“The COVID-19 Crisis brought an unprecedented challenge in our 30 years in the retail industry,” quipped Senheng Founder and Managing Director, Mr Lim Kim Heng. “Its impact is at least 5 times worser than any economy crisis we’ve faced, but we managed to keep calm in the face of crisis, and planned counter measures to mitigate the financial repercussions from the early stages,” He added proudly.
The results?
How about a five-fold increase in online sales revenue during the first month of the MCO?
Impressive.
Here, we shall share with you the 26 secret strategies that Senheng used as counter measures against the COVID-19 Crisis:
Secret #1: Seamless
Senheng launched its Seamless concept in 2017, an online to offline retail experience that allows customers to shop across various channels whenever and however they choose. The market responded positively. Revenues immediately grew 6% in the first year and swelled to 26% in 2018.
Secret #2: Telemarketing
Converting its Customer Service Unit into a telemarketing call-centre focusing on receiving inbound and making outbound calls. This switch alone brought in a daily revenue of RM20-30k per day.
Secret #3: Customer Loyalty Program
Senheng’s Customer Loyalty Program centralizes on the idea of providing added value to customers in a fair manner, effectively eliminating the practice of price negotiation at the store. Most importantly, this allows them to have 2.6 Million customers’ data at their fingertips.
Secret #4: Staff Conversion
Using big data, Senheng converted 1900 of their retail and supporting staff into telemarketers with highly targeted matching of customers to telemarketers.
Secret #5: Mobile Apps
Senheng rolled out its own mobile app in 2016. By encouraging all of its members to use the app, Senheng saved more than RM1mil in printing and mailing expenses by going fully digital and paperless.
Secret #6: Voucher Redemptions
From big data, Senheng found out that there were 25,000 members that had cash vouchers worth RM200 that were not redeemed. Senheng’s telemarketers reminded members to redeem their birthday vouchers and to use their PlusOne points and EZ Credit Rebates to redeem products, and this spurred buying interest from the prospects.
Secret #7: Inventory Management
Senheng used artificial intelligence (AI) and business intelligence (BI) analytics to manage their inventory and stock replenishment according to actual demand without affecting its operations.
Secret #8: Activate e-Training
Together with SH Retail Academy (SHRA), Senheng did not reduce any investment into upskilling and training by going into full e-Training.
Secret #9: Rent Renegotiation
Senheng renegotiated its stores’ rental with landlords to a 30-50% reduction throughout a year-long period.
Secret #10: Stretch Credit Period
To improve cash flow, Senheng negotiated its credit period with its suppliers to an extra 30 days from March to September 2020.
Secret #11: Overdraft Facility
Use overdraft facilities provided by banks to pay for expenses during MCO.
Secret #12: Bonds and Refinancing
Senheng obtained much needed capital by issuing callable bonds and refinancing its assets to pay for rents payable, manufacturer’s invoices and staff payroll.
Secret #13: Virtual Meeting
All meetings to be conducted in web conference virtually unless necessary.
Secret #14: HR Digitalization
Digital HR system enable all Senheng staffs to work from home while maintaining their respective KPIs.
Secret #15: Sell the Future
Senheng sold cash vouchers worth RM100 for half the price that consumers could redeem at a future date. They sold out 764 vouchers on a single day.
Secret #16: Increase Digital Budget
By increasing budget spent in digital channels, Senheng manage to increase their sales via Senheng and senQ’s online store and Lazada to RM50-60k/day from RM10k/day last year.
Secret #17: Corporate Social Responsibility
Senheng received requests for sponsorship of air-conditioners from 12 hospitals, and successfully obtained travel permits to transport the air-conditioners from the authorities.
Secret #18: Last-mile Delivery
Senheng’s participation in CSR initiatives enabled them to obtain the relevant permit to fulfil last-mile delivery that was previously halted due to the MCO.
Secret #19: Merging Departments
Senheng merged its retail sales unit with the telemarketing unit, which enabled its retail sales staff to use the downtime to perform telemarketing activities, improving work efficiency in the process.
Secret #20: Telemarketing App
Senheng launched a Telemarketing App within a short period of time to support and track telemarketing performance.
Secret #21: iPET Launch
Senheng’s subsidiary company, iPET Technology Sdn Bhd (iPET), the first Pets Social eCommerce platform that equipped with features like AI technology & big data analysis. Going digital helped saved cost such as rental and warehousing.
Secret #22: Develop New Products
Senheng used the analogy; ”selling tour packages to the moon” to describe this approach, where they believe that anything can be sold.
Secret #23: Staff Assurance
Senheng assured all staff that they will not have to worry about being forced to take unpaid leaves and salary reduction during this period of hardship.
Secret #24: Lean & Mean
Senheng adopted a lean and mean management approach to its finances, slowed its expansion plans, and scaled down on unnecessary expenses.
Secret #25: Strategic Partnerships
Senheng formed win-win partnerships with its business partners P1 Citi, P1 Lazada, Aeon Credit Express, AIG Rebate and MBB Free Admin fees to leverage on their customer base.
Secret #26: Marketing
Formulate effective marketing activities to engage with customers and encourage participation.
So, there you go! All the 26 secret strategies used by Senheng compiled for you.
Lastly, to sum up, here’s a summary of what we can learn from Senheng’s experience:
- The online cake can be bigger
- Data is king
- Digitalization allows us to become more flexible
- New business channel established – Telemarketing
- New products – Sell the future
- Past engagement with our “Lovers” is simply insufficient
- E-training is a must
- Lightweight lean business model
- National Agenda – Drive digital transformation with all Malaysians SMEs
