On March 13th 2020 the German government closed all businesses for an unspecified time, in response to the coronavirus pandemic. We caught up with Claudia Beauchamp, MD of digital marketing agency Konavi, to talk about efforts to improve digital readiness among the companies that make up the Mittelstand in Germany, the companies driving 37% of German export.
Konavi was recently involved in a hackathon focused on helping businesses to move online to survive COVID-19. Can you tell me a bit more about this?
This particular hackathon brought together businesses that were largely or completely offline before the pandemic, and people who could help them to move online. It was hosted by the City of Munich together with TU Munich and sponsors (City of Munich, Cisco, Google, FC Bayern München, Microsoft, eBay, Salesforce and the University of Munich Centre for Entrepreneurship). Companies outlined their business, marketing and social media problems, and were matched with digital marketing experts working pro bono. The virtual event lasted 24 hours and involved 100 businesses and 300 specialists (coders, designers, web engineers, marketing specialists, copy writers, graphic artists, programmers and experts in commercial online law).
What was your particular part in the event?
My team was matched with a physiotherapist. German health regulators have relaxed professional guidelines and digital delivery is now permitted by the statutory health insurers. Systems have been set up to enable GPs to prescribe telemedicine treatments, but it has all been very fast. COVID-19 has been a real catalyst for change in German healthcare, especially the infrastructure. This physio didn’t need convincing to go online, but she had no idea where to begin and how to ‘cross the chasm’. She now has her first three virtual sessions, which will help her keep her business alive and provide a limited income stream for the time being.
What challenges did hackathon participants face?
The major challenge was simply survival: cash flow, stock, and workforce. Some businesses, such as florists and restaurants, had perishable stock that they needed to either sell or dispose of very quickly. The second element was the digital challenge. Many owners had never envisaged their business moving into the online world. Germany has a thriving exhibitions market and strong retail channel.
Many hackathon attendees were successful, traditional retailers whose footfall vaporised overnight. Kinderzimmer, for example, is a 50-year-old family-owned, single-outlet retailer in central Munich. It supplies premium quality children’s furniture, games, toys and clothing. It has a loyal, affluent customer base seeking a high quality, high price, high value, upscale instore experience—until everything changed overnight.
What did hackathon participants focus on and how?
Most of these businesses needed an online shop—and fast. For example, with the physiotherapist, we began by looking at her unique selling point and supporting backstory for the website. We discussed the functionality required for the website, which platform to use, and how she might maintain it herself in the future. One surprising challenge was convincing the group of the importance of keeping content topical and fresh, and investing in product photography, descriptions, online e-commerce packages, and online payment methods. Businesses needed to be reminded to invest in their online ‘premises’, and make them comfortable and safe for customers. They had to think about driving virtual ‘footfall’ into their shops. This requires a combination of advertising and promotions (on- and offline) that suit existing and target customers. These businesses are on a giant learning curve and it is very hard for them.
What do you advise hackathon participants to keep in mind in the future?
I would suggest three main points. First, keep it fresh. Keep renewing and adding to your content. Add more and more things to bring people back, try to generate more noise and opportunities to touch customers. Set some budget aside to nurture your digital presence. Second, stay true to your brand. When you visit a physical shop, you’re in the retailer’s world. The ambience, staff, layout, even the smell, and music reflect and reinforce the brand. Traditional retailers have found the transition online particularly difficult. They have had to try to develop a look, feel, and online tone that still communicates their values and sense of place. Finally, small can be beautiful. You can succeed online with a small budget. However, you need to create some assets, define the value you want to offer and commit to investing. You also need to understand that success online is not instant, and it’s not cost-free.
This hackathon served to demonstrate that many participants had neglected digital presence. But as Shakespeare once wrote “strong reasons make strong actions” and the need to build or rebuild their digital footprint in both business and communications terms was undeniable. Ironically it is inevitable these brands, if they maintain the impetus behind these initiatives, will engage with more customers overall, generate more business from existing customers and grow loyalty and engagement with these customers.