ACCESS to a vehicle to provide deliveries or mobile services could be key for the future success of many SMEs post-lockdown, a new study reveals.
The study of 750 SMEs conducted by Avis Vans found that a quarter of SMEs (25%) introduced a delivery option or mobile service to diversify their offering during lockdown, in order to stay afloat when physical premises were forced to close from Monday 23 March.
Of those who set up home delivery or mobile services during lockdown, almost half (49%) are now looking to continue operating in this way, even after lockdown restrictions end, due to the success, popularity and continued demand for direct-to-home services across the UK.
SMEs that previously offered delivery and mobile services are now looking at their commercial fleets to ensure they are adequately equipped to maintain their supply chain and continue to reach customers. Over a third (37%) of these are considering investing in a commercial vehicle, including investment into rental solutions.
The research found more than two fifths of beauty salons (42%), over a third of restaurants (37%) and retailers (34%) pivoted their business model during lockdown to include home deliveries or a mobile service offering.
Furthermore, over a quarter of health providers (26%) and entertainment businesses (25%) also introduced similar changes, with nearly two fifths (39%) of hotels adapting to provide food deliveries, general supplies and other items during lockdown.
As we emerge from lockdown, almost nine in 10 (87%) UK SME decision makers said their business has had to adapt in order to compete under the new post-lockdown regulations, which includes changes to physical operations and logistics, the introduction of social distancing measures and use of PPE for employees.
Nina Bell, Managing Director, UK & Scandinavia, Avis Budget Group said: “Lockdown challenged every business. It has forced many to adapt their offering to remain relevant while complying to the restrictions and regulations.
“As lockdown restrictions ease across the UK, smaller businesses are now reassessing how they operate with many choosing to sustain new services trialled during the pandemic. Consequently, we are seeing the rise of convenience as more of us become accustomed to a more personalised at-home offering.
“The flexibility rental provides, compliments the challenges SMEs face, allowing business owners to shift and shape their fleet in line with business demand. Rental, whether short, mid or long term provides the ideal mobility solution for those looking for commercial vehicles without the ties of lengthy contractual terms, large upfront payments or maintenance fees.
“Our vans provide customers with a diverse range of vehicles and bespoke customisation such as customer branding, dedicated van centres supported by our wider national network and fleet management – we are ready to help businesses get back on the road to growth.”
Despite the efforts for SMEs to adapt, the long-term effects of the pandemic on smaller businesses will be longer reaching. Almost a third (31%) of businesses said they were ‘extremely’ affected by Covid-19 and 38% have been forced to reduce staff numbers or cut salaries as a result.
Looking ahead, almost a quarter (24%) will seek to reduce business rent or building costs by moving to other premises or working solely from home, a fifth (21%) will scale back on advertising and promotions while 12% will look at leasing equipment and vehicles rather than purchasing outright
Creating a personal connection
Before Covid-19, Mulata Cuisine was a popular street-food retailer serving authentic Colombian food in several locations across London. After a few successful years building up his customer base, Patricio Mercado, Mulata Cuisine’s co-owner, was planning on opening his first restaurant but Covid-19 put his plans on hold.
After watching other countries shut down, Mercado was aware of the disruption the pandemic would have on his business and he began looking at ways to keep it afloat if the UK introduced similar measures.
He launched a home delivery service across South West London and the surrounding areas, using his car as the delivery vehicle. The service was so successful that he had to extend his delivery to reach a larger catchment area. As we emerge from lockdown, Mercado and his wife plan to continue their home delivery service, alongside the opening of their new restaurant.
He said: “We were really worried for our business when we started seeing the impact of Covid-19 across the world, and we quickly realised that we would have to adapt in order to survive. Fortunately, we have a loyal customer base and after thinking about how we could make it work, we quickly set up home deliveries and it’s been a huge success.
“Because we deliver everything ourselves, it means we’ve created even stronger bonds with our customers during lockdown and it’s opened new doors for us as a business. As we hopefully continue to expand our home delivery services, we’ll have to assess the best way to grow, which may include a short-term lease or rental to help reduce capital expenditure.”