Schools are closed, leisure activities are restricted to a minimum and the working population is called upon to stay at home – the world is a crazy place right now, and the reason for this is the novel Coronavirus SARS-CoV-2. But what exactly does this mean for businesses?
China has been fighting the impact from the epidemic since the end of January, which explains why companies have been dealing with this situation for longer and have come up with creative marketing measures. Businesses from other nations now have the opportunity to learn from them. Together with Andreas Tank, a leading expert on China, we will look at how businesses in China, but also the toy industry worldwide, are dealing with this extreme situation and how the toy sector can learn from this.
People stay at home
The battle against Covid-19 has led governments to take drastic action and ask citizens to self-isolate as best as possible. What does this mean for our society? Instead of going to work or to school, instead of going to a restaurant or an event with friends, people hide in the safety of their homes. This means on one hand plenty of time for one's family or partner; on the other, for digital activities like online shopping, social media, and the like.
E-tailing is booming
Before the virus epidemic, 36 % of retail sales in China happened online already, which makes China the world's largest market for e-commerce. Following the breakout of coronavirus, e-tailing became the backbone of the supply chain because consumers' buying behaviour changed abruptly. Courier services – next to medical staff and public servants who, for example, uphold around-the-clock public transport or waste disposal services – are the aorta during the crisis. To demonstrate to customers that maximum safety applies even to deliveries, consumers receive a confirmation that the driver's temperature test was negative. Inside the epicentre, the city of Wuhan, China's second largest online platform, JD, even trialled robots and drones for last mile deliveries to the shopper.
"Stay where you are! We deliver to you!" was therefore the motto of many businesses in China, even of smaller platforms. Especially food companies like Godiva, Costa Coffee or the wine retailer, Cheers offered delivery services. Aldi China encouraged people to stay at home on Valentine's Day and cook a meal for their loved ones instead: "Romance, handpicked for home." In Germany, many toy manufacturers and large retailers already run online shops and point this out in their marketing measures in order to highlight this service. But even local toy retailers whose website does not feature an online shop can offer to take orders of their customers by e-mail or by telephone and to have them delivered.
China's most significant Internet shopping platform is Tmall, which is backed by the Alibaba Group. Businesses wanting to play a role in Chinese e-tailing will have to open a store here – which the tradition-steeped company, Steiff, did when it launched its Tmall flagship store in February so that it was not only corona-ready in no time, but will be able to secure long-term crucial access to the Chinese market, too.
Brands step up their online activities
The restriction of outdoor activities led, among other things, to cinemas shutting down. A shock for the movie industry and licencing sector which play a pivotal role in the toy industry. In China, however, new movies still celebrated a successful premiere – only that this happened online. And even Universal is offering streaming services in the USA and other parts of the world for movies that launched recently or are about to premiere. Cinemas are also beginning to respond. And Berlin's Yorck group of cinemas is offering season ticket holders free access to the Mubi streaming service.
Other industries are also stepping up their online activities, especially on social media platforms. In China, companies rely especially on WeChat. Porsche uses this platform to draw attention to its new digital sales assistance plus online configurator. Fashion group Bestseller more recently started to work with WeChat mini programmes and created incentives for employees to become actively involved as online sales personnel while simultaneously focussing on digital marketing tools like flash sales and prize draws. A new approach which in the long run will contribute to their business success. Companies from other nations can also bank on social shopping to mitigate lost revenue and conquer new sales channels. Many platforms already offer shopping functions, including Instagram, Facebook, Pinterest, TikTok and more.
Social media play a vital role not just in the sale of products. No matter whether retailers are small or large, it is possible to remain in constant contact with customers, to retain them, and to entertain them. Via feeds or stories, the public can be informed about the company in general or regarding possible opening hours, but also in relation to new product ranges.
Brands sharing ideas with people in self-isolation
It's great to be home – still, at some point, people will get cabin fever. Spending the whole day in front of the television or with the smartphone will become boring at some point. That is precisely when brands can make their mark because customers are looking for new ideas and diversity. Ikea in China, for example, is giving home office tips for a stay-at home routine, all the way down to playing and baking with the kids – while pointing out the matching products from their catalogue. So why not try a new game for a change? And get teenagers to try an evening of board games again?
What this could look like is demonstrated on the "Quarantine Kids" platform. Two sisters seized the moment to do something good. The game and learning designers wanted to give families ideas for playing, to help cushion the effects of boredom for kids. The easiest way for the founders to make their ideas for creative handicrafts available was to upload them to a blog. To increase the blog's popularity, they also set up an Instagram channel. The launch was a total success, not only because of the number of clicks on the website but also the number of followers, which reached a four-figure range after a few hours only. This success took the sisters by surprise and customers are extremely grateful for the pdf files.
Other companies like NOCH GmbH try to score points with their followers with a challenge. NOCH's campaign aims to encourage all model railway aficionados to take a photo of their set-up and upload it to Instagram under the #nochworldwide hashtag. A campaign which draws a lot of attention with the target audience.
Scoring with credibility and personality
For society it is important that companies pay attention to the well-being and health of the general public. People wish to be taken seriously with their concerns and expect businesses to practice good hygiene and safety measures. It is therefore important to demonstrate this publicly. Starbucks and Shake Shack in China publicly announced their internal safety measures like face masks and taking the temperature of employees, sanitising hands and disinfecting surfaces, in order to keep their customers' trust. Other companies, like the machine manufacturer Viessmann assures its clients that Technical Customer Services will remain in operation even through the difficult weeks and sends motivational messages from its branches around the world. Mental health is particularly vital during times of self-isolation at home – especially for children, now that they can no longer play outside. In these times, for example dolls or soft toys become significantly more important, as children entrust their most inner thoughts to them.
Solidarity and a personal touch are essential. All businesses are currently wishing their customers to stay healthy, to hang in there, and keep going. Especially during a festive cultural holiday like, for example, Chinese lantern festival. Andros, Rosenthal, Villeroy & Boch and Zeiss are to be named here. They also demonstrate solidarity with Wuhan by showcasing the city's culinary specialty or calling on others to donate to send out relief aid to the areas most affected.
The impact on the global economy is tremendous and its total extent is difficult to appreciate. China's central government sticks to its 2020 growth targets, because the end of the crisis will also release strong positive forces. It is difficult to predict how people's consumer habits will change. But one thing is already sure in China: In terms of digitalisation, the country has moved yet another step forward. Businesses in the rest of the world are now called upon to pursue a more digital set-up for their customers. The situation requires creativity to discover new sales and marketing opportunities which promise long-term success even when times are back to 'normal' again. As always, the idea is to find an opportunity in the worst crisis.