What are the Trends in Business? The New Paradigm?
In the last two months, the world has changed. And with it, business has also changed in ways that are likely to be with us permanently. It is time to think about what the future is likely to bring to start preparing our businesses for the new reality.
With bricks and mortar business being impacted by forced closures and social distancing, there has been a rapid move towards remote systems and in particular to online meetings and web stores for both retail and wholesale businesses.
The experience of the last few months has shown us that businesses and consumers are still buying, but that the nature of purchasing has changed. One of our clients, for example, has had a huge increase in the sales of high-end women’s shoes and is now shipping them worldwide. They have closed 100 shops but moved to on-line shopping channels with subsequent growth in revenue. Reports are coming in that show growth in many areas. eBay and Amazon both report that their sales have been very strong throughout the pandemic but that the nature of sales has changed.
Why is this?
Firstly, “retail therapy” is an entrenched habit within much of our society, so with a loss of other entertainment options, people have reverted to more online shopping. Plus, with the plethora of information about the pandemic, people are wanting to be prepared for what is coming – and in many cases, they are overpreparing via purchasing. And also, there has been a massive impact from seeing others buying and seeing empty shelves; this has brought about a certain amount of panic buying as people are fearful that they will miss out and have stocked up to feel safer.
What areas have been successful in the last few months that are likely to continue?
Sales have been increasing in areas such as: skincare, underwear, casual clothes, jigsaws and games, home fitness systems, educational resources, many home DIY products like bread makers and stills and brewing kits, home office supplies, gardening accessories and supplies, white goods, gaming consoles and so on. Long term, there is likely to be a resurgence in suburbia with an increased appreciation of the space provided in the houses and the outdoor areas, so there would be increased demand for outdoor furniture, BBQs, pool and gardening supplies as well as the standard household supplies.
Changes in patterns of spending
The following chart is from a USA site from the period of the COVID-19 that shows interesting changes in patterns of spending.
But this growth in the last few months has come mainly from businesses that have tapped into online shopping and make use of SEO and marketing to raise consumer awareness. The change to online shopping has been with us for a long time but, has now forced more people to adopt it. It is likely to have changed shopping habits permanently. So, for current and future success in your business, you need to follow the same rules – invest in your website, make sure it is easy to use, engage in social media, pay for SEO work and marketing. If you are selling product or bundled services, make sure that you have a shopping cart and an easy online payment system. While consumer confidence is down, provide special offers to encourage buyers and keep additional charges to a minimum so that orders aren’t abandoned in shopping carts.
Resurgence of manufacturing in Australia
It is extremely likely that there will be a resurgence of manufacturing in Australia. The COVID-19 pandemic has taught us that our reliance on overseas manufacturing (and long delivery delays) is a major security risk to our country, and while it is unlikely that we will return to tariff protection, it is likely that there will be more government assistance via grants to manufacturers setting up in Australia, with all the benefits to ancillary businesses. Now could be the time to start planning manufacturing for “the other side”. The areas that are tipped to be successful are food manufacturing, pharmaceuticals, medical equipment, essential supplies (think of all the gaps in the shelves to know what these are). Government will be more inclined to give contracts to local producers rather than overseas suppliers so office supplies might also be an area of growth.
Get help with setting up your online shopping solutions
If you need help with setting up your online shopping solutions (retail or wholesale) or warehousing and manufacturing solutions, these are the areas that 2 Peas specialise in. We can recommend, implement, train and support you on the right systems for your business. Contact us on 1300 896 732 for a free chat about your requirements and how we can help you.