Michael has a degree in international business and currently works for a global e-commerce company.
Toiling Through Tough Times
Consumer priorities have changed dramatically in the wake of the pandemic whose full global economic impact is still unfolding. Businesses all across the spectrum, from gyms, restaurants, and salons to cruises and airlines, have been hard hit or have ceased operations altogether.
Despite the chaos, however, some sectors have become tremendously successful. In fact, they have flourished to such an extent that at certain points they have not been able to cope with demand, and countless businesses have been reinventing themselves to serve in these fields. These thriving sectors include the following.
1. Biking equipment and maintenance
2. Web-based services
3. Delivery and logistics
4. Personal protective equipment (PPE)
5. Health and sanitation
6. Hobbies and entertainment
7. Retail and wholesale
1. Biking Equipment and Maintenance
With the rise of the pandemic, millions picked up biking not only as a regular hobby but as their means of commuting. It provided the benefits of a proper cardio workout while affording the least contact with others compared to other alternatives like public transport. Cycling has been seen as a way of reducing tension and anxiety, improving mental health while obtaining much needed fresh air without putting others in danger.
For households faced with the urgent need to simplify their lives and massively reduce expenditure, biking also provided a cheap and convenient means for getting about without having to worry about parking, gasoline, or being stuck in traffic. At the same time, public transportation systems had become inoperative in many places.
As a result, reports showed that bike sales increased by 75% and 63% in April and June 2020, compared to the previous year. The specific categories that caused the dramatic spike were, sales of cheap leisure bikes and mountain bikes which grew by 203% and 150% respectively. During a broadcast, one bike store actually reported that they had cleared a year’s worth of stock in 30 days!
Coupled with the sales of the actual bikes, there was also an incredible rise in a corresponding demand for repairs and maintenance work, plus the sale of parts and accessories. Fresh customers multiplied as people began bringing in their old bikes for refurbishing and the net result was a flood of business that bike shops found themselves unable to keep up with. Stocks were running out at unprecedented rates and replenishing them was not going to be possible for months. As they waited for supply lines to reopen, these businesses began focusing more on servicing and tune-ups.
As an alternative to biking, Peloton which makes workout products like exercise bikes and treadmills, reported a 66% increase in revenue and a 30% increase in app membership within a quarter. Massive numbers globally were also tuning into online workout and fitness programs, while the sale of fitness equipment and accessories kept growing.
2. Web-based Services
Online platforms for connecting people such as Zoom, Whatsapp, Viber, Slack, and Skype have seen a massive increase in the use of their audio, text, and videoconferencing features. Understandably, there was a global spike in demand for technology that enabled people to work from home. Zoom emerged as one of the biggest winners in this space and by February 2020, its shares had risen by 50%.
It is not just that millions turned to cyberspace, for many, especially the hospitalized or quarantined, there was hardly another option to link up with loved ones. At the same time, telemedicine companies like Amwell reported more than a fivefold increase in the use of their interfaces over a period of a few months.
As academic institutions shut down, what followed was a spike in e-learning as multitudes turned to online courses to either further their education or add new portfolio skills as they sought to replace jobs they had lost. Even business owners were using these online alternatives to improve themselves in order to reinvent their existing businesses or to venture into more profitable sectors altogether. Virtual learning opportunities were on demand.
Millions of businesses had to turn online during the pandemic in order to survive. Those that were already established saw a major boom in sales, customer acquisition and retention. In Brazil, e-commerce growth reached 230% in just 4 months. In an interview, Zoë Póvoa, the founder of Ozilo, stated that her e-commerce company which specializes in women's fashion, had grown by over 300%. In Australia, Omar Sabré, the cofounder of Maison de Sabre reported that his company was able to realize 65% growth in a few months when they turned fully to online marketing.
3. Delivery and Logistics
As the lockdown progressed, many households found themselves unable to afford rent. As educational institutions shut down, students were forced to move back in with their parents. One report showed that 39% of millennials were either planning to or had already moved back to live with their parents.
Many of those who found themselves deprived of their jobs and other means of income had no choice but to relocate from the cities and towns. Others did so because they had already been evicted from their properties due to rental arrears. All this created a boom for moving companies. Things got to the point where many found themselves literally handing over their house keys to these companies to take over the entire process from start to finish.
Aside from the lockdowns, the rising death tolls made people averse to venturing outdoors. Self-isolation made populations increasingly dependent on delivery services to receive and dispatch products. Companies like Amazon were still hiring thousands of workers as the pandemic continued. Consumers who could no longer visit business premises such as restaurants and salons due to the lockdown had to rely on home deliveries. One company in South Korea reported that they were used to driving with their trucks half full, but now it was impossible for them to pack all the orders that were flooding in.
Startup companies like Flytrex and DroneDeploy which specialize in commercial deliveries and agricultural scanning of fields respectively, saw a boost in their profits due to the pandemic. Governments and other bodies turned to drone companies as a means of ensuring critical supplies were delivered and affected areas disinfected, while avoiding human contact.
4. Personal Protective Equipment (PPE)
The idea of going to a hospital and sitting together with coughers in waiting rooms was not so appealing. Medical institutions were already very congested and the staff had their hands full. So when people got injured or unwell, they started to increasingly turn to mobile health service providers.
At the same time, there was a demand for platforms that connected patients with medical practitioners for consultations and diagnoses, as well as other members of the community. There was a surge of new members signing up daily for the use of remote services.
When it comes to personal protective equipment (PPE), the crowding of customers at supply centers could only be curtailed through strict social distancing rules. Sellers of fabrics and other materials used to create face masks were experiencing a massive boom. Some family-owned fabric businesses found themselves not only supplying the local population, but also other bodies including the government and medical organizations.
One such business, Fabric Hut in Norfolk sold $100,000 worth of fabric in a week! The orders rose to 400 a day and then skyrocketed to 2,000 orders daily. It was impossible to cope with the soaring demand and they found themselves having to shut down regular supply in order to tackle the backlog. Many people who could knit or sew at home were purchasing these materials to make masks for themselves, their family members, and even people in the shelters and nursing homes.
Wayfair shares appreciated by over 1,056%.and the company which had never registered a net profit since 2014 was now reporting a net income of $273.9 million. Overstock, another previously struggling retail company, more than doubled its sales and tripled its number of customers. Its shares rose by a whopping 2,354%.
5. Health and Sanitation
Those who worked in the cleaning and sanitation industry also experienced a major surge due to the pandemic. According to research conducted by Nielsen, aerosol disinfectant sales rose by 230.5% while the sale of multipurpose cleaners increased by 109.1% between March and April, compared to the previous year. As people stockpiled on sanitizers, disinfectants, and other products, Clorox shares started to rise by 50%. In a week, their sales had risen by 15% and total sales in the first quarter by 32%. There was a significant increase in product sales for companies like Dettol as well.
Disinfection services grew in demand as new sanitation contracts were signed with governments and other bodies. The emergency also triggered the need for more workers in this sector. MaidPro, a residential cleaning business was soon having to deep clean hundreds of homes daily. They became so booked out, they had to create fresh waiting lists for customers. Men In Kilts, another business dedicated to windows and exterior cleaning of houses, also experienced a similar surge in demand.
The pandemic also triggered heightening alertness and sensitivity to personal health and wellbeing, leading to a new demand for supplements as a way of boosting the immune system. Self-isolation also meant that individuals needed to rely on themselves when it came to improving themselves in other ways too.
Amy Errett, the founder and CEO of Madison Reed stated in a televised interview that their DIY hair coloring offer saw a twelvefold increase in sales during the pandemic. The kits could be purchased online and customers could then work on their own hair at home rather than heading off to the salon. Many customers actually realized that they had been practically been wasting their time and money depending on salons for what they could have successfully managed by themselves in the comfort and privacy of their own homes.
6. Hobbies and Entertainment
Compared to the previous year, the sale of flour in the US went up by 116% whereas the sale of yeast increased by 182%. These products were rapidly disappearing from supermarket shelves, so local bakeries jumped in to get a piece of the action. They turned themselves into supply outlets by purchasing flour wholesale and selling it to consumers raw. The demand reached a point where a single customer was buying a 50-pound sack of flour (almost 23 kilos)!
The rise in demand for baking products was rational. The kitchen practice can be a therapeutic distraction for households under lockdown while at the same time helping with the easing of the financial pressure.
Before the onset of the pandemic, Lauren Bland had used her skills to bake primarily for family and friends. It was a nice little hobby. When the global crisis hit, she put her skills to work and created Baking for Better, an initiative focused on raising money to aid the NHS with PPE equipment. It took her 10 days to raise £500, after which she saw the opportunity the spike presented. From that point, her business grew so exponentially that she had to convert her kitchen into a bakery.
Aside from multimedia streaming services and gaming, the toy and entertainment sectors also witnessed major growth. According to Hasbro CEO Brian Goldner, the toy company realized 50% increase in sales in the third quarter. There was also significant demand for board games and other home-based activities as communities slipped into lockdown. Aside from Monopoly, there was another game released in 2008 which also became a favorite during this time. Incidentally, it is called Pandemic.
The ongoing crisis created the need and opportunity for people to change their habits and also discover new and better ways of doing things, including home storage and organization. Businesses that were focused on decorating and optimizing living spaces were able to profit tremendously. Potted plants were also flying off the shelves so much so that one owner reported that their business had quadrupled.
7. Retail and Wholesale
The fear of shortages triggered a panic that brought waves of consumers into shopping outlets. Both online and offline, the retail sector was thriving. So many job vacancies were opening up that candidates did not even need to show up with resumes. All they needed to have was vested interest and they were hired as soon as they came through. One store manager stated that whereas they were used to having a daily maximum of 8 online orders, they now had to cope with 40, in conjunction with their brick and mortar business.
As would be expected, increasing numbers of people were going for home furniture. Retailers in this space began to see tremendous growth. In a short time, Wayfair shares appreciated by over 1,056% and the company, which had never registered a net profit since 2014, was now reporting a net income of $273.9 million. Overstock, another previously struggling retail company, more than doubled its sales and tripled its number of customers. Its shares rose by a whopping 2,354%. Businesses operating in this space also experienced a significant rise in customer retention.
With the closure of restaurants and other food outlets, people began getting used to cooking at home. As more consumers became increasingly health-conscious, farmers' markets and agricultural outlets began to thrive and started reporting up to a threefold increase in sales.
The boom was in almost everything, from seeds that could be planted in the backyard to subscription services for milk deliveries. The fact that these products were organic and that farmers typically followed safety guidelines even before the crisis hit was all the more appealing to the masses whose sensitivity to healthy choices had been reawakened.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
Michael Duncan (author) from Germany on February 27, 2021:
Yes indeed, there has been a degree of irony; according to mainstream reports, China is the only major economy that has registered economic growth since the onset of the crisis. Hopefully with the ongoing interventions there will be recovery for businesses that have been negatively impacted.
Liz Westwood from UK on February 14, 2021:
You are right to highlight the positives in this article. There are definitely businesses that have thrived. I just feel sorry for those that have struggled or gone under. The irony that the masks I bought had been made in China was not lost on me.