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Friday 8th May

What we cover this week: at-home Stoicism, the supply chain of an organic tampon and what reopening looks like in Berlin.

How to turn a pharmacy contactless 

A pharmacy in Genoa, Italy, is using contactless lockers to get medicine to socially distancing customers. In just two days, Farmacia Serra’s owners, Edoardo Schenardi and Maddalena Leale, drew up plans to repurpose an existing phone-charging and luggage kiosk, finding a manufacturer in Lake Como to make the modifications. Three days later, ‘Giorgio’, as the Amazon Locker-style device is called, was up and running outside the store. Customers can place orders via WhatsApp or email and collect their items from one of Giorgio’s 13 lockers as soon as five minutes later. Payment is taken via Paypal, Satispay or Giorgio’s inbuilt POS system, whilst less tech-savvy customers can pay with cash inside the pharmacy. Serra is the first of Italy’s 19,000 pharmacies to test such a system – and the timing has paid off. A week after Giorgio’s installation, the law changed to allow prescriptions to be issued digitally, streamlining the collection process and allowing a wider number of items to be distributed via the kiosk. By anticipating this change, Serra has not only maintained sales, but increased them. Just over 100 products per day are distributed via Giorgio, accounting for 20% of the pharmacy’s takings. Overall, sales are up 10% – making Giorgio’s €800 monthly rental fee well worth it.

How businesses around the world are adapting and evolving.

Vilnius
. Event organiser ShowArt has organised a series of drive-in musical concerts at a disused airstrip, featuring some of the country’s biggest names and broadcast by local radio.

Kobe. With many onsens now shut in Japan, the Arima Sanso Gosho Bessho onsen has found a solution: make it virtual. Viewers with headsets can watch 20 minute videos with the sound of running water, falling cherry blossom petals and the sound of the breeze in bamboo.

California. DTC drinks brand Haus is working with restaurants to co-create apéritifs – all of the profits go to helping the restaurants survive. Meanwhile, these illustrators have designed fun, downloadable recipes from New York restaurants – with a donation function – in a bid to support the restaurants' employees.

Japan. Japanese company CleanseEX has begun using surplus fish-shaped soy sauce containers – normally packed in bento boxes – for antibacterial hand sanitiser.

Zurich. Luxury hotel Le Bijou has set up luxury ‘quarantine apartments’ for socially-distanced solo guests with services including a personal chef, a private gym, spa treatments and... coronavirus testing.

Shanghai. Furniture brands might be manufacturing again, but reopening showrooms is another matter. Danish furniture brand Gubi has teamed up with Chinese lifestyle firm Beast to launch Gubi House in Shanghai – following government health and safety protocols and open by appointment only.

Copenhagen. Made out of recycled cardboard and assembled in minutes, Danish furniture startup Stykka has launched the StaytheF***Home desk.

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‘About 400,000 of our tampons are still stuck in Poland’

Leah Remfry-Peploe, Co-founder of Ohne
London

Ohne is a direct-to-consumer organic tampon brand that’s seen a big spike in sales in recent weeks – but also some supply chain and packaging problems.

We hear that Ohne’s sales in March were huge...
Sales have been at an absolute all-time high, but it's come with hurdles. It's a tough one – you never want to moan about strong sales, especially during this time. We had an initial spike when people were stockpiling tampons. All of a sudden people were scared they were going to get multiple periods through their cycle. We were getting customers emailing us, asking if we were going to run out, and we were like, ‘No, we’ve still got you.’

So your suppliers could cope with the demand?
Yes. The main stores were selling out, but our product is organic, biodegradable and natural, and you typically can’t find organic tampons in supermarkets. E-commerce companies selling organic, whether they're using the same manufacturers or not, might see slight spikes, but not enough to mean the manufacturer is going to run into trouble. That being said, shipping has been a nightmare...

What happened?
We had a huge shipment arrive two weeks ago, all these boxes with our name and logo. We opened them up to see millions – I'm not exaggerating – millions of cotton buds. Zero tampons. Turns out our products went from Spain to Austria to Poland. About 400,000 of our tampons are still stuck in Poland, so we had to do an emergency order.

Have you experienced any packaging delays?
We’d normally have a three to four week lead time with our European manufacturer, which is super speedy. It means we can close last minute orders and keep cash flow strong. But it went up to eight or nine weeks, so we had to go with a manufacturer in China. But shipping prices from China right now are through the roof. Once you account for shipping, our packaging costs are double what they normally are.

Are you spending loads of money on Instagram ads?
We are, but only because social paid ads are really cheap at the moment. CPMs are super low, so it's a great time to push. Inevitably those will start rising again in the coming months.

Have you changed anything else structurally in the company?
We work on a subscription model and our payback period is about three months, but we want to get gross margin positive, which means we’re changing everything we do in terms of pricing and our offering. That’s a big shift for us – it’s meant we need more in-house resources. We're hiring for a designer; a marketing lead, because I do all the marketing at the moment; and a finance analyst, because we’re scaling super quickly.

Have the economics of subscription services changed?
A lot of the economics fundamentally don't work – booming subscription startups are backed with such heavy amounts of capital, and yet some smaller subscription companies are thriving and doing incredible things without having such vast capital. It’s typically the payback period is so long – you need the capital to scale. The idea – and this is what we’re doing – is making sure you’re aiming for profitability; you’re not aiming just to scale and exit.

Are you guys actively raising money?
We were raising a significantly larger amount just before Covid hit, but we scaled back with a smaller bridge amount which we're closing now. I'm not going to lie – even the bridge round has been hard. There are a lot of angels who committed who are still there but their check sizes are smaller. I’ve just come off the back of a board meeting, in which there was serious debate – is this survival mode or a time for scaling up? And what's the next round going to look like? The uncertainty is definitely nerve-wracking.

To hear the full conversation, tune in to this episode of the Courier Daily.

Want to generate more revenue? Stock Courier (for free).

For our upcoming June/July issue, we're offering new stockists a free trial of Courier magazine. If your shop, cafe or restaurant is planning to reopen, we'll send you 10 free copies of Courier to sell – with 100% of the revenue yours to keep.

Drop us a line at hello@couriermedia.co with your business name, delivery address and phone number and we'll do the rest. Think of it as a small gesture from us to help you get back on your feet and a risk-free way of seeing if selling Courier could be good for your business. The deadline to place your order is Friday 15th May.

Practising Stoicism at home: Stretching back to the 3rd century BC, the philosophy of Stoicism continues to hold widespread appeal. Massimo Pigliucci, author of How to Be A Stoic, outlines four simple exercises to adopt.

1. The New York Times has created these interactive charts, which show whether it's safer to visit a coffee shop or a gym as society begins to reopen. Plus, they explore barbershops operating 'on the sly'.

2. Merch Aid – founded by a team from digital agency R/GA – has brought together artists and designers to create exclusive merchandise for small businesses, with all profits going back to the business. Check out this collaboration supporting one of our favourite New York stockists, Casa Magazines.

3. 'Distance Disco', anyone?

What Berlin's rush to reopen means for small businesses

On 22nd March, Germany officially went into lockdown. By now, we all know too well what this means: citizens told to stay indoors, non-essential businesses forced to close and pretty much everyone adapting and evolving to keep themselves afloat.

There have been silver linings, but overall the economic picture for many businesses has been pretty dismal. So when the German government announced on 20th April that small businesses – those under 800 square meters – could reopen, the initial response was positive. Business as usual – what’s not to like?

And yet as florists, bike shops, design stores and lots of other small businesses gradually started to reopen, a different picture has emerged.

For Aleksandra Koslowska, founder of the Berlin concept store No Wódka, creating a dynamic customer experience while still upholding the new guidelines has been challenging. Throughout Germany, only one customer is allowed per 20 square metres and they must keep 1.5 metres away from each other at all times. Employees and customers must also wear masks. Since founding her Polish fashion, art and design store in 2014, Aleksandra says, ‘It’s always been important for me to allow people to touch and interact with the products’. Having to police her customers feels unnatural, she says, and wearing a mask provides another barrier to communication.

Aleksandra considers herself lucky that sales didn’t dip during the time her store was closed, thanks to her website. ‘I noticed that customers’ [purchasing] choices changed during this time. For example, blanket sales went up, as people are working from home and sitting on the couch.’ As a result, Aleksandra has adapted her product range to suit people’s change in lifestyle.

Since reopening, No Wódka has had queues out the door, but with the economic future still looking uncertain for many people, Aleksandra isn’t confident that demand will last. Many other businesses are also concerned that the new measures will continue to slice their profit margins, with fewer customers allowed in-store at a time. In the rush to reopen, government guidelines have been hazy, leaving some business owners unsure how to proceed.

The owners of Berlin’s Albatross Bakery, for example, quickly took matters into their own hands even before the lockdown came into effect. They closed off the seating area in their cafe, sent home staff that were feeling unwell on fully-paid sick leave, and implemented a thorough hygiene regimen. Albatross was also quick to adapt its business model. After the wholesale side of the business dropped by 90% – slashing 45% of total revenue – the company teamed up with other local food and drink businesses to create an online marketplace and delivery service, called Archipel. ‘We already had a wholesale logistics system that we could remodel, but other businesses haven’t been as fortunate,’ says Anders Alkaersig, one of the bakery’s three founders.

But under the new regulations, food establishments are still unable to reopen indoor seating for customers. ‘We won’t feel comfortable opening up our cafe for people to sit before concerts, festivals and football matches start up again,’ says Anders. Aware that there isn’t going to be a moment when everything ‘suddenly goes back to normal’, he adds, the bakery will press on with the delivery service. ‘Our business model going forward will be adaptive. Realistically, we have to react to the changing times.’

The glasses brand specs.berlin returned to its normal opening hours two weeks ago and is using the new reopening rules to explore a new business opportunity: to try and create a luxury experience for its customers. ‘We can only service two customers at a time and we ask people to book by appointment,’ says founder Claas Witzel. ‘The outcome of this couldn’t be better: customers have said how much they enjoy having more time dedicated to them.’

Having fewer customers hasn’t been good for the company’s bottom line so far, but for Claas, the real tragedy is not having all his team back at work. ‘I’ll only be really happy when I’ve got all my employees back full-time,’ he says. However, since the government is intent on keeping the number of people in-store to a minimum, it looks like that won’t be for a while. While businesses in Berlin are tiptoeing their way back to normality, there’s a long way to go yet.

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Illustrators: Yosuke Yamauchi | Giulia Sagramola | R Fresson

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