COVID-19 Aftermath planning. How to come back faster and stronger - Live Webinar (4-30-20)

Okay, all right, we're going to get started now. Everybody, thank you for joining once again for another SureFront webinar. I'm going to introduce our panelists here in a second. He has an amazing presentation, I have to say. I think it's our best yet. And I first want to give an introduction to me. I didn't do that the last few webinars. So my name is Dylan Lowe. I'm the Director of Marketing at SureFront. And SureFront is a collaboration app that's used by suppliers and retailers. You can see that we have it up on the screen right now, if you can all see my screen share. And one thing that's very important is that this is an extremely useful tool during this time. And we have made it— we usually have a free trial, but we've extended that for everybody in the retail industry. So for all suppliers, all sales reps watching right now, you can go to that sign-up button on the top right and sign up for SureFront and start using it right away. And this will allow you to showcase your catalog. You can upload your entire catalog here, build quotes, share line sheets, build orders from there. And the person on the other end doesn't have to have SureFront for you to start using it right away and to send emails and quotes to your buyers and retailers, and also to share with your PD teams too. So sign up for it. If you have any questions about SureFront or want any more tutorials on how to use it, we have a YouTube channel that has a lot of detail there. You can also shoot me a question at dylan, D-Y-L-A-N, @surefront.com. I'm happy to answer any question to help you guys get signed up on it, and we'll send a link at the end of this webinar. But it's a very powerful tool for all of us that are working at home right now to be able to communicate seamlessly on one single app to everybody in your company everybody they communicate to and do business with. So take advantage of this, this opportunity. We've made it free for all of you during this time. And this time I'm going to stop sharing so you can see me and our panelists. This is Kevin Lee. Kevin Lee spent the last 10 years at Mountain Equipment Co-op, which is the largest outdoor retailer in Canada. I'm a big outdoors person myself, so this is exciting for me. They're kind of like the REI of Canada. They have over 3,000 employees, giants, and they have soft goods and hard goods, anywhere from biking equipment all the way to protein bars, yoga clothes, apparel of all sorts. So Kevin was the— spent the last 10 years there, most recently as the director of supply chain. So he's going to know everything. Everything in regards to supply chain and how the industries from soft goods, hard goods, apparel, technology has been affected by COVID-19. So I'm really excited about this webinar today. He's going to give us some great tools on how to help us cope and get through it and plan for our future, which is what that webinar is about. So without further ado, Kevin, I'm going to hand it over to you, and thank you for presenting today.

Thanks, Dylan. How y'all doing? I'm gonna switch so that I can start sharing here. Uh, just know where it works. Dylan, do you mind, uh, sharing your screen again? For some reason, the button for me to take over is only there when—

Sure, give me one second and I'll switch over to My screen?

Yeah, okay, there we go.

And let's pull this up. Oh, did you get it?

Yeah.

Okay, perfect.

Great. Thanks everyone for joining. I'm going to try to keep this lighthearted and entertaining as you're joining us for a webinar and hopefully as informative as possible as we can fit into, you know, 30 minutes or 45 minutes. Just a little bit about me. I was born and raised in Vancouver, Canada, on the West Coast. I like to consider myself a prototypical standard Cascadian. I like drinking craft beer and I ride bicycles, which pretty much will describe 80% of the folks in the Pacific Northwest. I did engineering in university and I was also a Chief Scout, which is the Canadian equivalent of the Eagle Scout. I worked in the high-tech manufacturing industry for several years as a practicing engineer, and then I made a leap over to Outdoor Retail, which is a story in itself, into a management trainee program that they had at MEC. I had the, the awesome experience of being able to immerse myself in retail operations in the private label commercialization cycle, warehousing, inventory management, logistics, and also analytics. I finished my career, as Dylan mentioned, as a director of supply chain planning and supply chain analytics. My job at that point really was to attempt to bring forward the problems of the future and attempt to deal with them in the present. Certainly, that seems no more timely than now to be talking about how to bring forward the problems of the future to the present. In fact, maybe they're already here with us. I'm happy to spend some time with everyone here and to talk about some strategies I have for dealing with everything right now. Something interesting happened. It's spring. It's ant season. And I was just going around my house sealing off places where I saw ants coming out. And one day I came out after I'd sealed off an area and I noticed something really peculiar, which there were a bunch of ants, way more than you'd ever expect clustered together, and they weren't really doing anything. They were still alive, they're still moving, but I could tell that they were basically hovering around what used to be the entrance to their, their, uh, their ant hill. Um, and what was also confusing is that, uh, just 6 inches away from them, I could see ants from the same colony leaving and going back in. So somehow, uh, this portion of ants that, that I saw, they were so hardwired by scent trails to go back to the same entrance and same exit that they couldn't even tell that there was a new secondary entrance that had been created 6 inches away. And ultimately they died because I killed them. But I thought that was an interesting analogy for what's happening right now. The world has changed overnight. And it— maybe 3 weeks ago, we really couldn't be sure. We thought we could wait it out. But what I'm proposing is that if we're continuing to wait and hope that things will just get back to normal right away, there's a high chance that we're going to make those—

Sorry, can I interrupt for one second? Would you mind? The video just got a bit choppy. Can you exit out and just dial back in and just see if that fixes it? Just got a little bit choppy. And we'll just pause this for about 30 seconds, if that's okay?

Sure. Okay. Okay, just exit completely?

Yeah, I would just exit out completely and then join back in as a panelist.

Okay.

Sorry everybody, just give us a second. I know there's a lot of people on Zoom these days, so not sure if it's on Zoom's end or on our end, but I saw that Kevin was just a little bit choppy there and I don't want you guys to miss anything during this presentation. So let's give it just a few seconds here. I see Kevin coming back in now.

Hey, Dylan, I joined, but I kept video off. Hopefully that'll improve the the data rate. Do you mind doing that trick where you share your screen and then I'll take over?

Yeah, sure, let's do that. Give me one second. I think you just took over. You're on now? Okay, great.

Great, great. So basically, the world has changed, and I think it's really— everyone's sinking in that it has. And those who are still waiting for things to get better and hoping, there's a high chance you're gonna end up like those ants that were in my previous picture. So those with a great sense of urgency and action, a bias for action to change, are those that will have the highest chance of surviving through this difficult time. So whenever I'm in a difficult situation at work, I like to try to learn from the past and try to find a situation that was similar. I think our most recent similar situations, one could look at the dot-com bubble of the 2000s or the subprime lending crisis from '07 to '09. And what we experienced there, there's a high likelihood that we're going to experience very similar issues. So just the, the things that we already know will be occurring, it has been occurring, is high unemployment rates. I think the latest numbers I read from yesterday was 26 million Americans had filed for unemployment insurance, a contraction of the economy. The latest numbers say that the In the first quarter, the US economy contracted by 4.8%. And we already know that there's going to be a long recovery. For both those recessions, they lasted between 8 to, I think, 6 to 18 months. And we're also going to be experiencing, when we think back to those other times, large economic imbalances. What I mean by that is some industries will bounce back quickly. Some companies will bounce back based on consumer demand, but there will be others that won't. And you're going to have industries where they're actually hurting for employees, trying to hire people back quickly, whereas other industries where, you know, their layoffs are going to continue. And I think with those imbalances, it just makes it difficult for everyone to ramp up. Some industries opening and some others not, it's going to be sending really confusing messages to the consumers. And it's definitely going to affect how people consume. This just came out. This wasn't originally part of my presentation, but this just came out in the last 2 days, and it shows just starkly when you compare what's happening right now, which is indicated at the end here, how similar it is to what happened in the last 2 big economic crises that we've had in the US and in the world, essentially. So here's some forward statements from myself and what I anticipate to happen. First and foremost, I believe that there's gonna be a concept, they might not use the same term as I do, but I believe people are gonna be starting to demand corona-proofing of supply chains and value chains. What I mean by that is whenever we're looking at a new supply chain process or starting a new business, someone around the table is gonna ask, "Well, is that Corona-proof?" And what they mean by that is how resilient is your model to the disruptions that we faced last time? And will it survive through a period of lockdown, essentially? The second thing that I believe will happen is that there will be, according to that Corona-proofing and that Val, the need for that, is there's gonna be a rise in hyperlocal supply chains and hyper-vertical supply chains, where basically the retailers are gonna try to insource or locally source, if not, probably not all of their goods, but they're gonna diversify their supply chain, trying to bring in more domestic goods to have a bit more resilience in terms of how they bring in the goods. I think that's gonna be a temporary effect. The pendulum will always swing. I think things will get expensive, and I think just the normal financial pressures will cause them to start to forget and start to devalue the Corona-proofing and then go back to globalized supply chain to help bring down the cost for their product. Third thing that I think is going to happen is there's going to be a swell of digitizing or digital-first supply chains. New retailers and new hybrid retail suppliers will be trying to go as lean as possible with little or no inventory, have dropshipping set up, highly integrated relationships with their suppliers and resellers, and making— and essentially doing away with bricks and mortar, or making— ensuring that bricks and mortar is not the pillar of their organization. I also think that we're gonna experience a general normalization of digital. What I mean by that is that the mom-and-pop cookie shop down the street is on Uber Eats. The stationery store is on delivery too. Everyone is gonna be on e-com. I don't think there's gonna be a question anymore. Everyone that was on the fence had to sit down and learn how to use it. I think everyone's over the hill on that one. So those are some of the trends that I see. So I was a Boy Scout in my past, so I picked a, analogy of surviving in the wilderness. This is really going to cover what I believe is necessary to survive this period of time. So the first step is mastering your attitude. I've already spoken to this a little bit before, but maintaining a positive, proactive attitude, deciding that it is time to act, is the first step to getting you closer to survival. Having a plan and sharing it with your team, it doesn't really have to be a perfect long-term strategic plan. It just has to be a response to what's happening right now. And then assess your— assess what you have. What are your tools that you have in front of you to help you to survive? Those may be your surpluses in inventory, resources and people, or special skill sets and best, you know, industry best that you have that lead you to have strengths that others don't, and how can you use those in new ways? Then it's really important to understand what is critical to survival? What are the tasks that are non-value-add to your business that won't get you through the next 6 to 18 months? And be relentless in getting rid of them. Developing a sense of grit and determination within yourself and your teams, reminding each other every day that it is a day at a time and that you will get through this, will do wonders in terms of motivating your team to continue. And keep them task-focused because it's no use worrying about something that they can't change, which is the global economic climate, but rather on achievable tasks related to your plan that you had developed. The next is building a shelter to weather the elements. And building off of the first one, making sure that you and your team are mentally prepared for what's ahead, for them to understand that it's a long ride and for them to be comfortable with every day. Examining your cash flow and your burn rate, wherever possible lowering it and disposing of nonessential portions of your operations. And I think this is a really important exercise, which is to understand your business sensitivity. Essentially, you know, how much more economic disruption could you bear before the pressures are too much for your business? And it could be the loss of another big customer or a percentage of your sales or disruption by either an economic factor or a natural disaster heading into the spring. So understanding that and making sure that you're not building yourself for only enough to survive the current state. It could get worse, and it might get worse, so making sure you have that resiliency for that. Next, when you're surviving, it's, it's really important for business and in survival to look for your sources of of water and food. And being very flexible about that because you don't have your normal sources anymore. I encourage both retailers and suppliers to look and pivot in terms of their revenue streams. There's an example coming out of the US of a company named iPromo who is one of the largest suppliers of convention and conference materials. Obviously that market dried up with the cancellation of large events, but they started speaking to their customers about what they actually needed right now, and it was, as you can imagine, masks, hand sanitizer, and other healthcare products, and they actually pivoted overnight and became iHealth. Started serving the needs of the customers right now. So that's gonna be really important to, to speak to your customers, not about just what they need from you based on what you supply, but what could they find for you leveraging your networks and your connections and your resources to help them source goods that they need right now? It could be related, it could be unrelated to what you sourced previously. In this picture here, I just have an example of a restaurant chain that's local to myself here, Earl's. They launched Earl's Grocery, the idea being that for the standard consumer, In addition to ordering takeout, why not get fresh produce from us? You're leveraging the underused supply chain of restaurant wholesale, grocery wholesale, which was hurting. And for the restaurant, they get a bit more business and the consumer gets to skip the lineup at the grocery store. I thought that was neat. I think a lot of grocery store— a lot of restaurants are doing that now. I think that's the type of thinking that we need. For all sorts of suppliers and retailers is combining values and bundling them to make it easier for people. In terms of finding new sources of food and water, there's been an explosion of interest in the bartering market. This is the— these are markets where you can actually indirectly or directly exchange goods and services. An example is someone a contractor had renovated a house, and as part of the payment for that home, he accepted credits on a bartering exchange, which actually were redeemable for contractor services, for electricians and contractors to help him build the next home. So, when money is short, there are bartering exchanges which can both connect you to resources and partners which you may not have expected. I have a link to the International Bartering Trade Association where you can find bartering exchanges. Usually they're more local because of the nature of a barter, and you can probably find one for your state or your province or wherever you're located. Next is being visible and giving and seeking aid. I think right now the last thing you wanna do is crawl up into a ball and hide within your own four walls of your home or in your business, trying to figure things out. Now's the time to reach out. And I recommend that there are three ways of reaching out with different benefits. So you might already be part of a trade organization, an alliance of suppliers, an alliance of retailers. That's great for getting best practices, but sometimes it's hard to partner with those retailers because you're both in the same part of this, segment of the supply chain. I actually recommend going vertical and trying to, with your existing trading partners, partner with, have a retailer, a supplier, raw materials, and work that way. You're going to find more innovative relationships with those vertical relationships because you're not all competing, competing for the same space and you don't all have the same strengths and skill sets. The other way is the third one which I think is really interesting, is lateral relationships, ones that you never expected or are unconventional or unique. And I have an example here of actually one here. This is from Thailand. There was a restaurant that was, you know, COVID closed down, a fitness gym, and an exporter of durian fruit, which is that spiky fruit that you see being held by those two gentlemen. They were just business acquaintances, and they actually decided to band together to solve each other's problems. So the fruit exporter was no longer allowed to export his fruits, the gym was closed down, and the restaurant obviously had no business as well. They decided to combine their strengths. So some of the, the, the owners and employees of the gym, they rebranded themselves as Buff Guy Durians. So These gentlemen are processing the durian in a restaurant facility and selling them domestically in Thailand. And so, they've got employment, they're using the restaurant facilities, and this exporter of durian now has a market domestically for his product. And I know that's a bit of a fun story, but I hope that it's encouraging and it's sticky in terms of how you can rethink your business to pivot and to survive right now. They've actually decided that they're going to keep this relationship even post-lockdown. Last thing is, Carmik, I believe it's vital to be supporting your local community even if it's not for business gain. Your employees, even if you've laid them off or furloughed, I feel it's vital to engage them and to see what you can do to continue supporting them because when you need them to come back, will they be willing to come back based on how they were treated or not treated during this tough time? Also, there may be relationships within your community that were unplanned that could lead to your own Durian Brothers story.

Kevin, I do want to interrupt one second and just mention to everybody that we do have a Q&A section. So, we'll be getting to that in a few minutes. And, you know, please put any of your questions in now. On that Q&A. I'll have a few questions for, for Kevin here shortly as well, but please ask any question you want right now. I'm truly fascinated by this presentation, so I just want to mention that while you're going through it.

Thank you, Kevin.

I'll hand it back to you.

No problem, Dylan. Thanks. And the last step in terms of survival— I remember this story. I was— we had a wilderness survival instructor once And I think as a young teenager, I challenged him about, well, you've built your shelter, you've got your food, you've set up your flares and your help signals. Do you just go take a nap then? What do you do? And he's— and the instructor said, absolutely not. Every moment that you are in the wilderness and stuck in a situation, you should be thinking of ways to improve your condition. And he said, well, you could be improving your shelter. You could be adding to the bed of insulation that's under your feet. You could be building a bigger help signal. Uh, you could be looking for better sources of food. And that stuck with me in terms of the complacency of, okay, well, I tried it, it didn't work, or work kind of, uh, won't really get you to the finish line. I do encourage everyone to continuously challenge yourself, even to re-examine if you've turned over every stone of how you can evolve your business and not end up like the ants from my first slide. This is a process which you can take if you have the time. It's a great opportunity. This was from, from Gartner. I love the exercise. I love these grid exercises. They're simple and they're powerful, but basically the advice is to take the intersection of, you know, what processes within your business failed during this crisis that just choked and were— you could feel all the pain, all the fires were there, and the intersection with what is critical to your recovery now. And if you overlap those two quadrants with your team and your business, you can come up with what are the processes that are the most strategic and urgent for you to be reinventing yourself and improving. And here in this particular slide, Gartner just suggests some things you, as in the mind of a retailer, you might want to be improving. So there you go, supplier audit. Did you as a supplier fail to meet the demands? You know, how are we forecasting? And I would argue it's not demand planning now, it's actually demand sensing that we really need. And then inventory management. So with that, I was just going to wrap up my slides and we can open it up for Q&A. These are just a summary of the skill sets that I think you'll need to survive. I won't read them all, but I'll just read the last line, which is, you know, if you survive— not everyone will, I hope you do— you will be tougher, you'll be more connected, you will always be a learner. And I think that will put you in the best position to thrive in whatever this new world will become. With that, in terms of paying it forward, um, I'm happy to speak to your organizations if you have any questions. Really no strings attached. I'm not looking to receive any payment at this point. I just want to help everyone survive. Feel free to write down my email or connect with me on LinkedIn. I'd love to chat about your business and see ways we can help everyone get through this together. And I'm going to turn it over to Dylan. Thank you.

Thanks, Kevin. If you want to take off the screen share there. Perfect. And let me just change my screen. That was awesome. I really, really appreciate that. You know, it's interesting because our first couple webinars were you know, how to respond immediately, how to get some emergency funds. So it was how to apply to the SBA loans, the PPP loans. And I think everybody now is kind of in this, you know, planning phase of like, okay, well, I've done all the emergency stuff I can do, you know, possibly, you know, furlough people or laid off people, unfortunately, apply for funds that I can. How do I plan for the future? And I think this addresses a lot of that, and I really appreciate you putting in the offer for an hour free consultation to anybody, which I can also acknowledge is no strings attached or anything like that. So really, really appreciate that. Of course, we're always happy to answer any questions too at SureFront as well. I think that some of the questions are coming in now and one question I know that everybody will have is about Corona-proofing. Value chains and how those affect maybe, you know, sending retail samples and also more importantly, how can you Corona-proof your business, you know, in— does that include making sure that you're locally sourced, that you're— that maybe you're cutting off from overseas suppliers or can you go a little bit more into how you would Corona-proof your business?

Yeah, we're seeing some very interesting things in industry right now. There's a local outdoor sporting wholesale brand called Deore headquartered out of Vancouver, and they're actually— they completely changed their business model. They used to be wholesale. They sent out their spring deliveries, and they actually pivoted into a direct-to-consumer model with basically a presale. So they partnered very closely with their suppliers, and they can go from concept to delivery within 6 to 8 weeks of performance clothing, essentially. So I think in terms of Corona-proof, I see a few different things happening. I think there's gonna be more pre-buy. I think the millennial generation below, there's a thing called "shoptivism," where they don't mind waiting if they know that the goods they're buying stand for, uh, like no waste or low waste and, uh, and are a sustainable business model, essentially. Um, I also see, uh, for suppliers, do you have factories in more than one country? If there's a disruption, another isolated infection, and a country goes into lockdown, are you a one-trick pony? And do you have resiliency in that front? Are you planning on building— you have a nearshore strategy to build some production capacity within the country in which you sell. If that's the US, then the US. And I think looking at all those things, and different clients and customers will have different requirements on you, but if you can become faster, have a shorter lifecycle in your design by partnering closer with your retailer partners and your suppliers, I think those are all the things that will help everyone become much more current. Own proof.

That makes sense. I appreciate that. And again, to everybody, you know, please ask any questions you have in the Q&A section. This is, this is the Q&A portion of everything. There, another question came in was, do you recommend supply chain mapping as part of the supplier audit? And how many levels down should this mapping go? For instance, I probably should know my supplier's suppliers, in an example, raw materials. but do companies need to go further down their supply chains? Great question.

I think that's very industry-specific, and why I say that is because there's a different tolerance of risk in each industry. And if your industry already has a tradition of deep-level supplier auditing, I would encourage you to do that. If you experience yourself, you know, if you do that quadrant exercise and you root cause that one of your failures was to do with an unsurfaced subsupplier, then I would certainly— and that was of impact enough to be flagged as critical. I certainly encourage you to prioritize some of those tracing activities as part of your business. I mean, obviously there's only so much resources you can allot to risk mitigation. So whatever is within your capabilities, I don't see any harm in that. As long as it doesn't become an academic exercise for your business and it is meaningful.

Got it. Makes sense. And if we're gonna become more of a dropship economy, how do you— how can people take advantage of that? So how can suppliers and sales reps take advantage of a dropship economy if stores are not holding inventory as much?

I think this speaks to what we have just long talked about is the the Amazon effect and other things. I think for suppliers right now, we're gonna see a continued emergence of direct-to-customer model. They're actually, suppliers are gonna be continually chomping at the bit of traditional bricks-and-mortar retailers for space. I don't think it's gonna be one or the other. I think it's gonna be an ecosystem where you have direct-to-customer suppliers and retailers. Frenemies coexisting, also supplying each other. But I believe that the more that right now for both suppliers and retailers they invest in how to get more direct-to-customer, probably learning with each other at the same time, shortening your delivery times, speeding up the, the prototyping cycles, I think the whole market will benefit from this new leanness, essentially. I think long gone are the days of in a vacuum thinking about a great new product, you know, ordering millions of them, then pouring millions into marketing, trying to sell them, then having millions left over and then marking them down and trying to get rid of them. I think those days are gone. The naivety of that, there's no longer space for that. I think the companies that stick to that, I mean, we'll see, it'll come out in the wash after this recession is over.

Interesting. Yet another aspect too is that, you know, a lot of people on this webinar right now are sales reps and suppliers, and they are used to being able to show their products in show— physical showrooms, which they can't do as much if they're going to corona-proof their business. I'll say from our own personal perspective and experience at SureFront that SureFront allows you to have an actual showroom, a virtual showroom that is corona-proof, that you can share with buyers and retailers. Any other recommendations that you would say for people that are used to having a physical showroom or physically showing their product, how they're going to Corona-proof? SureFront being one way to have a showroom there. Any other recommendations you might have?

I think virtual showrooms are great. I think it's going to trend more that way, and more and more businesses are going to be investigating the feasibility of virtual showrooms completely replacing certainly existing product lines and refreshes, and maybe less so very new goods. I think for suppliers, if your factories are located overseas, is there a way to have a prototype lab nearshore and benefit from that and speed up that cycle? Or vice versa, have some of your team embedded overseas, which I know companies do, so you can verify the first articles and the prototypes over there where it's happening. I think a hybrid of those strategies, virtual showrooming, having people where the goods are being made, compressing that supply chain, is really gonna help us with speed to market. And if we're doing presales, really compress that for the customer so that they're willing to buy something if they don't have to wait 3 months to get it.

Awesome. And I'll reiterate to everybody listening, you know, go to SureFront.com, click on the sign-up button on the top right, and you can start using this extended free trial that we have right now and have a virtual showroom today and be able to start sharing that with buyers. So take advantage of it, it's free for right now. Sign up and go ahead and use that so you can actually have a Corona-proof business now immediately. Let's see if we have any other questions. A couple people saying thank you very much for the presentation.

My pleasure.

And, um, okay, great. Yeah, I think that covers just about everything. A lot of people saying thank you, that was a great presentation, Kevin. I really appreciate it. And, uh, to everybody, we'll be sending a follow-up email, so I'll send Kevin's information in there. So, you know, please take advantage of that, take advantage of the, the free trial over at SureFront. We'll be having another webinar. We're going to be doing this every single week. So another webinar next Thursday at 11 AM Pacific. That's 2 PM on Eastern. So we'll send information about that. Sign up today, you know, immediately, because you have to register beforehand. So please, please do that. And most importantly, stay safe. We're doing all these webinars to try to help our sales reps and suppliers. So We're coming up with topics every week that we know are relevant to you guys. We're not going to be talking about something random that is not relevant. So if you have any suggestions as well, email me, Dylan, D-Y-L-A-N, at SureFront.com. I'm happy to create a webinar around any subjects that you guys are curious about if enough people ask. So please take advantage of that. Again, Kevin, amazing job. Thank you very, very much. I know that was very helpful to a lot of people out there, so that was great work. Thank you.

No problem. My, my pleasure. And everyone, let's continue the conversation. Please reach out, connect with me on LinkedIn. Um, and I'd love to, uh, talk about how we can all survive through this. Thank you, everyone.

Thank you.