Weathering the Covid-19 storm: which sectors are thriving?
First we had the panic-induced run on hand gel, pasta and loo roll, followed swiftly by the scramble to secure a regular supermarket delivery slot. As the new normal set in, we’ve been tackling the books and DIY jobs we’ve been putting off, while bicycle sales are apparently soaring.
It goes to show how in the space of a few weeks, our habits, priorities, preferences and expectations have been transformed. At the same time, certain trends that were there already have been accelerated. So which sectors are especially well placed to respond to this changing landscape? Here’s a closer look…
Beauty retail and “little luxuries”
Logic might suggest that in times of uncertainty, the market for luxuries takes a massive hit. And certainly, for lots of reasons, not many of us are likely to be booking around-the-world cruises anytime soon. But where does this leave life’s little luxuries?
Research pre-dating Covid-19 suggests that the so-called ‘lipstick effect’ is a real thing. This is the phenomenon whereby in times of uncertainty, small-ticket luxury items see a sales upsurge as people look for ways to improve wellbeing and boost their mood.
L’Oreal announced that its first quarter sales in China had increased 6.4% year-on-year, despite the country being on lockdown for most of that period. In the UK, the evidence points to consumers turning to online retailers for self-care and home-based treatments, with online stores seeing a 111% boost to the number of transactions since the start of the crisis. Even with so many of us confined to our homes, this suggests that the lipstick effect is coming into play.
While traditional gyms and fitness clubs have been left reeling by the Covid restrictions, home exercise is booming. Shares in the leading digital fitness brand, Peloton have increased by more than a third since the start of the outbreak. People are not just buying the kit, but are also signing up to virtual fitness sessions in ever greater numbers.
Linked to this, one of the many upsides of fewer cars on the road is that cycling is much more appealing. The UK’s bike shops have been allowed to stay open during the lockdown, and many have been seeing a level of sales “only usually seen around Christmas”.
The desire to avoid the Tube or bus is probably also at play here. Across Europe, new cycle lanes are a key part of the strategy to get people back to work, while helping reduce public transport overcrowding. Commuter bike specialist, Brompton has reported particularly strong demand, suggesting that cycling’s boost in popularity is much more than just a fitness fad.
Media consumption and education
Unsurprisingly, we are all consuming more media since the lockdown. The biggest changes in behaviour include news coverage consumption (up 36% worldwide), along with time spent on social media (up 21%).
Streaming service providers have been among the biggest winners in all of this. For instance, Netflix says it added 16 million new accounts in the first quarter, and its share price has climbed by more than 30% this year. Although it was planned way in advance of the outbreak, the timing of the launch of Disney’s new streaming service was perfect: right when the world was in need of lots more family-friendly content.
With more than a billion children affected by school closures, the streaming of educational content has also seen a big increase. Figures from The World Economic Forum show that this sector was on a sharp upward slope even before the outbreak. The value of the education technology (edtech) sector was expected to increase from around US$19 billion to $350 bn between 2019 and 2025.
Covid-19 has triggered an unexpected surge in edtech adoption. Even when schools and colleges get back to normal, it is likely that many institutions will retain at least some newly-adopted elements of online learning as part of their model.
For many businesses, adapting to new ways of working has been a process of trial and error. It has also meant having to update their IT toolkit, especially when it comes to collaboration.
Between 11 March and 18 March, the number of daily users of Microsoft Teams increased from 32 million to 44 million. Slack and Zoom have also seen big jumps in both usage rates and sign-ups.
For teams that found themselves working from home for the first time, it has been a case offinding their way around various collaboration suites, often by taking advantage of free trial packages.
This is fine if all you need is a quick video call between team members at the start of the day. But as working from home continues, businesses are almost certainly going to need more from their software, such as uncapped video calltime, scope for larger numbers of call participants and stronger integration with other business systems. When these needs arise, organisations are much more likely to opt for premium packages: good news for the software providers.
Do you need help in updating your tech stack to reflect new ways of working? Are you looking for technical support in repositioning your business to meet changing customer demands? Speak to Millennium Consulting today.
Life after Coronavirus, longer term impact on global trends, business and your wider world
Watch the keynote speech - 'Life after Coronavirus, longer term impact on global trends, business and your wider world' presented live at The Millennium Consulting Unit4 Financials Global Virtual Conference.
Presented by Patrick Dixon - Europe's leading futurist.