When the world changed last year, so did the UK’s 6 million businesses. Shopfronts closed and office buildings went dark on 16 March as the first national lockdown took hold, rendering many business models obsolete overnight. Many firms decided to transform digitally, moving communications online or shifting how they operated, while others completely recast themselves – restaurants became food delivery services and bars turned into greengrocers.
As the economy shows signs of recovery and we venture back towards normal life again, enterprises of all stripes are faced with as big a conundrum as they encountered in March 2020: do they stick with what they’ve become or return to pre-pandemic mode?
“At the start of the Covid crisis, we thought: ‘This is an existential problem,’” says Firdaus Nagree, founder and CEO of FCI London, a furniture store near Wembley. “We’re a showroom-based business and we’ve just been told to shut down.”
He sent his staff home with their IT equipment and altered the business to run digitally. While customers couldn’t come to see the firm’s wares in situ, they could still look at them online. Initially, business was slow, but it started picking up as customers who also couldn’t visit FCI London’s competitors – such as Harrods and Heal’s – sought it out instead.
Seeing an opportunity, Nagree tripled FCI London’s marketing budget. “We realised that there’s so much work that can be done virtually. It needn’t be done in a showroom,” he says.
Matt Atkinson, chief membership officer at the Co-op, came to a similar conclusion. “While we were already on the way to digitising all of our services, Covid fast-forwarded this change, making it happen much sooner than we’d been anticipating,” he says.
Customers have been comfortable going online to access its range of services – from grocery delivery to funeral care – according to Atkinson, who doesn’t think they will change their new way of interacting with the Co-op after the pandemic ends.
“We plan to keep pushing on down this route, ensuring that we’ve got the right level of investment in our new platforms and capabilities to keep growing,” he says.
Redrawing the business
FCI London’s digital transformation has gone so well that Nagree has no intention of changing course either. His company has developed software that enables designers to better imagine its furniture in their designs. Plans that the firm had been making before the pandemic to open satellite showrooms in the Middle East remain on hold.
“We’ve realised we don’t need that,” he says. “We’re just going to keep developing our virtual platforms.”
Dr Vern Neville, founder and MD of Loughborough-based firm ESG Fitness, faced a similar quandary when the Covid crisis struck. Most of the business is based on designing and installing equipment for commercial gyms, operating on a B2B basis.
“All of a sudden, that all stopped,” he says. “We thought it might be the end of our business.”
As gym businesses closed their doors around the world, Neville and his team realised that they’d have to target consumers who wanted to do their workouts at home. A six-figure bank loan enabled them to buy more materials and design smaller machines more suited to domestic use.
Neville estimates that his staff were working between 10 and 12 hours a day at the start of the pandemic. “Everyone was totally committed. It was either that or the company was going to go down,” he says.
Professional athletes and stressed executives became ESG’s new customers. “The way we function as a company has totally changed – and we won’t be going back to how we operated before,” Neville says.
From B2B to B2C
Vegan bakery Cake or Death is another firm that’s been forced by Covid to target a whole new customer base. It wasn’t well known to the general public before the pandemic, because it was a wholesale manufacturer, supplying restaurants and cafés across London.
“I did have a customer-facing website set up, but that wasn’t doing anything,” recalls the firm’s founder and head baker, Katie Cross. “No one knew about me.”
The site used to receive a couple of orders a week, mostly from relatives and friends. Cross says that it was impossible for her to develop this part of the business while her core wholesale operation was so busy. Then, as the first national lockdown took effect in March 2020, all but 10% of Cake or Death’s corporate customers cancelled their orders.
Cross posted a blunt message on Instagram about her predicament. “It was pretty straight,” she says. “I went on and wrote: ‘You’ve got to suppose I’m going to lose my business.’”
But the public began supporting her. In April, May and June she was sending out hundreds of brownie boxes a week. Dealing with retail customers’ foibles for the first time was a steep learning curve, as was handling the large increase of small orders, yet she made it work.
“I’m thinking very differently now,” Cross says. “I’ve built a brand in a way that I hadn’t before. The pandemic has taught me to diversify, because you never know what’s going to happen.”
She has since relocated the operation from the capital to a business park in rural Devon, hiring her husband, who worked in the film industry, to help her mail out the orders.
“I realised that I didn’t have to be in London anymore. I no longer needed this community of cafés and restaurants,” Cross says. “I can be anywhere, within reason, that has a decent postal service.”
She is now a more cautious entrepreneur, hedging her bets and conscious that the past year has proved that anything can happen in business. While she’s not sticking solely with her new business model, she’s also not twisting back to what it once was.
“I’m trying to have a business that works in lockdown and a business that can work out of lockdown,” she says. “Otherwise, I’d be swinging like a pendulum between being incredibly busy and not very busy at all.”