10 min read
The opinions of the employees of You are personal.
Many, if not all of us have seen the terrifying predictions of dozens of companies that will close their doors forever because of COVID-19. When I went through the list, it read like a who’s who of really badly run companies. From chain restaurants that you wouldn’t win a gamble to, to once powerful retailers that represent a shadow of their former glory. The article’s assumption was that COVID-19 was killing these companies. I do not agree. While the COVID-19 crisis may have delivered the coup de grace and accelerated the demise of these facilities, these companies coughed up blood for years, sometimes decades, before the virus accelerated their agony.
As a lazy man who really hates going to physical stores, I was an early fan of online shopping. I still remember the pathetic website for a monster catalog company. I went to their website with enthusiasm and started buying, it was simple: see something you like, you put it in your shopping cart. Well, up to that point it was easy; When I went to check out they told me they would contact me in 3-5 business days with shipping costs. As? I was incredulous. Isn’t it logical to believe that your website also has a shipping price when your print catalog has a shipping price? It turns out no no it isn’t.
Image: Mark König via Unsplash
I waited to find out how much shipping would cost and finally got an email (well beyond the 3-5 business day envelope) to find out that my $ 100 shelf would cost me an additional 350 shipping! I called headquarters in the United States. And all the levels I could reach told me that was exactly what it was going to be. I immediately canceled the purchase.
That was 15 years ago and I’m still shaking my head. As a service to you, dear readers, I have come back to this website and not much has changed.
This business currently has thriving brick and mortar stores around the world, but it is doomed to fail. Road delivery services are only an emergency solution. The goal of online shopping is so that I don’t have to leave home. Amazon taught us that we can get almost anything we want in just a few days. I actually ordered a better umbrella on Amazon, got free shipping, and it was cheaper.
That’s not to say that Amazon performed perfectly during the Covid-19 crisis – I command a lot from Amazon and the delays and bottlenecks have been frustrating, but they are forgivable as COVID has surprised most companies. and supply chains have not been able to produce products quickly. And more and more people turned to Amazon for their famous home delivery service. This is not a commercial for Amazon, Walmart, and Costco. While they are not widely known for their pre-pandemic delivery services, what they did excel at was providing their customers with what they need quickly and efficiently.
But other companies are not doing so well. Tried to get a delivery from a luxury grocery store only to find out that even though I was only 12 miles from the closest store, they weren’t delivering in my zip code. What’s more when I called customer service to ask why they said they could do it in the future, but they have no immediate plans to do so. I was an avid consumer willing to pay for shipping and a delivery fee only to have a listless agent who didn’t offer customer service to shrug my shoulders and hang up the phone. I hear one more person shrug their shoulders (yes, I can hear that on the phone). I am not responsible for my actions.
Image: Morning brew over Unsplash
Okay, at this point some of you might think that Covid-19 changed all the rules, but I would say that the rules changed a long time ago but people’s buying habits hadn’t changed until COVID. Let’s take a look at Amazon, once a humble online bookseller. Books; That’s it They started their business when book sales were declining and their competition tried tricks like in-store coffeeshops (which predictably became a place where people could take a book off the shelf and have coffee all day) to a former manager, who told me that he saw the same people every day who had the same book and had coffee all day and when they finished one book they just started another. I don’t think I have to tell you what happens to most is the stationary bookstores.
But Amazon was more ambitious, they decided to do the unthinkable and take on the monsters of retail. That an online bookseller even considered going up against Montgomery Wards, Sears, and JCPenney (who practically invented the mail order catalog – relax, I don’t know) was ridiculous in 1994.
In October 2014 I wrote Adapt or Die: Some Chilling Lessons from the Ice Cream Industry for s, a warning against companies that cannot adapt, mitigate their risks, and anticipate disruptive market forces. These retailers have lost sight of their market differentiators, and it is for this very reason that customers are more likely to shop in their stores than elsewhere. Let me be clear: I’m not saying that there weren’t any other market factors that brought these stores to their knees, but I do want to point out that you can buy a Craftsman (a brand almost synonymous with Sears) on Amazon and is eligible for free delivery with Prime membership.
Image: Benedikt Geyer on Unsplash
But the bell is ringing even for Amazon. On May 11, 2019, the world’s first billionaire CEO of Amazon, Jeff Bezos, stunned Amazon shareholders when he announced that his company would go bankrupt. “I assume that one day Amazon will fail,” he said. Bezos later stated that he believes “Amazon will be disrupted one day” and will eventually “go bankrupt”. Now there is no way to know if Mr Bezos read my October 2014 article mentioned above, but he’s a smart guy so I’m sure he did (until at this point I flatly deny reading him I will probably still believe he will follow my advice.
Some reading this may sympathize with small businesses that don’t have the money to weather this storm, to which I would reply, “Why not?” Even a tenth grader in an Introduction to ship knows that most small businesses fail, and most that fail fail because of lack of capital. If you’re a small business owner with no war chest, what’s Covid’s fault? Market disruptors are predictable and foreseeable, although the nature and timing of such disruptions may not be known.
It’s not just small business owners who are suffering. My wife recently ordered a pizza from a national pizza chain. The store was only a mile from our house. An hour after ordering, he called the restaurant and the manager told him his pizza was “in a car right now”. When my wife protested that she was dissatisfied with waiting more than an hour, the manager replied coldly, “You should consider yourself lucky, most people wait more than two hours.” We ate the pizza which was undercooked in the middle (as best we could) and it made us both sick. She complained to corporate headquarters the next day and received a 10 percent discount coupon.
Nik Owens, Unsplash
And since we are concerned with pizza, why is “contactless” delivery an incentive? What is the name of all the sacred things they did to my pizza before? Are your employees washing their hands now? What follows a commercial where they boast that their food now contains 20 percent less rat droppings? If this is the solution to a bankrupt business, we are all in trouble.
Covid-19 is indeed a health crisis that will negatively affect businesses large and small, but it is also an opportunity. Companies that provide really great customer service and produce food (or your business equivalent) that is fresh and tasty in the conditions of the pandemic will emerge empowered with a real business advantage.
Not all companies performed poorly prior to this crisis, but for those who have been, the writing is on the wall.