10 minute read

At the beginning of April we tried to predict which business categories will grow due to the coronavirus, which new categories will arise and which will sadly sink. And if a few weeks ago we were trying to identify trends, now we already have actual data. Assumptions are turning into facts.

As we predicted, while some business categories are in decline during the COVID-19  crisis, others are growing.

Why are we looking at category level? Because COVID-19 is a time in which businesses are unprecedentedly regulated. And COVID-19 regulation usually has to do with category (in addition to premise size and location).

The service industry has changed radically. In this new situation, some services are up, some are down. And it’s not always the obvious ones. We all know - personally - that deliveries are skyrocketing all over the world, but other, less obvious services are up too.  For example, Yelp's traffic stats show that strip clubs and art galleries in the US are adapting fabulously (up 88% and 55%) due to online services. Mortgage lenders are receiving huge traffic (up 82%), as well as insurance businesses (life, auto, home and rental, by 22% to 25%) - not necessarily for new business, but increased traffic nonetheless.

On the other hand, reflexology and massage therapy in the US are losing out (down 46% and 33%) as well as other health and wellness treatments that involve human contact.

According to Overtok’s stats, these business categories have been registering an increase of over 50% and a 36% in the volume of inbound phone calls coming primarily from their websites and advertising in search engines as well as classified directories, such as yellow pages or niches: pharmacies, cellular labs, computer stores, pet supplies and food stores, fast food restaurants, bicycle sales and repair shops, insurance agents, veterinarians, psychologists and clinics.

While these business categories are sadly in decline and have registered a decrease of more than 44% in the number of calls coming into the business: real estate agencies, restaurants, auto workshops, laundries, driving teachers, hairdressers, beauty salons, massage therapy, taxis, kindergartens.

Source: https://overtok.com/small-busi... /

According to a New York Times analysis of data from Earnest Research, which tracks and analyses credit card and debit card purchases of nearly six million people in the United States (but does not include cash transactions), these categories are up in the US: Grocery sales, especially alcohol, meal kits and online grocers; restaurant delivery services. There is also an understandable increase in e-books, news media and music streaming, but not as high as video streaming and gaming, which are way up.

According to the New York Times, most other businesses are down in the US. These categories are all losing out in the coronavirus game: Health and beauty, entertainment, restaurants (from fine dining to fast food), transportation and everything that comes with it, from parking to gas, shopping, travel (from airlines to car rental), movie theaters, events, attractions, gyms and fitness clubs.  These are obviously in a bad place due to coronavirus restrictions, but even sales of toys, arts and crafts, books, music and sporting goods are in deep decline. These days in the US people also aren’t buying clothes, eyewear, jewelry, footwear etc or electronics. Many of these were predictable, but surprisingly these days Americans are spending much less on health care too, since people are postponing dental work and any kind of non-emergency medical procedures.

This graph from Womply.com clearly compares which types of businesses are up and which are down last week compared to the same week last year.

Let’s move onto the specifics – not only which categories are on the rise, but also what exactly are people buying these days. We know people are buying online much more than offline, but what are they buying?

Baking supplies
– one of the things that is offering solace and comfort to people at home is baking, so they are buying baking supplies as well as flour and other baking ingredients, so much so that the UK is experiencing a flour shortage.

– when people can’t meet their family and friends face to face, the way to keep in touch is by video-chat. And the first thing you need for that is a webcam. People are buying webcams like crazy. In the first week of April webcam sales went way up all over the world: in France they were up by +1830% and in Australia by +1083%, compared to the first four weeks in January. They also rose in the US (+458%), Brazil (+437%), Germany (+693%), Poland (+379%), the UK (+258%), and Russia (+109%).

Pajamas and loungewear
– when people spend most of their time in the house, they want to be comfortable. The more time spent indoors, the more people are in need of comfy pajamas, leggings, sweatpants and sweatshirts

Shaving and grooming equipment
– When people can’t visit their hair salon or barbershop, they need to be brave and attempt DIY haircuts. According to criteo.com, shaving and grooming items are selling like hotcakes in Turkey (+312%), Portugal (+250%), France (+167%), Italy (+166%), the UK (+138%), Poland (+118%), Australia (+79%), Spain (+64%), Germany (+62%), Brazil (+31%), and Russia (+27%), compared to the first month in the year. In the US, sales of hair clippers and trimmers went up by +241%.

Pet supplies – Since the coronavirus pandemic started, people have been adopting more pets.
For these pets they need pet supplies – another business that is up.

Gaming equipment
– Since all forms of outside entertainment are not an option at the moment, people are playing more video games and investing in gaming hardware as well as software.

Outdoor furniture
– People miss being outdoors, so if they are as lucky as to have a patio, veranda, a garden or a yard – they are furnishing it now to make the experience as pleasurable as possible. In the UK Sales of outdoor furniture went up +1908% with Germany not far behind.

Home exercise equipment
– With gyms closed everywhere, retailers have reported spikes as much as 625% in home fitness equipment sales. Australia, for instance reported instant shortages in dumbbells, yoga mats, resistance bands and boxing bags .

Many of the categories that we predicted would rise – like deliveries and home exercise – did in fact rise. On the other hand, we were pleasantly surprised by how quick and well art galleries in the US, for instance, adapted with online viewing rooms.

To sum up - the coronavirus is changing our world, but the jury is still out. SMBs and operators need to keep an eye open to stats and data that reflect trends and changes at category level. Those who will know - will be able to adapt and may thrive. So, look out for these changes. See what’s up and what’s down and find out where opportunity lies.