The implications of COVID-19 on go-to-market strategies

The following is my assessment on the pandemic’s implications on commerce, as well as consumer and market dynamics affecting early stage brands' go-to-market strategies.

Michael Movitz, Founder

April 2, 2020

5 Min Read
The implications of COVID-19 on go-to-market strategies

This is Part 2 of a two-part series. Read Part 1 here.

As I write, events continue to unfold before our eyes, the flow of information is constant, and the entirety of what’s happening is fluid. We know the COVID-19 pandemic has created an unprecedented time of uncertainty, a range of emotions, and behavioral changes. Take a moment to breathe (like right now). The disruption we’re experiencing is extraordinary, but it is temporary, and we will return to normal even if a new normal is yet to be defined. ​ 

What’s happening with commerce/sales dynamics

  • Retailers are pausing, postponing or cancelling their category review schedules, resets and promotional calendars. Buyers and related teams are working from home or are in stores to just help keep shelves stocked.

  • Ingredients, packaging and other parts of the supply chain before production may be harder to obtain due to closed ports and worker furloughs. 

  • Co-manufacturers may be forced to reprioritize and reschedule production runs to accommodate higher demand products or for larger customers.

  • Consumer shopping, spending and eating habits are changing (for now? for good?)—less in-store shopping and more ecommerce and delivery.

  • Panic buying resulting in out-of-stocks for consumer favorites can translate into “buying what’s left” instead of “just go without,” meaning natural products that might not have been considered or did not have the awareness previously are getting new trial.

What it means

  • New product introductions and new distribution at retail may or will be delayed.

  • Consumers are glued to their screens for entertainment and information for the next several weeks or months. Digital advertising is exposed to more eyes.

  • Quarantining and nesting means more food is being consumed at home, whether from pantry loading or restaurant delivery/take out. Even so, the rate of consumption doesn’t really change (save for nervous eating), so consumers may find themselves with pantries full of shelf-stable products in a few months, which translates to lower or slower trade orders in Q3/Q4 this year.

  • Food and pet care industries are historically recession-proof and non-cyclical, though (the specter of) high unemployment can change buying and consumption habits. This can be an opportunity for natural product and wellness lifestyle companies, particularly when viewed through the lens of the values that our industry and most founders are rooted in: healthier/better for you, food-as-medicine/functional, supply chain transparency and safety, etc. as consumers rethink their hygiene routines, treating their chronic conditions and supporting their immune systems. The wellness sector was already experiencing solid growth. This event may give it more fuel.

  • I’m a strong believer in the notion that consumers committed to a certain diet or food lifestyle (certainly by necessity but also by choice) will make other changes in their life before they concede changes to their food and personal care habits. Your core consumers are likely to remain loyal even in an economic downturn. Your mainstream consumer tends to be less loyal and more sensitive to economics. It’s reasonable to expect these consumers to trade to natural products from conventional CPG brands as a first adjustment (staying in the wellness halo but stepping back a bit from intensity), or to organic private label.

What to do

Keep in mind we want to act with two strategic goals in mind: protect and strengthen our vulnerabilities during the crisis, and set the stage to emerge post-crisis ready to capitalize on opportunities.

1. Strategically adapt.

  • Reconsider your commerce strategy—take control over what you can control. If you can’t rely on brick-and-mortar or distributor processes right now, focus on ecommerce and DTC. If you don’t have an omnichannel strategy including e-commerce, it’s time to develop one. Consider alternative channels like meal kits, snack boxes, delivery services, etc. that are getting a lot of consumer play right now. (This may not be a temporary phenomenon. Consumers may discover new channels and methods to shop, buy and receive the things they want).

2. Stay focused.

  • Get organized to meet your current obligations and concentrate on what’s working; keep it simple.

  • Lean in to your creativity, tenacity, entrepreneurial mindedness and nimble/adaptive nature.

  • Be purposeful and thoughtful in how you articulate your proposition with investors and approach your go-to-market strategy. Staying the course or relying on your prior plan may not be the best course anymore.

  • Overcommunicate to your current investors and stakeholders. Create a dashboard to help monitor KPIs and communicate to those key operational stakeholders.

  • Stay in close contact with your suppliers and co-manufacturers in order to react quickly to unexpected changes.

  • Stay in close contact with your retail and distributor partners to understand sales volume trends and demand, in order to maintain necessary inventory level.

3. Act and speak with empathy.

  • Support and regularly communicate with your retail, distributor and trade partners with empathy, don’t “sell” to them right now. Ask them how you can help. Offer to stock your products in stores if you can—just make sure any volunteering you do does not compromise your own health or your business’ health. If you falter, there might not be more volunteer opportunities.

  • Adjust your consumer message to be empathetic. 

  • Once things settle down, seek out feedback from consumers who might have tried your products for the first time. These are conversion opportunities.

​Again, this too shall pass. Take practical and prudent action on the things you can control, and accept the things out of our control. Of the latter, go with the flow, for resistance is the source of stress and anxiety. Acceptance is a source of peace and strength. Allow the disruption to inspire new possibilities that will serve us better in our lives. While much seems to be changing, what is important to us has not changed.  Relationships may take on more importance, and certainly good health and well-being is a priority. Breathe, and be grateful and mindful of the many blessings we have in our lives today, right now.

Michael Movitz is the founder of The Movitz Group LLC, which serves emerging innovative brands with winning go-to-market strategy development and execution, optimization of sales and distribution strategies, and drawing out the nuance and essence of a brand's position to tell its story better.

About the Author(s)

Michael Movitz

Founder, The Movitz Group LLC

Michael Movitz, founder of The Movitz Group LLC, has more than 25 years of natural/organic products industry experience across retail, manufacturer, broker and market research organizations, including 16 years with SPINS. The Movitz Group exists to support the simultaneous progression of humanity and enterprise by building purpose driven businesses and business profits together, rather than building one at the exclusion of the other. The Movitz Group serves emerging innovative brands with winning go-to-market strategy development & execution, optimization of sales and distribution strategies, and drawing out the nuance and essence of a brand's position to tell its story better. The Movitz Group also serves equity and CPG partners with market and competitor due diligence to help them make better investments and improve success opportunities.

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