to gather for delicious Japanese food and exchange travel experience through events and workshops. Due to the Covid-19 pandemic, the company has suspended their regular on-site events and suffered a decline in sales since their regular customers who are mainly workforce around the Central Business District were temporarily restricted from patronising the outlet due to the work from home (WFH) policy implemented by the authorities.
The café was also not readily equipped to handle takeaway and delivery orders, however, the team managed to resolve the logistical and scheduling challenges swiftly and eventually get back on track to serve their customers with new and improved services. Furthermore, moving their events online has been a rewarding journey as well. Wyncy Tan, Assistant Manager Japan Rail said:
“While the postponement of the on-site launch of Japan Rail Cafe’s reopening was unfortunate, having a digital makeover was very timely. This will serve as a great platform to keep our community informed and connected. Therefore, in place of our regular events in the café, we have moved our events online using Facebook LIVE.”
Since June, Japan Rail Café has been hosting a series of webinars titled #stayathome, featuring the Shikoku Region which makes up for 4 prefectures: Kagawa, Kochi, Ehime, and Tokushima.
Alfero Gelato: Focus on Online Sales with Island-Wide Delivery
Alfero Gelato is a supplier of homemade Italian gelato produced with the best quality of imported ingredients. Traditionally, the business relies heavily on B2B orders but with travel bans and shutdowns of most businesses during the CB, Alfero Gelato’s sales witnessed a decline of nearly 80 percent. Unfortunately, the business needed to let go of two staff members and placed another on no-pay leave in order to remain sustainable.
To revive the business, the team decided to redirect its activities online to capture a brand-new market and this strategy proved to be a winning formula for Alfero Gelato during this difficult time. “After the announcement of major lockdown, we decided to focus our business on online sales with island-wide delivery and we are very thankful that we managed to rush out our e-shop on time,” Marco said:
“It is helping us to cover costs and keeping us ready when the market reopens.”
Nature’s Glory: Business Continuity with Online Presence
Nature’s Glory has been a supplier of organic foods and health supplements since 1991. Even though it is a reputable grocer with several international certifications, the business was not spared from the Covid-19 crisis. The sudden announcement of the CB halted all business at outlets and showroom, inevitably causing a sharp decline in sales. With extremely high overheads and a need for an alternative channel to generate sales, Nature’s Glory turned online.
Fortunately, the timely launch of their online shop just two weeks before the CB became the essential platform that kept their business on track. “We were able to gain the internet business while sacrificing much on the counter sales where most clients were locked in and unable to come.” said
Peter Lim, Founder and Managing Director of Nature’s Glory:
“We were able to draw increasing followings as otherwise, this Covid-19 crisis is really a nightmare to our sales and financial position.”
SkinLab The Medical Spa & SL Aesthetic Clinic: Adhere to Safety & Hygiene Guidelines
Skinlab is an aesthetic spa and clinic that provides non-invasive and non-surgical procedures with the most advanced techniques and cosmetic dermatology. With seven outlets in Singapore, the impact of Covid-19 has hit this business more than others because, as Dr Kelvin Chua, Founder & Medical Director, rightfully puts it, “we are a service industry that cannot be done remotely.”
Unlike other retail businesses that can turn to e-commerce for business continuity during the CB period, Skinlab has no alternative to generate sales to cover rent or salary. As government aid will be reduced eventually, the management foresees pay cuts as a strategy to tie them over this period. However, the team remains committed to adhering to precautionary measures set out by governing authorities. Dr Chua commented:
“When it comes to taking measures in areas of safety and hygiene, we will be following Ministry of Manpower (MOM) and Ministry of Health (MOH) guidelines in using masks, personal protective equipment (PPE) and gloves. For our spa business, we intend to use masks, face shields, PPE and gloves which are even stricter than the government guidelines. That is how committed we are in our business and customers’ safety and health.”
The Refinery / FOODHOOD: Embrace Change with New Strategies & Processes
The Refinery is a trendy Yakitori joint and bespoke cocktail bar that also doubles up as a creative space for those who have a flair for designing. When interviewed about how the Covid-19 pandemic has impacted the business, The Refinery Founder, Colin Chen replied:
“We have to relook into a lot of processes which needed to be redesigned. From the experience of ordering online to how the food is packed, packaged, and delivered, to re-looking into the menu and seeing which dishes can withstand transit times, etc. It is like you have to relearn how to start a new business in a couple of weeks.”
Like many other F&B businesses, The Refinery also decided to set up their online platform, FOODHOOD, to receive orders. Acknowledging the need for all businesses to digitalise and operate remotely in any location, Colin was quick to embrace change and swiftly led the team to harness the power of technology and deploy cloud-based software and digital payment applications to improve their business processes. They also engage a pool of freelance delivery personnel to fulfil their island-wide deliveries.
What Retailers Did to Improve Their Business
- Implement online-ordering platforms and engage delivery teams
- Tap into a new market with different strategies
- Diversify existing product line to appeal to consumer needs
- Introduce new products and services to suit different target markets
- Foster employee morale and motivation through open communication
A New Dawn for Small Retail Business
Even though the economic environment is looming with uncertainties, one thing is certain for small retail businesses: change is the new normal.
Whether this means investing in new technologies, embracing a new way of doing business or reinventing the products and services, retailers must remain flexible and resilient to survive the ever-changing environment and consumer behaviour.
Truth be told that there will always be risks in doing business, but in this current climate, opportunities abound for retailers as the industry landscape transforms too.