Coming out of COVID-19 and entering this new normal there are a lot of questions being raised. For most brands it is how will we adapt to this new normal? Before you can adapt to the new normal it is important to get an understanding of what that is.
“The new normal is a shift to digital for businesses and brands.”
Most brands noticed a boost in eCommerce during the Coronavirus pandemic and now thinking about slowly reopening stores, companies will soon gain in-store revenue as well. There are many positives to look at when analysing these changes however, the negatives must also be addressed. Consumer confidence in homeware brands took a large hit as the pandemic worsened in Australia. The Westpac-Melbourne Institute Consumer Sentiment Index took a huge hit and dropped 20%. However, it is reported that business confidence is slowly climbing back up to pre-covid levels. Our google vertical insights show that generic searches are much more popular than branded. Meaning customers are searching for products they just aren’t searching by brand name.
Although homewares dipped in consumer confidence during the pandemic, cookware noticed high product demand. Business Wire ( Berkshire Hathaway company) expects that cookware market growth will accelerate at a compound annual growth rate of 6% and expects an incremental growth of 2.77 bn AUD. The market is fragmented with several main players occupying market share. These include but are not limited to Meyer Corp, Newell Brands Inc, The Middleby Corp, and Whirlpool Corp. They state that the promotion of induction cooking will offer immense growth opportunities. Brands that focused on these growth opportunities and tapped into this consumer demand noticed high returns.
So what does the data say?
Business confidence is almost returning to pre-covid levels, Australia noticed a 16.7% increase with the biggest increases coming from South Australia and Western Australia. Although businesses took a large hit during the pandemic Roy Morgan CEO Adam Levine states “For the first time this year a majority of businesses, 50%, said they expect their business will be better off financially this time next year.” Although there is a long way to go for Australian businesses there is a chance that they can return to pre-covid levels by this time next year.
Although the market decreased in April it is up by 13 points in May. With the new normal setting in we will see a boost in revenue from in store sales as well as e-commerce. Google reports that 1 in 4 Australians will shop online more frequently post-covid. This will positively boost the homewares market that is selling online.
When analysing the Google market data for homewares across Australia you’ll notice some anomalies during the pandemic that trump the same time last year.
Looking into all device dynamics and comparing quarterly from Q1 2019 to Q1 2020. We can see a significant increase in clicks, queries and impressions greatly surpassing the other quarters. This can be directly attributed to the coronavirus pandemic and increase in purchasing patterns.
This suggests that there has been an increase in customers enquiring and looking for homewares products (queries), the ads being supplied are meeting these enquiries (impressions) and they are driving clicks and click through rate. This data suggests that although there was a peak of the beginning of Q1 2020 interest is decreasing right now and is returning to pre-covid levels. As the market is still up there are current market opportunities.
Next Level’s Advice
Although life is slowly returning to normal it is important to understand the new normal. Surveys from Google suggest that the move to digital is the new normal. As consumers have adapted to the ease of online shopping they will continue to shop online at higher levels than before Covid.
This means that even though stores are opening you should not decrease your digital presence. As now people have discovered the simplicity of buying online it offers your brand the opportunity to meet their clients needs in a new way.
Although the market has seen decreases it is now climbing back to pre-covid levels and it will only increase with the combination of e-commerce and in store activity.