In less than a month, coronavirus (COVID-19) has transformed from a local issue to a global one.
Only weeks ago, global economic institutions and players including the banks and top analysts looked to China, and in particular, to the city of Wuhan with sympathy few of them imagined the virus would soon spread to the heart of Europe.
When the virus began taking hold in the UK, The Bank of England’s Mark Carney thought policy easing would be enough to counteract the shockwaves permeating The London Stock Exchange. While his efforts produced some short term recovery, the economic fallout continues to rise along with the numbers of infected and dead, meaning Carney’s prediction of a return to ‘business as usual’ will not happen anytime soon.
With global supply chains continuing to experience log jams, employees encouraged to work from home, and restaurants, shops and supermarket shelves emptying by the day, coronavirus could trigger another momentous global recession.
Retail at a glance
Already facing an uncertain economic future due to Brexit and changing consumer habits, coronavirus could be the final blow for many businesses in the retail sector.
However, if they are selling the right products, have the appropriate delivery technology in place, and are able to keep up communication with customers during this vital time, it doesn’t have to be.
In particular, coronavirus is having a negative impact on sales for bricks-and-mortar retail and hospitality businesses.
With the virus encouraging consumers to remain at home, sales of quality food purchases as well as health and luxury items are rising while the leisure and tourism industry is suffering a hit from declining hotel, holiday and travel bookings.
Sports equipment ?” 28% decrease
Travel’sites” 20% decrease ?
Hotel?bookings 8% decrease
Healthcare items 27% increase
Online grocery shopping 20% increase
Adult (luxury) items” 35% increase
What the above statistics prove is that coronavirus is influencing the purchasing preferences of customers, inspiring a (perhaps temporary) change in spending habits towards personal health, nutrition and luxury products and entertainment over outdoor experiences.
The first unsurprising fact is that consumers are increasingly purchasing protective items including masks and gloves and sanitary products such as hand sanitiser.
As the virus spreads, businesses offering products that will help consumers fight off infection are likely to continue to experience good sales. Recent statistics uncovered by software company, Coupa (February 2020) found that sales of “personal protective equipment” rose by 76% while sales of “sanitising equipment” rose by 32% compared to the same time last year.
‘At home’ experiences are selling
As consumers look for ways to amuse themselves indoors, many think subscription giants such as Netflix and grocery delivery services like Amazon Fresh will be the businesses that will profit most from this period. However, smaller businesses providing home-based friendly products and services can also benefit from these shifting consumer preferences.
One example is?Yodomo, a company that is seeing an “uplift” in customers buying their postal friendly skills-building experiences such as their weaving and bread making kits. Yodomo’s recent trading success is an example of the perks of tapping into the rising consumer need for feeling stimulated and maintaining good mental health while they may be self-isolating due to the virus.
Other ‘home-based’ luxury items selling well include lingerie and sex toys, according to research penned by?Contentsquare.
Their findings also reveal a large surge in “premium online grocery purchases” over the last two weeks, including rising numbers of visits to supermarket and food delivery websites.
At the other end of the scale, bricks-and-mortar retailers are being affected by a decreased footfall in public spaces as people stay home due to the virus. However, they can employ tactics to ensure the economic fallout isn’t terminal.
Bricks-and-mortar businesses and outdoor experiences
Contentsquare’s”findings show online consumer spending to be up, meaning bricks-and-mortar retailers with e-commerce sites can pursue a business-as-usual approach by responding to the additional spike in e-commerce purchasing caused by concerns around the dangers of in-store shopping.
For businesses that can only offer an ‘in-person’ experience, such as football clubs and restaurants, Mike Fantis, vice president of digital marketing agency, DAC UK says they should improve their customer communications and share relevant content to keep up interest in their businesses if they are forced to close temporarily:
“For businesses that solely rely on footfall like gyms, health clubs, restaurants, car dealerships, retailers selling high ticket items they are obviously likely to see a severe disruption and reduced footfall. During this time, they have an opportunity to add value to their customers through good and relevant communication whilst closed.
“An example would be restaurants offering recipes and challenge customers to try and replicate their dishes and share the content” Great user-generated content keeps the dialogue open, giving brand presence and content during a closed period.”