Have you ever met the crises of such a scale before?
For 25 years COLLAR Company has survived five crises: in 1998, 2004, 2008, 2014 years and now. Turning back and analyzing what we did then I can say that we have always seen the crisis as a possibility appearing in dangerous and unstable situation. When the crisis came, we started to work several times faster. We have always searched for the point of fear, for the main risk, followed it and founded the growth point.
For example: in 2008, when the currency exchange rate shifted dramatically, we made a decision to choose a new way. Before that time COLLAR Company had worked in different directions: from importing different brands to distributing them and making our own. After the analysis we understood that we should develop our own manufacture and create our own products. We were afraid of that decision — the imported part was around 45% of our assortment. But we made it just before the beginning of the crisis. At first, we lost 40%, but the next year the income of COLLAR Company became 30% bigger. Now it was because of our own products. We created the “Innovations only” concept and it allowed us to develop much faster. The devaluation of local currency allowed the manufacturers to have a higher ground than importers.
During the 2014 crisis we decided to work more on exporting goods. We were afraid to lose the internal market because of lowering the average income of the customers. We were afraid to lose money, because opening the new market always means huge expenses: attending expos, opening new offices, marketing campaigns. But it was our way. Due to this decision we survived through crisis period. We got more foreign currency and grew our total income.
Which resources help COLLAR Company to cope with crisis?
The main pillar during the crisis is the team. The first thing a CEO should do is to bring together their team, possibly even turn on the “emergency mode” to urge employees to think outside the box and make non-standard decisions.
Our first fear was that leaving people work as they did before the crisis while our income is plummeting will bring us to catastrophe. So we chose another, more effective way. We revised the functions of each department and focused the staff on the tasks that were useful for COLLAR Company right here and now.
My personal talks to the employees and clear tasks have inspired people. The team mobilized and started to think differently. The employees took the responsibility they haven’t taken before and started to brainstorm their own anti-crisis ideas. For example, the learning department started the “COLLAR Help” project of counseling for the employees during the overwhelming anxiety. The corporate culture department initiated the competition in which the employees offered their own ideas of surviving the crisis. Not only CEO steps forward and takes the lead, but the staff also. The team is even more united and motivated now.
How does your Сompany adjusts to the crisis?
The first anti-crisis decision was taking non-standard orders to keep our personnel busy. In April, we made 200 000 of medical masks. That order helped Ukrainian hospitals and let us save the employees.
Another important step was an April launch of WAUDOG Design DC Comics dog accessories with a “Superheroes save the world” motto. COLLAR Company have signed a contract with Warner Bros. and became the first company on the market to produce pet accessories with Superman, Batman, Joker and other DC Comics characters. These products became loved and wanted in many countries all over the world, and WAUDOG Design DC Comics series skyrocketed.
Generally, our main answer to the crisis is a fast launch of the products. We have learned to do that in two or three days, while before it was up to six months. We have launched more than 200 product SKUs during the quarantine period.
How COLLAR Company helps its partners during the crisis?
The main problem for Ukrainian pet business was the possibility of pet shop closing. To prevent that COLLAR Company and other market operators united and started a “They want to eat, too!” campaign. The President of Ukraine and the government have received our urges to let pet industry work and pet shops, veterinary clinics and drug stores have been reopened, so the pet goods distributors and manufacturers continued working.
In addition to such major actions we concentrated on helping our clients directly. We offered them the flexible terms of partnership, launched the unique marketing offers and discounts, influencing their sales during the crisis period. We also launched the new WAUDOG accessories that generate interest of the customers in our clients’ shops.
The quality of communications has also changed. Each contact now starts from us asking how the client’s business is going. We also now put more attention to the personal speaking and support.
The COLLAR Company services have become even more client-oriented and grew in size. For example, we now make twice as much webinars for our clients, once in two weeks. We discuss different topics that are useful now: the work of a pet store during the quarantine, online presence and so on.
For 1,5 months of the quarantine we have launched twenty times more marketing offers for our clients than usually.
How the quarantine impacted the process of design and manufacturing?
The main concept of COLLAR Company is development of the innovative products. Our product start here from the very idea and concept and go up to the point of launching them to the market. This principle is difficult to apply but much more efficient and strategically important. That’s why we made a decision not to slow down the work of our department of development, but to make it faster instead. For month and a half we have launched several times more products than in any other time, more than 200 SKUs. We created the anti-crisis products for the local market — stylish printed masks, hand sanitizers and protective screens for pet shop workers and veterinarians. The new releases were implemented in a lightning-fast pace: two-three days instead of half of a year. It shows the speed we react to the market challenges.
We have revised our manufacturing plans. The main fear and risk was to invest into the new products, in their creation and promotion. We have chosen the category that demands minimum or no investment. The raw materials could be found in the country or bought with a postponed payment. We have found a solution for every issue met during the quarantine.
Do you have your personal example of inspirational solutions?
I do. It shows very well how to fall a thousand times and rise a thousand times and one time more. Ten years ago we had a dream to build a stadium for our native city. We had neither money nor the experience, but we understood the importance of it. For the last forty years there was not a single new sport object in Chernihiv.
For five years me and my brother have travelled the world. We saw more than a hundred stadiums. We just came, knocked and said: “Hi, we’re from Ukraine, we want to build a stadium. Could you please tell how to do that and show us yours?” We were surprised, but people opened the doors and showed us everything. We chose the small stadiums, similar to the concept we dreamt of and met the full understanding.
We persuaded the city to give us land. The stadium project was outstanding: there was nothing similar in Ukraine that time. In 2017, we have finished the first building and realized that it was the only (except the central one) stadium in Chernihiv region with lights, showers and a full-sized field. After a year we opened a sport school for kids, now it has more than 160 students. Our third dream is a professional football team, and we have already sent documents to register it.
It doesn’t matter if you have money, experience, knowledge and team. The main things to have are the dream, the goal and the desire to make it come true.
What is your personal approach to coping with crisis?
In COLLAR Company there are three simple steps for me personally:
The first one is to answer the question: “Do I really want it?” I have to make the priorities for myself. It works both in business and in life. The next step is the question: “What is the biggest fear between me and my goal?” You define that point that needs your attention the most. The third step is to make a first move towards your fear. When you make it everything becomes clearer and you start seeing the possibilities.
I also read a lot, adapting the book ideas to our Company and implementing them. I’d recommend “The Goal” by Eliyahu M. Goldratt for anyone who is a manufacturer.
What lessons may pet business learn from COVID-19 crisis?
The first and main lesson is to be ready to react on the market changes fast. The demand may change instantly, so one needs to be ready to launch the new products the people need fast.
The manufacturers have to be flexible and make decisions taking into consideration the interests of their clients. The crisis on the market is crisis for everyone: manufacturers, distributors and pet shop owners.
In general the crisis has shown that the pet shops are important for the society, as much as grocery stores. We need to understand this and always be ready to produce and deliver our goods fully and in time. To achieve this the company needs to have well-regulated processes: from the raw materials supply to end product logistics and do its best to save the team and the key employees. The crisis will end, sooner or later, and the companies that managed to save the motivated and gathered team will grow the fastest.
COLLAR Company works in premium segment, the constant innovations are also a defining trait of that market. How do you plan your further development? Will you consider manufacturing the economy segment goods?
COLLAR Company makes products for the whole market. Let’s take dog accessories for example:
- The economy segment are TM Dog Extreme and Collar trademarks.
- The middle segment are TM WAUDOG Classic, Eco, Nylon, Waterproof.
- The premium segment are TM WAUDOG Soft, Design and EVOLUTOR. The toys, aquaristic products and wooden cat litter have similar grades.
We always try to create the optimal price/quality ratio. Of course, we understand that the market is changing and will work on lowering the product prices, but only if it is possible without losing the quality and functionality.
How will your market segment change because of the coronavirus crisis?
I think that the pet product market will continue moving towards pet humanization. These are the products that show and strengthen the emotional bond between pet and parent. The unique accessories, custom collar designs that are appealing for humans, Family look and so on. The market will move from mass production to personalized products and working with individual preferences.
I’m glad to hear that the quantity of adopted homeless pets has increased dramatically during the quarantine period in Britain and the USA. The people want to be happier and caring about their pets gives them that happiness. The pet products market gladly helps them.
Interview with founder and CEO COLLAR Company Yuriy Sinitsa for https://zooinform.ru/business/