Over the past 2 months we’ve been looking at order trends across key industries to better understand which industries have been adversely impacted by the Covid-19 pandemic, which have seen growth week-on-week and where the opportunities lie for small companies looking to pivot and innovate.
This week we are taking a macro approach by comparing year on year for the first few months of the year using average order size for the different industries as our metric.
Please click on the category of your choice below to see the order trend data comparing 2020 to 2019.
While monitoring trends on a weekly basis is useful in that it helps you reactively improve your strategy, looking at year-on-year trends is helpful in that it shows you sustained peaks and troughs across months. It can also demonstrate that even though week on week growth may not seem stable, over a sustained period of time, the overall trend may be upward and may be significantly more positive than the previous year.
For small businesses looking to make business continuity decisions, execute efficiencies and plan out what the rest of the year looks like, this macro view is useful.
All dressed up with nowhere to go was the slogan back in much of March for Fashion, Clothing and Accessories in 2020. Order volumes were up until early March, and by the later part of the month a strong increase in order volumes was again seen, and they are continuing to fly.
From the order volume increase we can hypothesize an increase in consumers capitalizing on online sales during that period as many clothing retailers pushed to close the gap created by the closing of their physical stores. Specifically the lounge and sports wear sectors saw an increase in sales with more people adapting their wardrobes for work-from-home and workout-at-home lifestyles.
One small business that is helping in the fight against Covid-19 as well as redefining fashion statements is slow-fashion, size-inclusive label K.S. Garner. The Phoenix-based brand sells made-to-order products in an attempt to reduce waste and ensure a custom fit for everyone.
Designer Kelsey Garner has created face masks from fun fabrics featuring butterflies, strawberries and cow print that embody the youthful spirit of her brand. “Masks are functional and serve a utility similar to eyeglasses,” said Kelsey. “And just like eyeglasses, you might wear these masks every day and we wanted to offer a little personality and style with their safety.” For every 2-pack bought, a 2-pack will be donated to a cause in need.
Order volumes for Fitness, Sports and Outdoor equipment was higher from the month of February in 2020 with a spike in May- presumably as certain counties emerge from lockadown and the temperature in countries such as the US and UK start to warm up, making outdoor activities more of an option.
One trend in the Fitness and Sports industry are brands that combine technology with physical products to give you the same quality of workouts you would get in a gym with a personal trainer, from the comfort of your home.
One growing brand that is building a sense of community and pivoting to working out at home is Peloton. With its gyms temporarily closed, Peloton brings its high energy spin classes to your home with the Peloton bike, delivered right to your doorstep. Available either on its own or as part of three different packages, users who wish to access its library of classes will need to sign up for a monthly subscription which enables you to join more than 20 live sessions per day.
The Food and Beverage industry saw an unprecedented spike in order volumes toward the start of the year as shoppers globally went through phases of panic buying. However this was followed by a drop in sales and then a slight increase in order year-on-year for the next 4 months.
Globally many F&B outlets are struggling to survive because of restrictions around dining in and diners not able to leave their homes. As more focus has been on living at home and with the economic uncertainty, shoppers have also been purchasing consumer packaged goods with more of a “ survival mindset” looking to buy in bulk at cheaper prices, which negatively impacts small businesses operating in this space that may sell small batch products or sell only locally and can't’ afford to bring their price down as low as the large retail supermarkets.
New York restaurant Tarallucci e Vino collaborated with Feed the Frontlines NYC in an effort to use restaurants made food to keep the supply chain alive and serve food-insecure populations during the pandemic. In addition to feeding first responders, the restaurant is also sending meals to folks in supportive housing. Their aim is to connect the dots for politicians and sponsors for future funding—restaurants already have a great capacity for making food, doing this can keep the supply chain going, as well as feed communities that are food-insecure.
The order volumes for Agriculture and Gardening products were fairly similar during the first months of each respective year with 2019 actually showing a slight increase in demand over 2020 in mid January. However as we progressed into February we can see the order volumes pulling ahead in 2020, moving into a sharp rise, whilst April has dropped slightly orders are still well ahead of 2019 levels through to second half May.
Essentially what we can derive from a comparison of the year-on-year numbers is that the restricted living conditions globally certainly did have an effect on agricultural and gardening goods. The steady incline corresponds with the rise in the number of Covid-19 cases internationally and the increased media attention and global eyes on the diseases. And the sharp rise corresponds with the period where many countries imposed lockdowns. There has been a growing interest in urban farming, sustainable living and self-sustained living in recent years, however self-isolation regulations seem to have moved the demand for these products into the mainstream.
"More people are thinking about where their food comes from, how easily it can be disrupted, and how to reduce disruptions," said landscape architect Kotchakorn Voraakhom, who designed Asia's largest urban rooftop farm in Bangkok.
One company that has made self-sustainability and urban farming for city dwellers during this period is Malaysian startup CityFarm that manufactures and sells vertical farm modules, complete with artificial light for indoor installation. City Farm integrates agriculture into smart city buildings and infrastructure, utilizing city space more productively and efficiently. The start up is providing citizens with access to fresh produce without additional land usage while saving transportation.
The Animal and Pets industry also saw significantly improved year on-year growth in 2020 as compared to 2019. We can see that from the beginning of the year that was a sharp spike in demand, that flattened and dipped as we moved into February and then gradually increased towards May. However even during the period of lowest demand between mid February and mid March, the order volume was still up around fifty percent of the order volume in 2019.
Industry watchdogs and brands did find a correlation between self-isolation and an increased demand for domestic pets. In the US over the months of March and April, many animal shelters scaled back operations because they were out of animals for adoption. The number of animals in foster care is 43% higher than this time last year, according to a survey of 1,200 animal welfare organizations, nationally.
One of the challenges of owning a pet during the pandemic is the lack of freedom to take them outside for physical and mental stimulation. As a result pet wonders have started turning to non traditional ways to keep their pets happy. One brand that is leading the charge to keep pets engaged in restricted living conditions is start up Happy Tailz. Happy Tailz designs physical puzzles and board games for pets. These games and puzzles are designed to train pets, keep them stimulated and foster closer bonds between pets and owners.
The year started off strong for the Arts and Crafts industry with orders in 2020 coming at around double compared to the first few weeks of 2019. However demand then stayed relatively stable through the following months of 2020 and with order numbers not variating too far from number in April and May of 2019, despite the increase in the number of people staying in and picking up new hobbies to pass the time in isolation.
Despite the numbers not being drastically different from 2019, we can still expect that as long as countries undergo prolonged periods of restricted living, there will be a sustained demand for Arts and Craft supplies both for hobbyists and amatuer artists who are picking up the skills as well as for parents who have to homeschool and keep their children entertained without leaving their homes.
According to a CNBC article, “Gamemaker Ravensburger has seen U.S. puzzle sales soar 370% year over year...” Puzzles and board games offer fun for the whole family, allowing parents and kids to bond and helping keep kids off screens for at least part of the day.
UK based sewing supplies brand Sew Creative Studios decided to give back during this period to the staff working in the NHS. The brand started a movement to have members of the community sew drawstring bags for medical staff to keep their equipment or uniforms in before washing. Check out their website if you are interested in picking up sewing or if you would like to support the health heroes in your local community.
Interestingly for the Beer, Wine and Spirits industries, the order volumes have not deviated much year-on-year for the first 3 months of the year. We can see a defined increase in the orders towards the end of March, peaking in Mid April and then falling slightly toward the end of May.
The increase in orders corresponds to the lockdown period internationally. Studies and tracking done during this period tell a consistent story, that is that despite bars and nightspots being closed alcohol purchasing and consumption within the home was generally on the rise.
According to Republic National Distributing Company (RNDC), a behemoth wine and spirits distribution company, sales of spirits jumped by around 50% for the week ending March 21. Nationally, the overall increase for the week, according to Nielsen data, was a 55% spike in sales.
Despite this overall increase in demand, social distancing protocols and other preventative measures have had small distilleries and other BWS small brands hangin by a thread. Some businesses choose to pivot to more essential items with higher demand for that period. Santa Fe Spirits closed down its production entirely and started to manufacture hand sanitizer, which was in shortage globally. Other brewers and distillers who were primarily wholesalers like Philadelphia Distilling, have moved into selling direct-to-consumer to have a piece of the “home consumer” pie.
In the Health, Wellness & Cosmetics industry we can see that there are much fewer tumultuous ups and downs as compared to other industries. The year on year growth is fairly stable with a dip in mid March and a spike in April.
Challenges faced by companies in the health, wellness and cosmetics industry are two fold. On the one hand they are affected by the same shift in consumer behaviour as players in other industries. On the other hand they also face challenges that are unique to their industry. For example, ingredients for certain supplements or natural products can only be purchased from specific parts of the world, and with recent supply chain disruptions, their purchase cycles are then becoming longer and more complex.
To overcome the challenges posed by new ways of living, companies have had to innovate. One company that found an ingenious way to grow its market share without reinventing the wheel is all natural energy shot manufacturer, GoBig Energy. Usually targeted at hungover young professionals looking to survive a hangover at the office or students trying to pull all-nighter study sessions, the brand decided to focus its efforts on the one segment of society that needed the most amount of energy in the fight against Covid-19- frontline and essential services staff.
In March, the company announced that they would be donating over 10,000 units of their energy drink to hospital staff and other front-line medical personnel.GoBig saw a way to help these heroes out with an all-natural pick-me-up while also increasing their brand awareness in a fantastic market.
Medical and Pharmaceutical products performed relatively well over the first part of both 2019 and 2020 The order volumes then picked from early April and continue to rise into May as countries are seeing a resurgence in Covid-19 case numbers with some countries entering a second period of lockdowns.
The main challenge for businesses in this industry has been to keep up with the overwhelming demand and also to find new ways of giving consumers a level of medical care and access to products from their homes.
One initiative from Toronto, that was initiated by medical startup founders, doctors and health care professionals is the COVID Box Project. The COVID-19 intubation box is a polycarbonate box that can be flat-packed for easy shipping, and assembled quickly on the receiving end for use in healthcare facilities while medical personnel intubate a patient. These companies are manufacturing and distributing these boxes to Canadian and US hospitals with the support of generous individuals and companies.
The Toys and Games industry saw high year on year growth in between January and March of 2020, followed by a dip and then a steady incline which tapered off in mid April. One interesting point to note here is that toy and games sales in 2019 actually exceed that in 2020 towards May.
One possible reason for this is that typically schools close for the summer towards the middle of the year and parents purchase more toys and games to keep their kids occupied during this time. This year’s demand was turned on its head with prolonged school closures.
Florida based Toy manufacturer and distributor R&R Games is giving back to the community by supporting customers’ favorite local game stores (FLGS). When customers purchase family-friendly games from R&R Games’ website using the offer code “StayNplayAtHome,” the company will take 30% off the price and donate another 25% of its proceeds to consumers’ FLGS. All customers need to do is send their order number to firstname.lastname@example.org, along with the name of their FLGS, and R&R Games will take care of the rest and write a check.
The future of consumer behaviour as a result of Covid-19 remains uncertain and the new normal of retail and wholesale is still taking shape. However based on the year-on-year numbers we see that there is still growth across many industries. This means that for companies that are actively seeking new opportunities for growth while maintaining operational efficiencies, the rest of 2020 and the future does not look as bleak as it may have once seemed.
Interested to see our previous posts? Look no further:
Coronavirus: Interest trends and the odd silver lining
COVID-19: Our lowdown on the latest ups and downs
COVID-19: With May almost upon us, how are things looking?
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