First of all, how are you and your Family doing in these COVID-19 Times?
Michael DeSimone: Thankfully everyone is healthy and hanging in there, thank you.
Tell us about you, your career, how you founded or joined ShopKeep
Michael DeSimone: I joined ShopKeep almost five years ago – this is my second CEO role. Before that, I was CEO of a company called Borderfree, which went public in 2014 and then was sold to Pitney Bowes in 2015. I got connected to ShopKeep via a director who sat on both Boards of Directors. Prior to Borderfree, I held various roles in financial services and fintech businesses.
How does ShopKeep Innovate?
Michael DeSimone: ShopKeep’s mission is to empower independent businesses with technology and services that enable them to compete and win versus much larger chains. We continuously innovate around that key concept, specifically with ways to save them time, money, and help them connect more deeply with their customers and manage their businesses for success.
How the Coronavirus Pandemic affects your Business, and how are you coping?
Michael DeSimone: ShopKeep provides technology and services to small and medium-sized retailers and restaurants. As you would expect, the pandemic has had a dramatic impact on many of our customers – especially full-service restaurants. From our perspective, we have seen a drop off in inbound interest and lead volume from prospective customers, a decrease in our customers’ overall sales volumes, and an increase in the number of customers going out of business.
Thankfully these negative impacts have been moderated somewhat by the fact that half our customer base are retailers, many of whom are in “essential” industries like groceries, convenience, and hardware stores. While many of these businesses have seen a drop off due to the pandemic, they were not required to close their doors by regional restrictions, and have been able to maintain some level of normal business activity.
Since mid-May, we have seen a general trend of recovery off the lows of April. Having said that, the re-imposition of restrictions in certain geographies has a clear negative impact on our business. We expect the cycle of removal and re-imposition of restrictions to continue on a rolling basis until the health issues are resolved one way or another.
Did you have to make Difficult Choices, and what are the Lessons Learned?
Michael DeSimone: Yes – we had to make some staffing and other reductions in cost in response to the decrease in our business. I’m very pleased to say that we have been able to bring a fair number of people back from furlough as the business recovers, but unfortunately, we were not able to retain or rehire to pre-pandemic levels yet.
In terms of lessons, I think the biggest may be that working remotely works pretty well. We closed our offices about a week before New York State mandated closure of office spaces. Like most companies, at the time, we thought it would last a matter of weeks – perhaps a month at the outside. My assumption at the time was that we would lose productivity and engagement within a matter of weeks. We’ve found that so far is no loss in productivity – in fact, and we have seen gains in multiple areas of the business. In response to both the ongoing pandemic and a clear preference for having a remote working option from our team members, we are currently preparing to shift to a majority of our team working remotely permanently.
Who are your Competitors? And how do you plan to stay in the Game?
Michael DeSimone: Our biggest competitors are electronic cash registers! The white or beige ones that usually have vinyl covers over the keys and several post it notes with phone numbers stuck to the top and sides. Despite significant advances in technology, the vast majority of independent businesses have continued to rely on these simple devices to capture sales, take payment, and manage their day to day operations.
From our perspective, the pandemic changes all of that. Merchants have to be able to seamlessly shift between in-person and online ordering channels, accept payments from a distance, and offer a range of fulfillment options from in-store to curbside pickup, to home delivery. That’s impossible without a connected commerce platform like ShopKeep’s that can flex across all those channels, manage multiple fulfillment scenarios, and offer a complete range of no-touch payment options.
With that in mind, we are working very hard to ensure that our platform is designed to perform equally well across all of those scenarios, with a common user interface and integrated reporting offering a single “source of truth” for our merchants’ business.
Your Final Thoughts
Michael DeSimone: Ultimately it’s our view that the pandemic will accelerate many of the macro trends we’ve seen for the past 10-20 years: a shift to online ordering, multiple fulfillment scenarios (both direct and through partners like DoorDash), and accepting a range of electronic payment options in addition to, and increasingly replacing, in-person and cash.
Like most crises that come on suddenly, unfortunately, there will be businesses that cannot adapt or survive quickly enough and will fail as a result.
However, it’s our view that the vast majority will survive and emerge stronger and more resilient businesses, with more tools like ShopKeep at their disposal, and very well-positioned for success in a post COVID world.
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