Now four months into the Covid crisis, it’s clear that most industries that rely on e-commerce continue to do well despite all of the major disruptions in the economy. The first few weeks were very shaky. Many industries appeared as though they were going to have major setbacks, but it appears as though e-commerce overall is booming the longer the crisis lasts.
However there are some segments that are struggling. The purpose of this blog post is to share what we are hearing and what we are seeing with our clients, our colleagues, their customers, and others in the market places that we serve.
What e-Commerce Companies are Thriving During Covid-19?
Unsurprisingly, most industries that depend on e-commerce or where ec-ommerce is a major component of their operations have seen a big lift during the pandemic. But there are several noteworthy examples of industries that are doing exceptionally well, even better than one would anticipate given the current nature of the crisis.
After a Slow Start, Healthcare & Healthcare Supplies are Taking Off
All of the supplies that medical practitioners, physical therapists, dermatologists, dental practices and every type of non-emergency medical practice needs are booming. It’s no surprise that all of those supplies are in demand as people catch up on the services that those types of businesses provide.
Key Metrics
- Our clients and industry analysts in the space are telling us that business is up over 30% from the same period a year ago.
This growth will probably increase over the next few months as many businesses are playing catch-up. The good news is that it does look like supply chain issues are ending and the global flow of materials and supplies seems to be moving again – because if you are in the business of healthcare apparel, surgical supplies, physical therapy equipment and any equipment related to dental practices you are very busy.
Current Industry e-Commerce Grade: A
Outdoor Recreation Products, Including Camping and Boating are Exploding
The reason why is obvious. People have been cooped up in their homes for months and are looking for safe ways to enjoy what’s left of this summer, even though many states are facing an increase in Covid cases and on the verge of going back into lockdown.
Boat dealers have sold out of their inventory. Camping suppliers don’t have tents and backpacks left. Kayaks, paddleboards, and canoes are all in short supply. Heck it’s even hard to find a comfortable beach chair online!
Vacation homes have been rented and all of the stuff people buy for them has been sold out whether it be outdoor furniture umbrellas and other patio equipment.
Key Metrics
- One small boat manufacturer in Florida told us their sales of 17-24 foot boats is up 300% this year. That type of activity of course has a residual effect on distributors and retailers of boating-related equipment.
- Bass Pro Shops, a leading retailer of outdoor, fishing and hunting equipment reports very strong sale and is currently hiring retail help for most of its stores – surprising as a number of major retail chains are truly suffering due to Covid. Ironically Bass Pro Shops also has benefited from being labeled an essential business’, many states have allowed to stay open because they (depending on the state) are firearms dealers.
- Other outdoor gear companies that have more apparel vs equipment have not fared as well.
Current Industry E-commerce Grade: A-
Pet Food, Equipment & Supplies Continue to Boom
Chewy.com is one of the largest online suppliers of pet food and equipment:
“Chewy has more than doubled in value and is rolling in revenue from all of those people who thought adopting a pet in the middle of a pandemic was a good idea.â€
Other pet suppliers and manufacturers are doing well but they tend to be niche brands that supply specific parts of the industry. Veterinary supply companies were hit hard by the pandemic as people stopped going to the Vet with their pets unless absolutely necessary. But overall this industry is doing well.
Key Metric
Current Industry E-commerce Grade: A
What e-Commerce Companies are Struggling During Covid-19?
OK, there have been some industries that have encountered many more struggles, even outside of the entertainment and restaurant industries.
Retail Has Been Hit Hard
The confounding aspect is that many retailers were not able to recover a lot of the 50% drop in retail activity in March with e-commerce sales. So despite the success of Amazon, TJX, Target and niche apparel retailers selling a lot more online during COVID; overall the apparel industry has hit challenging times – even though there is a lot of entrepreneurial activity and innovation happening right now in it. This can likely be attributed to people generally not having places to go and people to see. When you’re not trying to keep up with the Joneses, you don’t need to keep up with the latest fashion trends.
Key Metrics
- Overall Apparel took a 34% hit in March BUT Browns in London reported a 70% increase in sales of loungewear)
Current Industry E-commerce Grade: B-
Paper and Forestry Products
If you grow trees and sell timber it’s an up and down gyration of demands during this Pandemic.
Key Metrics
- Overall Paper usage is down 70% according to some industry analysts (office closures, government pull-backs etc.)
- Tissue boomed due to fears of supply issues that never really happened after the first two weeks of the pandemic and its initial stay-at-home orders.: Nearly 700,000 tons of tissue produced by U.S. mills in March, more than any other month since 2007 according to American Forest and Paper Association.Â
Meanwhile, in the lumber industry the restart of residential construction has been a boom and some analysts are reporting price rebounds on the order of 60%. The problem is residential construction utilizes so many different types of supplies from all corners of the earth, so while a builder might be able to get and sell Lumber; they may not be able to find plumbing and electrical raw materials – Housing analysts report that some parts of the supply chain are still stuck.
Current Industry E-commerce Grade: C+
The Bottom Line
In many ways, e-commerce is booming in the age of Covid. Many businesses in the booming industries (Healthcare, Pet Care, Outdoor Recreation, Home Furnishings) are busy improving their e-commerce sites, experiences, and teams and are set to capitalize on the growth that is happening currently and that will accelerate during a recovery.
Other industries are less fortunate at the present moment but should still plan for their inevitable rebound. As states move into their different phases of the reopening, more and more industries will see a resurgence. Others may see drop off (e.g. Home fitness equipment, as gyms reopen) but should not pull back in their e-commerce optimization efforts as the uncertainty of this Pandemic is absolute.
If you’re ready to embark on a project, or just want to share your experiences of how the pandemic has affected your business, we’re waiting to hear from you!
