“Pivot” is a word that we have been hearing often since early last year, after COVID-19 (coronavirus disease 2019) became global and practically shut down the world economy for about three months in 2020. It referred, rather loosely, to how big and small business have managed to transform and adapt to the changing business environment.
But not all are lucky enough to “pivot.” Transportation, travel and tourism, sports and recreation, and food service are among those still grappling with the pandemic’s consequences. The big and small have been affected. From major bus companies and professional sports teams, to individually operated jeepneys, all have been suffering.
Philippine Airlines is letting go of over 2,000 employees. Cebu Pacific is not doing too well, either. Shangri-La Hotel in Makati and Marco Polo Hotel in Davao City are among those that had to close their doors. And, Phoenix Petroleum is now reportedly available for sale. Many other businesses have had to suspend operations or stop altogether.
Packaging is booming, however. Companies making boxes in particular have been up, boosted in part reportedly by sales of liquor and canned goods. In some way, package delivery is also enjoying a resurgence, allowing some transport companies to suspend passenger operations and focus meantime on cargo.
“Pivot” is something that everybody has been learning, especially the Filipino that is not about to be put down. A couple of business friends, for instance, have had to “transform” to survive. They have adapted and improvised. Their tales showcase what “businessmen” can do, either as companies or as individuals, to survive a crisis.
Big businesses have deeper pockets, and thus more resources to devote to employee welfare, health protocols, digital platforms, and the rising cost of logistics. More important, their deep pockets allow them to hurdle business losses over a longer period of time. Smaller businesses and individuals, on the other hand, can easily go under after just three months without a stable revenue stream.
This is not to say that the situation is hopeless particularly for the small. Smaller operations can also be easy to fold up and restart. Small retailers can shut down in one place after a bad season and reopen in another site the week after. Their “stores” are mobile, and can be easily packed, moved, and unpacked where the market is.
We are all going “retail” now, down to the smallest markets available. Soliciting customer information has become more granular, with detailed information becoming more crucial to identifying markets and niching. We now need to target specific segments, shunning broader “shotgun” approaches, in favor of sniping.
One friend, Richard, was previously involved in international sports competitions as well as in marketing and events management. He had to give up his breadwinner role to his wife, who has been enjoying a boom of sorts as a sports trainer. Other than having to learn domestic chores, my friend also had to “pivot.”
It serves him well that he was a competitive athlete in his youth, maintained his health and physical well-being, had been in sports mentoring, and has extensive experience officiating sporting events abroad. All this, plus connections to an extensive network of sports marketers, allowed him to now offer his services as a guide to wellness in corporate settings.
But it was still a difficult pivot, especially for one who now needs to fend for himself after having been waited on for most part of his professional life. The “change” in roles at home was also a challenge, but he has happily adapted to his new status in the domestic front.
Another friend of ours, Joaquin, took a somewhat different path, choosing to put up a new business primarily to help his old business transform. And with that, he is now also trying to help other businesses adapt. And this was the result of learning a painful lesson in 2020: that there is a vast talent gap in e-commerce expertise locally.
Joaquin’s motivation was “the struggles faced by brands as they entered the e-commerce sphere.” He calls the new business the “hyper-accelerator,” and it partners with companies “that would like their e-commerce sales to grow exponentially at the quickest and most efficient way.”
“Unless you’re a multinational conglomerate, chances are the talent you’ll need for ads strategy to warehousing and fulfillment expertise is going to be hard to come by. And when you do find them, it’s going to be cost-prohibitive. Because of that missing e-commerce infrastructure, early on we devoted ourselves to building things in house,” Joaquin tells me.
He uses what he describes as the “3×6” model, or helping clients grow “3” times in “6” months. One client, a cosmetics brand, actually grew “30” times in six months, he said. And this was achieved by allowing the cosmetics company to focus on products and on building the brand, while the “hyper-accelerator” looked after everything related to e-commerce: digital sales and marketing, fulfillment, logistics, channel management and customer service, among others.
“Our business model is unique in the sense that our share of the profit comes only after the brand we’ve partnered with makes a profit,” he says, which I believe is only fair considering that putting your trust in a “new” company to implement your digital strategy is a major leap of faith.
Indeed, in every crisis, there is opportunity. The year 2020 was a difficult period for most. The year 2021 may not be any different. It is now up to us to look for opportunities and make something for ourselves. With or without the pandemic, the world will continue to turn. Success will not come to those who chose to simply wait.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council