The word “crisis«, in Chinese, is made up of two characters. The first is Weiwhich means danger and the second is heewhich means opportunity. Although technically we are not yet in a crisis, we are facing a moment of opportunities, and it is necessary to have intelligence to identify them and courage to take advantage of them. This was one of the many messages that he conveyed Ignacio Sanchez Villares who, together with Domingos Esteves and Daniel Sánchez Latorre, talked about the current and future challenges of the retail sector.
These three great experts recently met to discuss the new challenges that companies in this sector are facing. The objective of the talk was to share experiences and knowledge, in order to share actionable keys for companies in the sector, which bring them closer to financial and operational stability in these complex moments.
Daniel Sánchez and Domingos Esteves highlighted the importance of new relationships in the ecosystem, competitors vs partners, suppliers vs partners and the need to redefine new agreements based on transparency and the common good.
Ignacio Sánchez commented that in order to overcome this crisis and take advantage of the opportunities it offers us, we must do protagonists to teamswho, now more than ever, have become drivers of change, assuming a fundamental role in the generation of new ideas to promote new businesses.
The weight of omnichannel
Omnichannel is practically a given in most companies. The real challenge is to empower the omni-customer, that is, the one who buys in all the ways that retail offers. The companies have already provided the means, now they lack convince users to use and take advantage of them. It was highlighted that beyond tending to be customer centric, you have to think like customers and find a strategy to attract them, with what we know about them thanks to the data and the tools that we have.
It was recalled how the pandemic has accelerated a conversion to eCommerce, consolidating new standards such as delivery in one hour in large cities and free returns. Maintaining these levels of service is creating a problem for companies, which have to bear costs that do not stop growing. This is the case of returns and reverse logistics. Domingos Esteves emphasized the need to shift towards a more rational and sustainable model with the environment, seeking a balance between being free of charge, customer satisfaction and economic-financial viability of companies.
Control of cash, treasury and the rest of the working capital they are vital for the survival of companies at this time, especially thinking in the long term, since it is what will allow them to survive, adapt and even grow. In this sense, Ignacio recalled that companies disappeared in the last major crisis due to lack of liquidity, not solvency, because they were highly leveraged. The lack of access to credit killed them.
Do not lose sight of the medium and long term: right now the short term is what is urgent for companies; payment of credits, recover the level of sales, or not lose market share. To this end, companies must have greater awareness of risk management and mitigation and decision-making (cost&risk reduction management), through procedures and contingency plans, in the face of increasingly permanent uncertainty. The great importance of efficiency, productivity and launching initiatives to optimize costs as strategic pillars cannot be forgotten either.
“Despite having many negative indicators in historical records, such as inflation or the rise in interest rates, we are also in a moment of opportunity for companies to improve their processes and technology and be more efficient in their business, through automation with Artificial Intelligence or taking advantage of Big Data analysis”, comments Daniel Sánchez, partner at Expense Reduction Analysts. “It is time for leaders to trust their teams more than ever and to undertake the appropriate restructuring to take advantage of the moment.”
