Covid Lessons Learned: Trends That Will Endure for Franchises
Adapting to the change the pandemic brought has positioned many franchises for success in 2021 and beyond.
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The keyword for franchisees that weathered the pandemic during 2020 was adaptability. In an economic and social climate that crippled many small businesses, others were able to survive by being creative and acutely responsive to customer needs. As many franchises look to a "new" normal for 2021, trends like enhanced customer service are here to stay. Other trends sure to continue beyond the pandemic are increased virtual communication and amplified digital technologies — not just for use with customers but with staff, franchisors, contractors and suppliers.
Consumers have always craved convenience. Online shopping was already hugely popular, but until now, many shoppers had been hesitant to get on board with some types of technological interactions like apps. Not to mention there were some people who had never even considered the idea of someone else picking out their groceries. Personal shopping seemed to many like a luxury. Social distancing and "contactless" business transactions, such as curbside, drive-thru and delivery services changed modes of doing business. Today, many consumers have come to not only trust these methods but to expect them. It's not just a stopgap — it will be a way for many businesses to be more sustainable, streamlined, and competitive in the future.
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Customers front and center
Going above and beyond to accommodate customer needs has been the hallmark of many franchises that have soldiered through. Though expanding a customer base is often a priority goal in business, in tough times it is wise to keep a focus on the loyalty of existing customers. Many successful franchises have kept that strategy front and center. After all, research has shown that it costs five times more to attract a new customer than to keep an existing one.
With customer health in the balance, building trust with customers regarding safety has never been more important. From here on out, businesses will have to continue sanitation and prevention steps that sustain a high level of customer confidence. Protecting employees will also be key to keeping staff comfortable and business running smoothly. One Jimmy John's franchisee met the challenges with creativity and compassion, prioritizing his employees' well-being while making sure the public was aware of the stores' existing "hospital clean" policy.
Related: 3 Ways to Build a Sustainable Business Post-Covid, According to Jon Taffer
Teleworking has been the biggest change in doing business for many companies. Though it obviously won't work for every kind of business, it is expected to continue to be popular among both executives and employees where it is practical. Many workers have proven they can be as or even more productive in remote settings. In ways that are mostly positive, workers have adapted to a Zoom mentality. Some franchises will be able to benefit from this trend by saving money on office space and business travel.
To accommodate necessary remote interactions, many franchises upgraded their technology in ways that will have lasting and wide-ranging benefits, from virtual modes of training to access of new levels of transparency within supply chains. Franchises of the home improvement type have been able to have successful online consultations with potential new customers. One plumbing franchise is even using virtual technology to diagnose problems and walk customers through their own home repairs.
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Changing for the better
It's unclear whether the following trend will hold, but modifying menus was one way that restaurants provided improved services. In the case of McDonald's, for example, scaling down menus has driven increased sales, and has also sped up drive-thru service significantly. Many McDonald's franchises had wanted to slim down menus even before the pandemic, but there was internal skepticism about its value. Some now hope the proof of performance will support permanent changes.
For new businesses, intense scrutiny of the marketplace is more crucial than ever. Some types of enterprises are traditionally more cast-iron than others. It's perhaps not surprising that convenience stores, hardware stores, pizza delivery, and fast-food franchises have remained very profitable. But it was less predictable at the beginning of 2020 how certain other types of businesses would grow to meet new, now pressing, needs. Learning and tutoring companies, cleaning and restoration services and signage businesses, for example, have thrived in the pandemic and positioned themselves as essential businesses, according to the U.S. Chamber of Commerce.
In spite of challenges in the market, several trends are coalescing to create what some experts say is a very favorable environment for entrepreneurs looking to buy or expand franchises. Mark Siebert, CEO of iFranchise, says high unemployment, increased availability of skilled labor, easy access to capital and historically low mortgage rates could set 2021 up to be the best year ever for franchise sales.
Trends inevitably change, but the features that have always made franchising an attractive business option remain steadfast. The feature of franchising that defined 2020 was adaptability, a characteristic that will aid franchisors and franchisees alike as we move past this upheaval.