How Businesses are Turning Temporary Pivots into Permanent Revenue Streams
Business owners everywhere have had to devise pivots to weather a global period of economic disruption. But among them, some have discovered that their pivots could become long-term revenue streams, and if they hadn’t been forced to develop them, might never have considered their new strategies.
We spoke to two very different businesses who have developed long-term opportunities in times of adversity: a family-owned jewellery company founded in 1975 and an e-commerce apparel business founded by a serial entrepreneur in 2010.
When a US family-owned jewellery business was forced to close its retail store for an indefinite period, it needed to find a fresh revenue stream to cover payments to vendors and its mortgage. We spoke to their Marketing Manager to find out more.
What did you do when you realised your retail store had to close?
Each year we do events called Gemstone Roundtables. These are in-store events where customers can place “dibs” on gemstones at reduced prices. Because we couldn’t do this while our store was closed, we needed something similar online.
We decided to try an experiment by hosting a live Gem Show on Youtube and Facebook each week. Although it was just an experiment, the first show generated over $10,000 in sales so we decided to continue with the show each week. We’re now consistently selling over $10,000 from these shows, which helped immensely to get through the crisis.
Have there been any other upsides to the online shows?
Absolutely! With the brick and mortar store closed, we haven’t been able to engage with our customers in person. With the live shows, customers can still see the newest items, talk with the owner and ask questions. It allows us to keep in touch with our previous customers and gain new customers.
Does a retail business need a sizeable following on social media to find success with this kind of idea?
It does help. When we started our shows, we had over 50,000 followers on Youtube and 10,000 followers on Facebook. But many of our viewers are new. We advertise our shows each week through Youtube ads and Facebook ads targeting relevant demographics. Anyone can do that and it’s fairly inexpensive.
We definitely wouldn’t have found this outlet unless we had to close. It turned out to be much more successful than we imagined it would. Because of that, we’re going to make it a weekly event, even now as we look to reopen our physical store.
An online curator of all-over print clothing and a leader in festival fashion used new marketing channels to fuel their pivot into face masks while usual revenue streams were unattainable.
What position was the company in before sales were disrupted?
Building up overall liquidity has been a high priority for the past three years. As an avid investor and student of the financial markets, I know that companies don’t go out of business for having a bad income statement, they go out of business because of a lack of liquidity! So we’d planned to have enough liquidity to last 12 months with a worst-case scenario amount of revenue. However, although we’d planned for a recession for multiple years, we did not plan for a health crisis on top of a financial crisis.
How did you pivot your business in response?
Our e-commerce store is in a very challenging position because we sell fashion items to attendees of music festivals. As a result, we’ve had to pivot in a couple of ways. First, we are shifting our marketing from mostly festival clothing to focus now on other uses of our clothing, such as lingerie or loungewear. When music festivals pick back up, our shift to face masks will continue to be a revenue stream. Masks aren't just used for medical reasons; they will be purchased by festival-goers to protect their faces from dirt, dust, wind, and sun while staying fashionable at the same time. This way, our investment in new products has a future beyond the short-term reason for their development.
We were also able to move our marketing team onto TikTok and actually dedicate time to the new platform. Around half of the users on this video-sharing social networking service are aged under 34, which makes it a great place for us to showcase our products in engaging ways, including our new face masks. The test has proven to be successful and we now see this channel as a long term platform for us to continue our growth and to communicate with our audience in a unique way.
Is there a mindset that’s helped you innovate through fresh ideas and keep pushing forward?
Yes. First, change what you can and accept what you cannot change. Second, I think that staying calm during any type of storm helps tremendously. I always believe that if our team is intact and we remove barriers for them to focus on improving our business, we will always find a way.
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