These are the industries moving forward as lockdown eases

Business activities are returning to normal, so we used our sales analytics reports to see which industries are making a comeback or were least affected during recent trade restrictions.

 

The most significant and obvious economic shift caused by the COVID-19 pandemic is a move from physical spaces and interactions to virtual ones. The general trend towards the digital has, of course, been happening for a while, but many who were slow to adapt have now been forced to do so – or at least for the moment, until physical movement and interaction return to something similar to what we used to call ‘normal’.

We’re not yet sure what business as newsual might eventually look like, and to what extent it will be a return to how we used to operate. The Economist reports that in China, where 90% of industries are active again, the way these industries are now functioning greatly affects their actual activity. Although many businesses have opened up, new safety regulations and more cautious consumer behaviour mean the economic output is still well below what it was before the pandemic hit.  

Despite uncertainties, we do see early indications of which industries may have been least affected or even benefitted most from the pandemic, and which appear to be the quickest to get back on their feet. We compare data from our own customers’ business activities with some global trends and predictions below.

We used invoices written by our customers as a measure of actual economic activity from January to June. This provides insight into how hard-lockdown and eased-lockdown economic activity compares to pre-lockdown activity, and what it might predict about the post-lockdown economy.

 

Industries least affected by or benefitting from the pandemic

Industries that are less labour intensive and don’t rely on a workforce made up of lower-wage employees are generally least affected, according to The Economist. These industries were largely able to continue operating and selling via digital platforms, or were otherwise providers of so-called essential products.

 

Among these were providers of essential fast moving consumer goods (like groceries), pharmaceutical or medical companies, news and entertainment industries that were able to capitalize on online platforms, and other businesses able to provide services or products without relying on intensive manual labor.

 

In addition, the World Economic Forum (WEF) highlights certain non-team and non-contact sport sectors (e.g., cycling and home fitness) as activities people are now more likely to spend time and money on. The same is true for industries serving otherwise neglected DIY or home improvement activities.

 

Any other industry able to gain digital access to homes to keep people connected or entertained benefitted greatly from the recent restrictions. BWM mentions educational technology for online learning, other virtual communication platforms like Zoom and Skype, and of course video streaming (e.g., Netflix) and gaming among these. Perhaps less expected was the return of activities like drive-in movies or how some local grocers saw more visitors than usual as stock in bigger retailers ran out at times!

 

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Looking at our own customer data, it’s clear that while everyone did suffer losses, the following industries were the least affected or even benefitted:

industries least affected or benefitted from lockdown

Data indicates invoices written (i.e., payment amounts received) per industry compared to the pre-lockdown average (Jan-Feb 2020) for that industry taken as 100% or ‘normal’.

 

Taking all industries into account, businesses only received 25% of their usual payments in April, and more than doubled it to 57% in May. The month of June looked much better for the economy as a whole, with 75% of their usual payments collected across all industries.

 

Protective gear, and pet food and supplies seem to have generated the most consistent cashflow across the lockdown period, even exceeding pre-lockdown figures. Food and beverages represents sales both through grocery stores (higher) and restaurants (lower) and may differ to your business’s experience depending on the type of business you run.

Download your complete Skynamo Business Insights catalogue to see what your sales analytics reports could look like here.

 

Industries quickest to get back on their feet

Infosys Ltd. president Mohit Joshi’s early prediction is that, “Agility, scalability and automation will be the watchwords for this new era of business, and those that have these capabilities now will be the winners.”

He’s quick to add that painting this as simply a new era of ‘big’ business running over ‘little’ guys or the ‘incumbents’ preventing ‘upstarts’ form getting a foot in the door, would be an over-simplification. While the current times could indeed be the first real test of the digital-first business mantras, COVID-19 will also force a rebirth of many industries as we all sit at home in lockdown, re-assessing and re-imagining modes of consumption, supply, interaction and productivity.

Joshi notes that, as president of a global technology firm, he’s intrigued to see where paradigms shift, as opposed to existing trends either accelerating or decelerating.

 

Among the trends he’s been observing are digital software alternatives to cash handling between people or at ATMs. There are also restaurants who have been repurposing their spaces to double as grocery stores to those not excited about filing into long queues at big grocers.

 

In these he recognises a combination of scalable and agile capabilities and believes these will define short and medium-term success of both smaller and bigger businesses. He goes on to emphasize that longer term success will, however, depend on more fundamental changes. Resilience, combined with agility, must be the new focus of business leaders who look to emerge from this crisis.

 

Other shifts might also occur within industries. There’s the example of tourism and hospitality, which are among the hardest hit, while the global economy is also counting on the revival of these industries to revive markets. They play a crucial role in getting people to ‘move around’ again. The interesting shift here might be from global to local. As global travel become less of a priority to those with the means to do it, they become more likely to travel locally as tourists in their own country or regions.

 

Looking at our own customer data, the following industries show the most significant signs of getting back on their feet:

Industries showing comeback after lockdown

Data indicates invoices written (i.e., payment amounts received) per industry compared to the pre-lockdown average (Jan-Feb 2020) for that industry taken as 100% or ‘normal’.

 

Considering the all-industry payments received progression from April (25%) through the end of June (75%), there are some industries that have showed significant comebacks since the initial hard lockdown in April. Comparing these to the least affected industries listed above, the low April figures are typically due to forced business closures or an inability to do business online.

Interesting to note is the slower comeback of office supplies and peripherals, which ties in with Joshi’s comments above and the article to which it links: businesses may be looking to digitalise where possible and as much as possible. This industry includes a variety of products beyond pens and paper, however, so it will be interesting to see what follows in months to come.

The same is true for other industries like sporting goods as well, as many people bought sporting gear when stores reopened so they could exercise from home, both because gyms are still closed and because they want to avoid crowded venues. Wine & spirits figures can fluctuate greatly dependent on local government bans of alcohol sales in different world regions. 

Has your business been able to move back to where it was at the beginning of 2020 yet? What are things like for your industry at the moment?

 

Download your complete Skynamo Business Insights catalogue to see what your sales analytics reports could look like here.

 

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