Wang Quangeng, Former Director Of The US Bond Company, The Survival Strategy Of The Retail Industry Under The Epidemic Situation

Under the great crisis, there are always amazing new opportunities. The outbreak of the new coronavirus has exposed all kinds of weaknesses, and has also provided a turning point for profound transformation.

The workshop will then share the experience of entrepreneurs at home and abroad through the theme of "miracle under the great crisis", and also show the resilience and vitality of Chinese private enterprises in this crisis, and the chaos before dawn, hoping that these stories can converge into light and illuminate the front.

This is the first time that Wang Quangeng, the former director of Metersbonwe, and the original executive director of the good boy (China) Trading Group, CEO, is a response to the retail business.

In 2020, a sudden outbreak broke out.

It has a great impact on various industries, especially in restaurants, hotels, tourism, film entertainment, retail, logistics, transportation, manufacturing and other industries.

The retail industry faces three major challenges:

　　 1, sales dropped sharply: More than 90% shops closed below the line, basically no sales, online electricity suppliers also have 50-70% orders decline.

　　 2, cash flow pressure: Without inflow, labor and rental costs outflow everyday, resulting in negative cash flow, especially for small businesses.

　　 3, difficulties in resuming work: Retail stores, factories, logistics and offices are hard to get back to work.

How can retailers survive in the face of severe challenges?

Small and medium-sized enterprises face different challenges and different survival strategies.

　　 Survival strategies for small retail enterprises

According to Tsinghua joint research of 995 small and medium-sized enterprises, 34% of the enterprises can only maintain 1 months, 33.1% of the enterprises can maintain 2 months, 17.91% of the enterprises can maintain 3 months.

That is to say, 85.1% of the enterprises will stay at least 3 months.

　　 How should we spend the negative cash flow crisis in the past two or three months?

Tsinghua University Joint Research 995 small and medium enterprises report.

Authors: Zhu Wuxiang, Liu Jun, Wei Wei

22.43% of the enterprises plan to reduce salaries and reduce salaries, 21.23% of enterprises are ready to make loans, 16.20% of them choose to suspend production and go out of business, 13.58% of their shareholders increase their own capital, and 10.16% of them choose private lending. Of course, enterprises may take many ways at the same time.

　　 What can small businesses do?

　　 First, reduce unnecessary expenditure and control cash outflow.

　　 1, stop the goods that spring and summer have not produced, reduce the purchase goal of autumn and winter, and reduce the expenditure of new purchases. In the later stage, according to the situation of epidemic control, the proportion of replenishment should be increased quickly, and negotiations with suppliers should be made to delay payment in batches.

　　 2, reduce labor costs. From bottom to top, during the epidemic situation, we voluntarily negotiated salary cuts to overcome difficulties. From the most influential catering industry, human cost is the second largest expenditure after the cost of raw materials.

In the first half of 2019, the bailing report ended June 30th, with an operating income of 11 billion 690 million yuan, a staff cost of 3 billion 650 million yuan, an income ratio of 31%, and a monthly expenditure of up to 610 million yuan. If there is no income, how many months can it sustain it?

Therefore, enterprises should refine the basic salary, post salary, bonus, five risks, one gold project and so on. According to the priorities of the business, we will work out a batch rework plan and a rotation system. We can not resume work and do not carry out tasks. We should take early annual leave and rest.

At the same time, enterprises can also allow managers and employees to discuss ways of reducing labor costs from the bottom up. The Ministry of human resources can negotiate with each other according to the latest policy of people and society, and formulate various systems and measures to reduce labor costs.

We should pay attention to balance in implementation. Manpower is cost and also a valuable asset for enterprises.

Measures to reduce labor costs are still difficult to implement. If the boss is demanding from top to bottom, it may cause employees' dissatisfaction, lax or even labor disputes. Therefore, the implementation of good will test the boss's leadership and corporate culture.

Shenzhen has a restaurant brand wooden barbecue, insisted on opening, since the beginning of January, revenue fell more than 80%, the monthly fixed expenditure of 50 million yuan, according to the amount of funds to support for 3 months, facing the test of life and death.

As a result, more than 4000 full-time employees signed a petition and voluntarily reduced their salary by half of the voluntary petition. Last night, listening to Sui Zhengjun, the founder of barbecue barbecue, introduced 10 days' time, the signing rate was 99%, and the salary expenditure dropped from 27 million yuan to 9 million 500 thousand yuan.

The key to their success lies in the leadership of the founders, as well as his hard work in building corporate culture values over the years.

　　 3, reduce rent and close the loss shop. Arrange the sales team to communicate with the platform or the property side and negotiate the exemption or reduce the rent during the epidemic.

Wanda took the initiative to take the lead in leasing businesses for a month, and online Alibaba also took the initiative to introduce measures to help businesses. In addition, shops that have lost money may also be considered closed.

　　 4, reducing advertising and marketing expenses that can not generate income can directly promote sales retention. Subdivision projects, brand advertising, store image, display, network communication, packaging, marketing activities, etc., are cancelled, postponed, reduced, retained or increased according to important emergency level.

We should pay attention to the judgement in implementation. Some marketing expenses are both cost and open source.

　　 5, according to local policies, apply for delayed repayment. Apply for government tax relief. Pay close attention to local policies, and countries and regions have been studying preferential policies for taxes and fees.

　　 6, it is difficult for us to save ourselves, and it is difficult to reverse the situation, break off in time and suspend production temporarily. If you keep green hills, you will not be afraid of firewood.

　　 Two, handle inventory, turn online sales, or sell to the shortage of electricity providers, discount promotions, increase cash flow.

　　 7, inventory is the biggest cost.

　　 2019 in the autumn and winter, the backlog of stock is processed in time, and the new products are sold online in the spring of 2020. Inventory takes up a lot of cash and depreciates every day. Enterprises should try their best to sell goods through various channels and cash back.

　　 Three, increase financing channels to supplement cash flow.

　　 8, banks are also increasing support for SMEs' capital delay and lending. Through bank lending, shareholder financing, private lending, employee stock ownership and other ways to increase cash stocks.

　　 Survival strategy of large and medium sized retail enterprises

For large and medium-sized retail enterprises, although they are also facing challenges, they are more capable of resisting risks than small ones.

The workshop has investigated 200 private enterprises in the private board. The survey shows that 82% of the group members can maintain cash flow for more than half a year, so cash flow is not the biggest difficulty.

To take the strategy of the next 3-5 years as the guide, pay close attention to the epidemic situation and clear the current countermeasures, we must not be confused, overreact and lose our way.

The impact of Tsinghua economic and Management College on the epidemic situation of 212 large and medium-sized private enterprises (including 114 listed companies) in China is as follows:

Wang Yong, Liu Mengchu and Wang Linlu, the Research Report on the impact of the new pneumonia epidemic on 212 large and medium-sized private enterprises in China

Different scale enterprises take different measures.

The bigger the scale of revenue is, the stronger the motivation is to take market development and develop new business measures.

Wang Yong, Liu Mengchu and Wang Linlu, the Research Report on the impact of the new pneumonia epidemic on 212 large and medium-sized private enterprises in China

　　 What measures can be taken by large and medium-sized enterprises?

　　 First, inspire employees' confidence, clear direction and practice values.

Small and medium-sized enterprises are different from small businesses. Small businesses are faced with the test of cash flow. In order to survive, some enterprises can only reduce salaries and reduce salaries.

But manpower is cost and also a valuable resource for enterprises.

Under the epidemic situation, employees are in a state of panic. If they are not willing to work from bottom to top, and have good corporate culture and boss personality charisma (Leadership), companies will be forced to lay off and reduce wages from top to bottom, which will cause more panic and slack.

Even excellent talents will be lost. If they go to rival enterprises, they will not get through the crisis and even increase their business crisis.

Therefore, the first step of medium and large scale enterprises is to care for employees and customers, inspire employees' confidence, clear direction and practice values.

Lin Qingxuan, the founder of the brand, sun Lai Chun, has closed most of the 337 shops online, and its performance has dropped by more than 90%. After 8 days of decadence and anxiety, a letter of "Wan to the moment" has been written on the evening of January 31st to all employees, which has stimulated the confidence and fighting spirit of the staff.

Unexpectedly, in February 1st, the company's performance was reversed. Wuhan's more than 30 stores are still second of the total in the whole closed business, and the overall performance of the country has increased by 40% compared with the same period last year as of 9.

The entrepreneurs of the 1518 groups of fashion private directors of the workshop, with their business performance declining sharply and without cash flow pressure, do not complain or ask for it. They are still in the heart of the country and are in the heart of the disaster area.

Group members include Bosideng, Song Li Si, love, Han today international, Annell, an Zheng fashion, I music home, rookie group and so on.

　　 Two, increase the power of open source and innovate the business mode.

　　 1, customers open source: increase community marketing, enhance user stickiness and repeat purchase rate. increase The repeat purchase rate of old customers opens up new customers.

The clothing brand has more than 600 stores under the line, and 90% stores are closed. So enterprises urgently adjust to the "online based, offline supplement" strategy, so that more than 600 store owners in WeChat circle of friends, WeChat group news, communicate with fans one to one, each half an hour to launch specific products.

Nowadays, the daily activity of the "mini man" mini program has exceeded 65 thousand, selling more than one million dollars.

　　 2, channel open source: from top to bottom full staff marketing, expand online new channel business, digital transformation.

A few days ago, I had an exchange with the members of the private banking association. The epidemic affected more than 90% of the sales of the stores under the line. The sales of online electricity suppliers affected 50-70%, and the sales impact of micro businesses, community electricity providers, network electric providers and live short videos was only 10-20%.

This rule is similar to that of other enterprises, so the early investment trend business mode of enterprises is small.

Many enterprises have accelerated the transformation and upgrading of online channel business.

At the beginning of January, Anta and FILA executives held a meeting. The second and third days of the new year launched all online sales. From the top to bottom, everyone opened a shop. Metersbonwe, Barbara and other brands had beautiful posters in their circle of friends.

　　 3, product open source: big data analysis, insight into customer needs, emphasis on R & D innovation.

On the one hand, store inventory on line is on the backlog, on the other hand, e-commerce enterprises are out of stock and can cooperate horizontally.

New products in spring 2020 can be integrated into autumn. Summer goods, production can not keep up with the temporary production, after quick replenishment. Commodities in autumn and winter extend into the growth category suitable for consumption after the outbreak.

Under this epidemic situation, even online business has declined, and there has also been an increase. In addition to the business mode, an important reason is that the category is different.

I asked GAINREEL how big the epidemic was? He said there was little impact on online orders, because GAINREEL was selling young women's fashion bra and home products.

I asked Dr. Marie how big the Dr.Mary epidemic was. He said that it had no impact and even increased sales targets to the team, because Dr.Mary sold mask, and the product just satisfied the current demand.

Everyone stays at home, so many products are not used, so they drop, but beauty, underwear, home fitness (Yoga wear), bathing, body beauty, aromatherapy and other home categories are rising; respirators, disinfectants, eye glasses, thermometers and other epidemic prevention medical products have become strategic dilabuses, and even mask production equipment is out of stock.

It seems that there is no weak market, only a weak product!

　　 Three, reduce expenses and reduce costs.

In 2019, many enterprises were hard pressed. The economic downturn and the impact of the epidemic will bring greater challenges and uncertainties in the future.

Many enterprises also increased the number of employees, opened direct stores and increased advertising investment a year ago. Under the uncertain crisis, they should be adjusted to a more prudent strategy.

In addition, large and medium-sized enterprises have many projects, large organizations, redundant personnel, long leaders, good news, no worries, low efficiency, and serious waste of costs. They need to lose weight and reduce costs.

The general manager and the chief financial officer should take the lead in making urgent cost control plans and key tasks, details to specific projects, and push them into execution according to weekly, daily and responsible persons.

　　 Four, increase financing to raise 6-12 months' cash flow reserve.

Wang Yong, Liu Mengchu and Wang Linlu, the Research Report on the impact of the new pneumonia epidemic on 212 large and medium-sized private enterprises in China

If the epidemic is not controlled, the cash flow pressure will gradually increase, and cash flow reserve should be increased to reduce risks.

Among the 212 large and medium-sized enterprises surveyed, 41.98% of them thought that cash flow could last for more than six months, accounting for 34.91% of total three to six months, exceeding 70%. Visible cash flow is not the most prominent problem of large and medium-sized enterprises.

However, it should not be overlooked that 23.11% of the cash flow of the surveyed enterprises will be dried up in three months.

Generally, the minimum cash flow target for 3-6 months is 6-12 months.

　　 Five, adjust the annual business plan, optimize the strategic plan for the next 3-5 years.

Last year, the 2020 year's business plan and budget were basically invalid. We need to reopen the market immediately and systematically adjust the annual business strategy, business plan and the allocation of time and resources of human property.

Simulation diagram of sales revenue and cost forecast curve under different epidemic levels in 2020

　　 1, sales revenue is forecasted.

The sales department should re predict the monthly sales of the store and reestablish the store expansion target.

At the same time, there are two prediction models which are optimistic and pessimistic.

There was little revenue in February. Sales in the first quarter were directly hit. Sales in the two quarter may be gloomy, and sales in the three quarter are expected to rebound. The direct impact of the epidemic on 3-6 months and the indirect effect in 7-12 months are mainly predicted.

Assuming that A is optimistic, the epidemic will directly affect 3 months. B pessimism predicts that the epidemic will have a direct impact on 5 months and indirectly affect the second half of the year. Based on the actual trend of February, we estimated the sales revenue under the impact of the epidemic in 3, 4, 5 and June, and then predicted the annual income impact.

Tsinghua School of management and research, with individual customers as the main retail industry, expects 36% of the company's annual revenue decline 10%-20%, 24% of the company's annual revenue decreased by 20%-50%.

Wang Yong, Liu Mengchu and Wang Linlu, the Research Report on the impact of the new pneumonia epidemic on 212 large and medium-sized private enterprises in China

　　 2, net profit and cash flow are forecasted.

According to the revenue forecast of the sales department, the finance department calculates the monthly hard cost and gets the net profit, and further determines the net cash flow.

In the simulation sketch map of sales revenue and cost forecast curve under the influence of different epidemic levels in 2020, the shadow part is loss and negative cash flow, and each enterprise can simulate and predict based on actual sales and cost data.

According to the forecast results, the general manager took the lead with the core executives to set the net profit and net cash flow target during the epidemic period and the whole year.

Many bosses did not like to look at financial data in the past, but at this time, they must learn to look closely at the financial profit and loss statement, the cash flow statement and the balance sheet, so that the measures can be accurate and effective.

The financial profit and loss statement (profit statement) should be carefully analyzed and controlled.

Cash flow statement, especially to analyze and control cash flow expenditure.

　　 3, the annual business strategy and business plan re - enacted.

According to annual net profit and net cash flow target, push forward the annual business plan.

The general manager takes the lead in directing the heads of departments, and coordinates the annual business strategy, annual business plan (existing retail store plan, new shop plan, commodity development and purchase plan, marketing promotion plan) and performance appraisal plan.

In addition, the general manager and the strategic departments should pay close attention to the change of the epidemic situation. At the end of 3-4, we can basically judge whether the impact on the enterprise is short or long term.

Large enterprises should also consider the strategic choice of group business combination and how to prevent systemic risk in future strategic layout.

The project of turning losses into hopelessness and without future strategic value will be suspended and coordinated, and the pace of development of the "strategic Trilogy" will be well laid out in the long term.

For most enterprises, they are faced with survival problems at this time. But for a small number of outstanding enterprises and entrepreneurs, the crisis can turn "danger" into "machine".

What are the rules and strategies?

Always strengthen "confidence and hope" and move towards the future.

The epidemic will pass away. This is a short-term and phased impact, not a systemic and structural one.

As long as we have a positive attitude, we must help ourselves comprehensively and deal with external uncertainties with various internal plans. We must always have confidence and hope for the future. Winter will always be over, and spring will come.