Need A New Business Idea? Key Stats About 5 Industries That Are Booming Because Of COVID
By almost all metrics, the US economy is in the gutter.
Unemployment remains dangerously high while layoffs loom overhead. Some states, such as New York and Texas, are worried about losing as many as 60% of their restaurants. Meanwhile, disasters on both coasts have displaced families and shuttered businesses. It’s simply difficult to put a positive spin on these harrowing times.
However, a few industries have managed to wade through the darkness and actually grow amid a deadly pandemic. From eCommerce to delivery services to office equipment, parts of the economy have indeed pushed forward.
Curious about the details of these booming industries? Let’s take a look at the numbers below.
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Online Shopping Is A Trend That Won’t Stop
➤ eCommerce sales grew 31.8% between Q1 and Q2 of 2020
As Merchant Maverick previously covered, many consumers have turned online to get their shopping fix while forced into quarantine by COVID-19. According to a report by the Census Bureau of the US Department of Commerce, eCommerce sales rose to $211.5 billion during Q2 of 2020, a 31.8% increase over Q1 of this year.
Some also anticipate that the levels eCommerce reached this year will stick around post-pandemic. In June, software giant Adobe concluded that the pandemic has accelerated eCommerce’s growth by four to six years. Another computer giant came to a similar conclusion: In its annual US retail index, IBM estimated COVID helped shift consumers away from brick-and-mortar stores to digital shopping roughly five years faster than otherwise predicted.
Beyond traditional online shopping methods, orders for groceries have also boomed. In August 2019, online grocery sales in the US were at $1.2 billion over 30 days based on a Brick Meets Click/Mercatus survey. By June 2020, the sales numbers had surged to $7.2 billion, potentially reflecting the consumer’s wariness over COVID and an increased online fulfillment capacity for grocers.
Elsewhere in the grocery scene, direct farm-to-customer websites also experienced substantial growth — Barn2Door, a direct sales platform for farms, has seen online orders rocket up over 10 times compared to last year, company COO James Maiocco told The New York Times earlier this month.
Delivery Services Are Becoming More & More Crucial
➤ Food delivery services have grown by 110% year-over-year
As is fitting for a world teeming with online shoppers, delivery services are unsurprisingly on the rise. According to Certify’s SpendSmart Report of business expenses for the first half of 2020, food delivery saw a 110% increase in 2020 compared to the first half of 2019.
It’s not just business clientele that is tapping into delivery apps, either. For example, according to a June survey of over 700 US adults by Toast, a company that develops software for restaurants, only 14% of restaurant guests said they had not placed an order online in the past month.
And while Toast’s survey hinted that takeout is still more popular than delivery, 66% of guests said they had used a delivery app at least once in the past month, while 70% had ordered delivery through a restaurant’s own app or website.
Elsewhere, commerce behemoths Amazon and Walmart are betting on fast delivery times. Just this month, Walmart revealed Walmart+ (its own answer to Amazon Prime) while boasting that over 160,000 items are available for same-day delivery through its service. Amazon, meanwhile, announced plans to hire 100,000 additional employees throughout the US and Canada to keep pace with COVID-19’s online shopping surge.
Ghost Kitchens Could Be The Future Of Dining
➤ The ghost kitchen industry is predicted to create a $1 trillion global opportunity by 2030
In order to keep operating through quarantine, many restaurants essentially became (and in some cases, still are) ghost kitchens, a type of dining room-less restaurant where all orders are made for delivery. With such rapid growth in 2020, a bullish push has begun for ghost kitchens (also known by other monikers such as cloud kitchens or dark kitchens).
Euromonitor, a London-based strategic market research agency, has been particularly keen on the future of ghost kitchens. In a virtual webinar in July, the company’s Global Food and Beverage Lead Michael Schaefer predicted that the ghost kitchens would grow worldwide to become a $1 trillion industry by 2020.
Customers are also becoming more on-board with the concept of ghost kitchens; Euromonitor claims that 52% of global consumers are okay ordering food from a restaurant with delivery-only options.
There is strong anecdotal evidence about the success of ghost kitchens. For example, Fortune interviewed a couple of industry leaders who are confident ghost kitchens will hold strong post-pandemic. The Washington Post recently highlighted how the kitchen-only model has both provided a beacon of hope for current restaurants hit hard by COVID and a lower cost-of-entry for operators new to the restaurant industry. A New York Times article provides a further glimpse at the boom these phantom eateries experienced almost overnight.
People Have Been Getting Fit At Home
➤ Fitness equipment sales rose 130% following the onset of COVID-19
With gyms closed due to COVID-19, people have needed to turn to other avenues to stay fit. This has led to a rise in the world of home fitness equipment.
Per the NPD Group, a business analytics firm, fitness equipment sales shot up 130% by early May. Some sales segments saw meteoric growth spurts, including weight benches (up 259%), free weights (up 181%), stationary bikes (up 170%), and yoga mats (up 146%). Even outdoor equipment sales rose — a later report by the NPD Group found that bike sales were up 63% year-over-year for the month of June.
The rise of exercise equipment has even bled into the stock market. Peloton, the stationary bike with a fitness subscription model, saw its stock price shoot up from $18.64 near the start of COVID to $98.61 by mid-September — an increase of almost 530% within just six months. This growth was tied to increased demand for Peloton bikes during quarantine: Following Q2 2020, the company announced its first-ever quarterly profit thanks to a nearly tripled revenue stream.
Remote Workers Are Driving Office Purchases
➤ 65% of at-home workers reported purchasing office supplies during the first month of the pandemic
Just as at-home exercisers need equipment to stay fit, at-home workers need tools to do their jobs remotely. With so many businesses allowing employees to work remotely, it’s only natural that equipment and supplies for the home office have become popular.
Second Measure, a company that analyzes transaction data, looked into the numbers: Office retailers Staples and Office Depot both boosted their sales by several percentage points year-over-year in March after posting down months in January and February. In an early April poll of US-based adults, Second Measure further found that 65% of those who worked from home had purchased office consumables (like pens or paper). 29% reported buying an electronic device while 26% said they had bought office furniture.
Meanwhile, Overstock.com told The Washington Post in mid-April that sales of home office furniture were up over 100% since the beginning of COVID-19’s outbreak.
And remote work looks like it might be here to stay. A QuickBooks survey reveals that 27% of small businesses are now allowing employees to work from home. QuickBooks also found that 23% of entrepreneurs starting new businesses intend on having 100% of their workers clock in remotely. Both those numbers are higher than they might’ve been in years past — only 16% of companies employed fully remote workforces in 2018, per Owl Labs’ Global State of Remote Work report.
Help Your Business Succeed During COVID-19
For the time being, COVID-19 looks to be here to stay. While scientists are pushing research forward for a vaccine, it will likely be months before most people are inoculated. If you currently operate a business, keeping it functional while the economy continues its slump will be crucial.
If you’d like to get a jumpstart on shifting your business to eCommerce, check out our guide to the best digital marketplaces. To aid your business’ marketing plan while COVID rages on, peruse five tactics for connecting with customers during a pandemic.
For everything else COVID-related, be sure to keep a tab on Merchant Maverick’s coronavirus hub.