The world agrees: we are living through challenging times as we take on coronavirus and the impact of COVID-19.
Every day, restrictions are being put in place that will save lives but also irreversibly disrupt businesses both large and small. It is already having a dramatic impact on various industry segments and individuals.
Small and midsize businesses (SMBs) and entrepreneurs are facing significant pressure on their cash flow as they deal with the downturn in economic activity.
So, how do you continue to keep selling and helping your clients during this period? Well, it’s times like this where sales experts can turn to the old adage: “necessity is the mother of invention.”
In this article we are sharing an analysis of how different eCommerce and restaurants are impacted by COVID-19 and how financial service providers could help these industries adjust and pivot their strategies going forward.
eCommerce Sectors Impacted in the UK
We have analyzed the web traffic, PR, job postings and additional signals for different eCommerce sectors between February 19 and March 20 2020 across the United Kingdom.
The results provide an eye-opening view of consumer behavior during the COVID-19 outbreak and present important insights for commercial teams to potentially redirect their sales strategy.
As we can expect, there are industries in the Coronavirus era that can easily benefit from the world pivoting online and staying indoors.
As we can see, the sales of medical and cleaning supplies have seen a predictable rise.
This can be attributed to the fact that more people are aware of the germs in their homes and prioritising staying healthy during the pandemic.
Fitness has also seen an incline, due to more people having to exercise in their homes instead of gyms or public spaces, such as parks.
- Food takeaway: food delivery businesses including Hello Fresh, Deliveroo, Uber Eats have seen an increase in demand, but not as high as healthy food. As we can see, supermarkets have seen an increase of 52% in web traffic. Consumers are likely thinking about saving money on food and groceries by planning more long-term meal prep instead of more expensive one-off deliveries.
- Computers and electronic equipment: the shift to working remotely has driven a nationwide shopping spree for home office products, including computers and other electronic goods.
Industries Not Impacted
Some industries have remained relatively static during the changing time.
While people may not be buying furniture in large quantities, we can assume that they are purchasing office chairs or cushions to help make their new work from home more comfortable.
Online gambling has seen a slight decline, which may be due to people losing their jobs and having less expendable income than previous months.
- Alcohol: with the drop in large scale social gatherings and events, eCommerce dedicated to selling exclusively alcohol is seeing a modest decline. It is unclear how alcohol consumption is affected via online grocery purchases, and so overall the change in web traffic has been deemed ‘not impacted’.
- Toys: this is one to watch. While it is currently seeing a small decrease in demand, this segment has risen following an initial drop of 18%. This is likely because parents are looking for ways to entertain children who are stuck at home all summer.
Industries Most Impacted
Here, we can see some of the industries most devastated by the Coronavirus outbreak and how their businesses have suffered in the last few months.
People aren’t buying any new clothing, since no one can go anywhere. The industry taking the biggest hit has been travel.
Hobbies, such as gyms or recreational activities have taken a hit, but this doesn’t consider the potential of how a pivot to online can encourage different behavior from participants.
- Fashion: is seeing mixed results. Leisure attire is seeing an increase in demand, while party attire is seeing over 78% drop.
- Hospitality: Not only have hotels and restaurants seen a sharp decline, but landlords who frequently sublet apartments on platforms like AirBnb have seen a drop in demand. We can expect them to start offering midterm/long term rentals to make up for losses.
Food and Hospitality Sectors Impacted in the UK
The industry that focuses on Food and Drink can only be as successful as the physical restaurants that can remain open during the lockdowns across the country.
As discussed above, fewer people are ordering one-off food deliveries and instead have pivoted to more investment into groceries and cooking from home. As consumers adapt their spending habits, we need to consider how restaurants must do the same.
- 42% of UK restaurants have closed during the lockdown, forcing people out of any work at all.
- 33% of restaurants are open for online/phone orders, which might keep the lights on but will still need to make adjustments to worker schedules.
- 25% of restaurants might be open, but it is unclear due to their current online behavior and activity.
Despite the change in trends, SMBs are feeling the need to adjust their strategies to include new services, such as future investments via gift cards and ‘assembly-like’ deliveries. As they pivot their strategies, now might be the perfect time for them to assess their payment strategies and seek a new deal.
To find out how to target these companies and maximise your sales impact, click here >>>
Implications and Tips to Financial Service Providers looking to support their customers
We’ve addressed the many ways that B2C companies and services have been impacted by coronavirus, but how are B2B businesses adjusting their sales strategies? Financial service providers are some of the biggest players expected to pivot accordingly, so where shall we focus our sales strategies?
Merchant Services and Payments
Priority segments to focus on: Food establishments (restaurants, pubs etc….) that lack a takeaway menu and don’t take debit/credit cards online and eCommerce sectors that are not impacted or mildly impacted
Segments to avoid: eCommerce sectors that are “positively” impacted, as listed above. It is unlikely that they will be switching their payments provider in the middle of such a business boom. If it ain’t broke, don’t fix it – at least right away.
Tips: Help food establishments move to accept cards online and continue trading and support eCommerce businesses that have been impacted by reducing their cost and their decline rates.
Priority segments to focus on: eCommerce businesses and their supply chain that are noticing major spikes in demand now and technology companies whose employees can continue to work from home, i.e. computer and electronics.
Segments to avoid: At the time of writing, most insurers have confirmed that business interruption coverage does not cover interruption caused by COVID-19. Therefore, businesses that have been impacted and won’t be looking to purchase new or additional coverage.
Tips: start to focus on cyber insurance, asset protection including data, building, content, and stock insurance. or tech companies whose employees are continuing to work from home, the modern workplace is evolving rapidly. Physical restrictions and lockdowns have forced to divide work teams, adapt business models, and adopt additional technology to support remote work, such as telecommunication apps like Zoom. As a result, complex security questions are being considered businesses will look to review their cybersecurity insurance policies.
Business Loan brokers and alternative lenders
Priority segments to focus on: SMBs that rely on foot traffic and can continue supplying their services online (cafes, restaurants, pubs, retail, psychologists, fitness classes, pawn shops), business service companies.
Tips: Wherever possible, offer invoice financing or cash advance – loans that are repaid as a percent of income. This way, if a solid business sees a temporary drop in revenue, it won’t have very high monthly payments which it can’t service.
Summary (Here’s What To Do Next)
Even during these challenging times, B2B businesses can still find ways to sell and support their customers along the process. Commercial teams still need to meet quotas, and this means that marketing resources are mobilizing their messaging to current market forces and trends.
The key is simple: make sure you are equipped with the right information for both those who are data-driven organisations and for others who want to be. This way, your sales team will be able to understand where to focus your efforts for maximum impact.
Don’t fall behind your competitors – it’s time to adjust your strategy to stop surviving and start thriving.