In the wake of the COVID-19 health crisis, retail sales dropped precipitously in March by 8.7%. It was the biggest monthly decline on record. Food and beverage brands, on the other hand, represented a relative bright spot, while sporting goods, vehicle parts, furniture, and apparel sellers took the hardest hits according to CNBC. These two graphs illustrate the disparity.
Food and beverage brands and retailers are seeing huge growth online
While food and beverage sales grew 25.6% across offline and online channels, online growth was much faster. Across the 35 food and beverage retailers we work with, YoY revenue growth after big shutdowns started during Week 12 (Mar 23-27) peaked above 150%.
Let’s dig into the data, looking at 3 types of sellers: grocers, brands, and subscription services.
The grocers did well, of course
Here’s a typical result from a niche grocer selling a variety of ethnic products and brands. From the graph below, you can see that their YoY revenue surged immediately after big shutdowns started. Sales growth was constrained mostly by their ability to keep products in stock.
Brands did extraordinarily well, too
Here’s a typical example of a snack food brand you’d find in Whole Foods or other upscale grocery store chains. What’s interesting is their growth started to accelerate before the big shutdowns occurred. We noticed the same trend across most of the food and beverage sellers we track.
Brands are intriguing because many are still early in defining and implementing their direct-to-consumer strategy. We’ve heard feedback akin to, “nobody’s going to buy a package of Oreo’s on our website,” but the answer is many will. They’ll just stock up in larger quantities. The larger issue, perhaps, is product discovery. Most experts anticipate the impact of COVID to span years, with many high-value customer segments being less likely to walk into a grocery store. Food and beverage brands must find new ways of being discovered as in-store tactics become less effective.
We work with many subscription services that allow customers to have food and beverage products delivered on a recurring basis. Here’s a typical example for a large seller in the “butcher” category, who saw demand surge immediately before big shutdowns started.
Subscription services are interesting because, to the extent customers are truly delighted with their service, consumers may be the most “sticky” even after the immediate health crisis abates.
How are grocers, brands, and subscription services getting results?
It may seem that shoppers are willing to literally throw money at any food and beverage seller with stock on their shelves, but it’s not that simple.
Every food and beverage retailer and brand is facing a unique situation
Some are facing supply chain disruptions that have brought their businesses to a halt. Others relied on offline sales and are trying to pivot to ecommerce to sustain their companies, now and into the future.
In nearly every scenario, COVID-19 will be a game-changer. Iterating, or outright transforming business and marketing strategies will be necessary. We have the benefit of 22 years of experience working with many different companies across dozens of ecommerce categories. Retailers and brands will be looking to us over the next few months to help guide them through the business transformations that may be necessary, and we’ll deliver for companies large and small as we always have.
Are you looking for a thought partner to help? Let’s talk, please reach out to us here.
Before the COVID-19 outbreak, remote work was increasing in popularity at a gradual, steady pace. But with the sudden need to work from home for the safety of the public, many employers and teams were unprepared to shift all their work from in-office to working at home. Help your team (and yourself) face the challenges and capitalize on the opportunities of remote work with these tips.
Collaborate with Your Team
They are your company’s biggest asset, and not being with them in-person doesn’t mean you can’t work with them. In fact, it might be even easier now than ever before. Several business-oriented instant chat options exist online and as programs you can install for one-stop chatting, workshopping and more. You can also set up a digital lunchroom to encourage socializing and keep morale up during social isolation.
Maintain a Routine and Workspace
This applies to the individuals on your team as well as your company as a whole. If your team always had a Monday morning meeting, keep having it. Did you always have coffee in the morning on your commute? You may not be able to run to your favorite coffee shop for it, but you should still incorporate that fresh cup into your morning routine. To help you stick to a schedule, you should also set up an area of your home to be your makeshift office. Having that designated space can help you separate home life from office work.
When working at home, your team might put undue pressure on themselves to over-perform due to the misleading reputation of remote work being less productive than in-office work. To avoid burnout, consider having your team make accomplishment lists for every day of the week, so they can see all they’re getting done. Offer impromptu ‘nature breaks’ for your team to step out onto their porches or into their yards. They’re still safely at home that way, but taking a breather that will keep them refreshed and ready for the work ahead.
Innovate and Repurpose
An example of smart thinking is visible in the case of two apparel companies shifting their focus to making face masks, a much-needed product in slowing the spread of the coronavirus. As retailers that aren’t part of the essential business lists, companies like these had to innovate to make use of their skills in this new economic environment. Think about what your company offers now, and work with your team to discuss new ways this can provide a solution for your clients.
If you’re thinking about selling online as part of your COVID-19 business strategy, we encourage you to get a free e-commerce analysis from Exclusive Concepts to help identify the areas where you will see the best results possible.