A supplier representative I trust shared with me a comprehensive independent 33-page report from a US research business on the likely impact of COVID-19 yesterday.
The report looks at the likely impact from the perspective of US retailers and their suppliers including manufacturers and the supply chain. It seeks to inform US business leaders so that they may make appropriate plans suitably in advance. There is expectation that much of what the report discusses will apply to Australia.
While I cannot share the full report, here is some key information that I hope is useful. My own comments are in square brackets.
- Out of stocks are likely across high demand categories. [Australia has been ahead of the curve on this – toilet paper, pasta, cleaning products, rice.]
- Cocoon-stocking will reflect household makeup, with indulgent items, such as DVDs, confections, salty snacks, alcohol sales increasing; however, holiday shopping may take a hit. [Hence advice weeks ago about promoting games, jigsaws and similar.]
- Food delivery, Click & Collect, online shopping and home delivery will increase as consumers avoid going to areas where there are large gatherings.
- In-home entertainment will flourish, and some marketers should re-consider their media spending (e.g., less out of home, fliers, etc.)
- Out-of-home food consumption is likely to take a big hit as travel comes to halt. More people will be working from home as virus spreads across the U.S. [We see stories daily ion restaurant closures.]
- In-home food and beverage will increase significantly, resulting in both increased consumption and pantry stocking.
- Stockable items continue to be popular (besides obvious ones like wipes), e.g., shelf-stable and frozen food items, sports drinks, water, toilet paper, etc.
- Some manufacturers can potentially spend less in terms of advertising and trade if they have virus tailwinds in their back, opportunistically driving some savings.
- Preventive healthcare products, such as vitamin C, are trending higher than symptomatic products.
newsXpress has been sharing this information like this and even more detailed on COVID-19 for weeks. It shared it’s first strategic advice in terms of strategic product placement in store and out of store marketing relating to COVID-19 in late January. I mention this as a reminder that proactive marketing groups can play a key role in providing members with a competitive advantage.
Is it clear whether large shopping malls will open Monday or be closed as non essential gathering of more than 500.
Government measures don’t appear to be well thought through. The Monday deadline was conveniently after the F1 GP, which was cancelled anyway. And schools are exempted which has zero logic as it is known the young do carry a nd transmit.
Pretty obvious dot points there. If people are forced or choose to stay home, of course that is going to happen. I hope they weren’t paid significant dollars for that “research”. It’s been happening around the world for months. If your not a supermarket or selling essential items you’re in trouble. If coronavirus continues to gather steam expect business closures, job losses and major consolidation.
Some of the early behaviour pattern by staying at home during the virus will lead to two things.
More on line purchases and caused by the isolation and the more service being offered from by workers.
To illustrate a fellow I know in IT has 300 working there. They have decided to buy them all laptops and work from home.
The set up costs are heavy and the Company is considering this to be perminent The believe it to be progressive especially with the starting of families and other domestic situations.
On one side is the savings in transport and time and the other is the cost to small business such as Cafes and other food outlets.
It all points to an acceleration of on line usage for many more people using services such as Post Offices, on line Banking and Stationery orders.
This is at enormous cost
and to finish the sentence.
This is at enormous cost to the B&M retailers who does not have an on line website for their goods especially Stationery for surely Home/real Work Office could well be transitioning in the making from an ill wind blowing.
Parts of Europe are now shutting down all but non essential retailers, both in shopping malls and street stores. We need to be urgently making plans for this eventuality here particularly if we have stores in the major cities. Cashflow planning and access to cash reserves or additional funding is critical . Stock levels will also be very important. Unfortunately the government’s stimulus package is not going to be a great help if we are forced to close our doors due to a lockdown. New Zealand is closing its borders like we should have done at least 3 weeks ago. My kids school is exploring the possibility of online teaching as early as next week. Unfortunately this Tsanami is heading our way whether we like it or not!