SECOND STRAIN LIKELY TO CAUSE MARGINAL PROFITS

A news regarding second wave of COVID-19 is making rounds in the country with increased number of positive COVID-19 cases in Maharashtra and Kerala. The Government has been imposing stringent rules in order to avoid the second wave getting rampant.

The first wave of COVID-19 hit major part of the industries stooping the profits very low. Among the badly hit were the small time retailers and distributors of Mattresses. Lockdown during COVID-19 gave rise to reduced production of mattresses that in turn reduced the business for distributors as well as few logistics companies.

Prior to COVID-19 lockdown distributors stocked up the mattresses in their warehouses but when the pandemic hit, the businesses stopped due to no production and stocked mattresses remained intact in the warehouses.

CHALLENGES FACED BY DISTRIBUTORS

While some of the distributors own their own logistics some do not as it would be difficult for them to maintain the fleet of vehicles as the production has come down from lockdown and in turn has disrupted the distribution chain as well.

Before COVID-19, the distributors highly relied either on the local autos or on their own logistics company for distribution of mattresses. But the local transportation lacked punctuality and reliability in delivering of goods safely. Distributors had to arrange a delivery person to handle the mattress in the transportation vehicle.

“The distributors could not rely on the local transportation for their distributions. Most of the transporters do not keep up time. When they book a consignment at 1 pm, transporters will try roping in another consignment within that time frame. Sometimes transporter will not be able to pick up the consignment on time. When distributors try reaching them through phone, transporters do not pick up and distributors keep getting calls from the retailers as they would be waiting at the pick-up point,” says Mr. S. Srinivasan, Secretary ISPF.

Post lockdown, the scenario was better but the profits were not totally recouped. The pending production orders that were placed during March and April were fulfilled and there arose a need for distributors.

COVID-19 Vaccine and the reduced COVID-19 cases had given a ray of hope to the industries. If country witness second wave of pandemic, it will impact the profits for the distributors and retailers. Distributors could consider few points that might help in the remodeling the distribution module for an effective business during the second wave.

HOW TO NAVIGATE THIS CHALLENGING TIMES

Omni channel strategy that has been picking up in the last few years is said to have a better reach to the customers. Distributors with beter e-commerce platform stand a better chance in attracting customers and weathering the crisis. During the lockdown majority of the customers preferred online interaction rather than a sales representative interaction. Amazon is one such example where it doubled its profit during the lockdown.

Digital and analytical tools can also create productivity with regard to inventory management, warehousing, and delivery. Demand planning for instance, can help distributors deliver the right products at the right time in the most efficient ways. This helps in better market penetration for the distributors. But the challenge is to decide what kind of analytical and digital help them in enhancing their profits.

Having a digital presence definitely helps the distributors in gearing up in present scenario where the profits are slowly gaining pace. However upcoming COVID-19 second strain might or might not make way for lockdown. But the overall second strain might give the distributors marginal profits if it affects more states.

Mean while Distributors and channel partners can discuss their challenges with the manufacturers for possible early plan of product delivery and filling the inventory. At the same time, retailers can consider bringing in new offers to lure the customers to sell the products. After all, mattress is one such product where, consumers are using it as their workspace during WFH.

ISPF is an industry body which promotes importance of sleep and role of mattress for a Indian consumers. ISPF plays very important role in connecting Indian bedding industry ecosystem. ISPF also acts as bridge between India and international players.