COVID-19 has forced many businesses to pivot for survival. However, various scenarios can prompt an urgent rethink of products, services, processes and operations.

While the risks of expanding an online business into a physical presence are fairly well-known, retail expert and mentor Lisa Powell, of consultancy Amblique, says that businesses pivoting the other way often underestimate what it takes to be successful online.

“Going online is a multitude of factors: It exposes data problems, supply chain problems, process problems. In a lot of ways, it is exposing your systems to your customers,” she says.

Powell says there is a lot more to online success than simply investing in a website that is easy to navigate and update.

“Especially when moving online, this is just the beginning – building it and putting product online is the easy part. They do often think it’s build and forget. But trading with it is what takes the time and effort.”

She urges businesses pivoting towards ecommerce to carefully integrate their systems and technologies, to save considerable time, cost and customer complaints down the track.

“The power is from integrating systems so that everything is automated. There’s a whole lot of systemisation that has to happen,” Powell explains.

She says those holistic businesses – those that treat the whole operation as one connected entity as opposed to composed of separate departments – tend to do best.

“They have a well thought-out, well-placed store network supported by a very robust, up-to-date ecommerce offering, which is integrated into that store network.

“They tend to have invested in, and understand the need to keep investing in, their technology and their people.”

Rethinking your vertical

Well before the pandemic set businesses across the country looking for new markets, Steve Fanale, founder of My Business Awards 2019 Business of the Year Drive Yello, found his main market shut off very abruptly.

“Originally, Drive Yello was very focused on food delivery – this was prior to Uber Eats and Deliveroo entering Australia,” he says.

At the time, he explains, Menulog didn’t have a delivery component, so his start-up became their delivery arm. And he had big plans to leverage the partnership for future growth.

“But Just Eat, which owns them, decided they would set up their own courier network. That left us relatively high and dry.”

It was a do-or-die moment for Drive Yello, with restaurant delivery accounting for roughly 70% of its business at the time.

Pivoting to diversify

But rather than go head-to-head with its former partner, Drive Yello reinvented itself to expand into last-mile deliveries for other verticals.

The pivot paid off: Drive Yello secured a partnership with Woolworths for its grocery and liquor divisions, and has diversified into pharmaceuticals, electronics and general retailing.

But Fanale admits that branching out from their established area of expertise was a risk. There were substantial regulatory requirements surrounding alcohol and pharmaceuticals to be met, as well as the delivery needs unique to each sector. There was also some resistance internally and with some investors.

Nevertheless, Fanale believes that diversifying was the best thing Drive Yello ever did.

“Being flexible means we can grow and diversify.

“If I had my time again, I’d probably focus on a particular function in our platform and spread that across multiple industries earlier, whereas what we initially tried to do was get deeper into a single vertical.”

Consider the long game

Whether a pivot will be successful depends in large part on its purpose, according to Powell.

“There are some really good examples of how businesses have pivoted during COVID.

“Some have pivoted for temporary survival; others have brought forward things they were going to do anyway. Some may end up with separate businesses,” she says, citing those that shifted towards making medical supplies and office furniture for those working remotely during lockdowns.

But key to this is having a plan about how the pivot fits into your longer-term business plan.

“How do you pivot in, but also how do you pivot out – and do you pivot out? There’s no one right way for everybody.”