COVID-19 & Small Business cashflow, Inventory Planning, Ecommerce Trends, and future supply chains – EP36

What you’ll learn:

On today’s episode, host Luke Peters commandeers the mic to lead us through actionable ways businesses can fix cash flow in these unprecedented times. Peters also gives his market predictions for Q2, Q3, and Q4 followed by some unexpected positivity that’s emerged in response to the virus. And stay tuned for more Coronavirus coverage. Every future episode will begin with COVID-19 discussions with our guests, who will share their thoughts, opinions, and guidance for businessowners who need help navigating all the obstacles that this emergency throws at them.

About our host:

Luke Peters started NewAir Appliances out of his garage with this wife 18 years ago. He continues to grow the company and strive towards the goal of becoming the most trusted brand in compact appliances. He recently founded Retail Band as a strategic consulting practice to help other brands grow their digital sales like he did with Newair. If you would like to grow your DTC, Amazon, Home Depot, Walmart, or Wayfair sales online, his new company helps in a strategic way by also working towards the growth of your brand enterprise value.

Key takeaways from this episode:

  • Why businesses should think and plan for themselves before receiving government direction—2:30
  • The current landscape: what small businesses are up against in this crisis—3:55
  • Will the PPP make a positive impact on small businesses and the market?—5:00
  • How fixing your Demand Plan with fix your cash flow—6:21
  • How to react and respond to COVID-19 when the future is unknown—7:34
  • The impact on Q2, Q3, and Q4—8:40
  • Google trends: online buying trends on big box retailers (Home Depot, etc.)—8:45
  • Positive news: how the crisis has unified the world and created inspiring public responses—9:55
  • How to think about your future supply chain—11:32

Podcast Transcription

Speaker 1: Welcome to the Page One podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big box retailers or what we call our commerce. Now here’s your host, Luke Peters.

Luke Peters: Thanks for joining us on the Page One podcast. I’m your host, Luke Peters, and this is a special COVID-19 podcast. So what I’m going to do is I have a solo cast here and I know in my latest episodes, or all my episodes, I’m usually interviewing a successful business leader and I’ll continue to do that. But I thought for the sake of interest maybe that I would put down some of my own thoughts. I’m going to run through… It’s April 6th right now and I know this COVID-19 is affecting all of us. There’s definitely been some big positive move that I’ll talk about, specifically in the last week, that has helped businesses. But at the same time, I just wanted to put my thoughts down and hopefully these are going to be helpful to you, the listeners. I’ll try to do this every week or every couple of weeks in between interviewing business leaders.

Luke Peters: And by the way, one thing I also wanted to talk about here on the Page One podcast is all of my new episodes with business leaders, we are going to start with a quick discussion around COVID-19 and how they’re navigating it. So I thought that’d be helpful, useful, something that you guys can put into practice. Hope you guys enjoy those episodes. Hope they’re helpful. I know our minds now is always around COVID-19. It’s affecting our business and of course our lives and we’re all locked at home.

Luke Peters: I’m going to run through a couple of things here. I’m going to talk about my COVID-19 thoughts. I’m going to set the business tone in this episode. I’m also going to say what businesses I know of are talking about. We’ll talk about the timing of the problem. Just going to give you a couple of predictions or thoughts on my end. I’m going to give you more in depth details about how businesses are solving problems and sales problems around COVID-19, especially when they’ve been impacted heavily. And then we’ll finish with some positive news. So this will be a quick episode, a solo cast just to position us right here on April 6th.

Luke Peters: Let’s start with the initial thoughts. I wrote these down about a week or two ago, but I’ve always thought that COVID-19 is a lot more dangerous than the flu. And right now it’s obvious. Everybody is on board with that. But it wasn’t so obvious even a couple of weeks ago. And I think there’s still some folks that are not sure about that. And today, unfortunately, prime minister of the UK is Boris Johnson was just admitted to ICU, so hopefully he’s fine. But I mean that’s serious when the leader of a free country is now in ICU. I think he’s 55 and he’s had symptoms for 11 or 12 days I think at this point. So this is really serious. I’m going to get more into what that actually means when we talk about the timing. You’re talking about mortality, but there’s also morbidity, which is the amount of people that get severely ill from this, and it’s high.

Luke Peters: What was my takeaway from that, is that jeez, our leaders, you would think they would know more than the average person, but it seems like a lot of investors knew more than a lot of our officials around how dangerous this virus was, which is really disappointing. So that’s my takeaway there is that we got to think and plan for ourselves, and we can apply that to future situations. So let’s set the business tone here. I’m going to interview a lot of people and I’m into several different business groups. So I guess this is more than in depth discussions with 30 or 40 companies, and a lot of them are seeing a demand crush really. We’re super fortunate here at New Air and we’re not seeing that. But I think companies on the consulting side where retail band is, they’re focused on their business, not on hiring consultants or agencies. So there’s definitely a demand crushing a lot of businesses. Everybody I speak to is really concerned.

Luke Peters: I will say today that stocks were up insanely high and I’m actually surprised at that. You noticed on the investor side, I see this hurting GDP for a long time. I think it might’ve been because of another government stimulus potentially. I’m not sure if that was the reason they’re up, but that’s what I heard. We’re not going to be 100% back open in a month. Even if we’re open it’s not going to be all the way. I think that’s going to go back to that demand problem. We’ll check back in a month and see where we are, but that’s what I’m thinking right now as of April 6th is I still am concerned about demand. I’m concerned about so many folks that are out of work. They don’t want to be out of work. Hopefully that doesn’t trickle down, but I don’t see how it can’t.

Luke Peters: And what are business is talking about right now? So right now I’ll give you a couple specific things on what I’m hearing from friends and colleagues. So first off, everybody’s talking about the PPP plan. This seems to be just an outstanding government plan. Giving away a bunch of money, that could hurt us in the future. But for what it is, it seems like it’s a lot more useful than say tarp was in 2008 for the typical company. Because here regular small businesses are going to get significant aid. And this probably in large part is why the stock market is rebounding. Because when you see so many small businesses going to get tens of thousands and hundreds of thousands of dollars, I mean it’s going to be a massive stimulus back into small business.

Luke Peters: I think the folks that created it were really smart. If you look at the testing and how the formulas are set up, it’s put together fairly I think. And they make it so companies can’t take advantage of it. But it’s significant. As far as what my colleagues and friends are talking about, they’re talking about that. They’re getting those all submitted, submitting it today, which I think it could have been submitted this weekend, today. So a lot of companies are right in the middle of this, getting it done.

Luke Peters: A lot of companies are adjusting their demand plan. They’ve been doing that for a couple of weeks. I’m sure the listeners have already looked at that. But if you haven’t, that’s looking at your forecast. Many of them are adjusting down because they’re getting more conservative. Fixing the demand plan protects cashflow. And again, I’m talking to an audience of business owners so I’m sure you guys have thought about this, so hopefully I’m not stating the obvious, but fixing your demand plan is going to fix your cashflow better than cutting expenses, especially with an inventory type company. If you have owned inventory, there’s a lot more money going into that. That’s going to be where the initial time is going to have bigger dividends on the cashflow side. So those are the key conversations I’m seeing. And it’ll be interesting to see how that changes as I do more of the solo casts on COVID-19.

Luke Peters: I’ll quickly talk about the timing of the problem. So I follow a bunch of podcasts. I’m going to give a little shout out to Macro Voices. It’s an incredible financial podcast. I love it. Longterm thinking. They were really bearish on COVID-19, really bearish, but they had a lot of great insights. We can only make our decisions based on the known facts. Obviously government came up with this massive stimulus. We can react to what we know and leave hope out of it for now, but the government really has come through from a stimulus perspective, I think. It’s been massive.

Luke Peters: And now the curve is literally starting to flat now. It’ll be interesting in about a week where we are, but I think in New York is getting towards their apex. But it seems like there haven’t been any huge blowups elsewhere in the country. Here in California they really have seemed to shut it down. That’s great, but it also means they’ve shut down business. There isn’t really a known treatment. There isn’t obviously a vaccine. All of those things are going to be challenges. I think there’s a lot of optimism that we flatten the curve, but my concern, and we’re talking about timing here, is I think we’re going to basically be in this situation until they get a vaccine because we can open some things up, but they’re not going to be able to open up movie theaters or cruise ships. It’s going to be a hazard to fly, unless they figure out better steps on say antibody testing or some other methods. That they may do, and then these things will change. So I think antibody testing will be a big breakthrough.

Luke Peters: The reason I’m talking about this is, what does that mean for Q two Q three, were probably impacted in my view. Hopefully Q4 is less of an impact, but I don’t know. I wouldn’t hold my breath. If the virus is still around then it’s going to have an impact, but maybe we will have better adjusted by that point. Back to more details about what businesses are doing. Hopefully this will stimulate some ideas with you guys.

Luke Peters: I got a lot of friends. We’re doing Zoom meetings, group zoom meetings, we’re having our business meetings that are normally in person over Zoom and talking about these strategies. Obviously a lot of focus on the PPP plan. And then a big focus on a move to online sales. So this could be a longterm mega trend which has already started, but this could just cement it where companies realize that when half of their sales disappear because they’re brick and mortar companies are down, then there’s really a massive push to online. And we’re seeing that.

Luke Peters: If you go to Google trends, and I just did a bunch of research over the weekend, just a basic Google trend research, just look at the trend on… I’ll give you a couple of companies. Look at homedepot.com, look at target.com, look at walmart.com. The trend is way up actually. It’s way up in the end of March and then into April. So what does that tell you? If someone’s in store and they’re not… This is definitely something that a lot of friends and colleagues are talking about, and it could be top of mind for you the listener, if you guys are not already positioned that way.

Luke Peters: Hopefully this podcast has been helpful. I just wanted to give my thoughts as they are at this time. And things change so quickly with COVID-19. We’ll finish it with some positive news. My hope is that there actually are some really positive potential treatments. We hear about clerk, I think you pronounce it, and Z-Pak.

Luke Peters: My concern there is you hear about Boris Johnson going into ICU. When that happens, in my mind I was like, wait a minute, he’s the leader of a country. He would have already received this treatment that may not be allowed or available to everybody, but surely he would have gotten whatever viral treatments are out there. But then you hear him going into ICU and it gives you some concern. Maybe there really isn’t any treatment yet, which no one has said there is, but in the back of my mind or in a lot of people’s minds. You would think that for the leaders of the world that they’ve have some stockpile, or that they know something that we don’t know. But that is a little scary to think about. So there really isn’t… And viruses by the way, they are just a lot harder to create treatments for versus bacteria.

Luke Peters: I already wasn’t optimistic on that, but I’m a little bit more concerned now. But the good news is that private enterprise is really helping. You see everybody pitching in, everybody helping out, people cheering every day in New York, cheering the healthcare workers. So I think we’re going to get through this. There will be a vaccine, but I think it’s also going to unify the country. A lot of companies are helping. I think that’s one of the best things the task force has done is brought all the great American companies together, like they were in World War II. These companies are working together to do great things to help the virus fight.

Luke Peters: It’s good for business and it’s good for the country, but I think on the bright side that’ll be after we’ve won this, it’s going to change the supply chain forever, I think. And maybe I’ll talk about that on a future solo cast. How are you guys thinking about your future supply chains? Right now there is a little bit of a move of Degal globalization. Sometimes companies can’t do it easily and we found that out with the tariffs that went in. It wasn’t just so easy to jump to another country. But I think that is going to accelerate actually in the future. That should change how we think about our future plans as business owners and we’re resourcing and how we’re sourcing and who we’re partnering with.

Luke Peters: We’ll leave it at that on this episode of the Page One podcast. Hope you guys are safe and healthy and hope your businesses are thriving. Also, I’m doing a free evaluation of your online business strategy if you’re interested on LinkedIn or at luke@retailband.com. We’ll take a look at how you guys are doing on say homedepot.com or Walmart or Amazon and a bunch of other retailers. Make sure you’re strong online. That’s where the sales are right now. We’ll do all we can to help you out there. Stay safe and we’ll talk to you guys next time.

Speaker 1: Thanks for listening to the Page One podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about our commerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big box retailers.

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Episode References:  Macro Voices Podcasts

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