What Can We Learn from “Pandemic-Proof” Industries?
The COVID-19 pandemic affected nearly every aspect of daily life, including education, work, and communication. However, the economy may have experienced the most dramatic change.
As U.S. gross domestic product declined 5% in the first quarter of 2020, the National Bureau of Economic Research declared a recession. Then, in the third quarter, the GDP dropped an additional 31.4%.
While high unemployment rates certainly had a major role in this decline, mass business closures also played a part. In early April 2020, nearly half of businesses temporarily shut their doors. As they struggled to stay afloat, a number of industries enjoyed unprecedented success.
These pandemic-proof sectors managed to create new jobs, provide better products, bolster the economy and implement smart solutions to emerge from the pandemic even stronger than before.
The pandemic caused many traditional brick-and-mortar stores to close their doors, putting a major strain on the retail industry.
However, those who were able to cultivate or maintain an online presence successfully pandemic-proofed themselves and experienced major success.
While retail and food services fell by 7% between February and April 2020, e-commerce providers saw a 14.8% to 16% increase in sales during that same period.
Of course, this growth has always been inevitable. However, the pandemic fast-tracked the shift from physical stores to online shopping and what would have taken many years took just a matter of months.
While stop-start lockdowns brought many industries to a standstill, the global construction sector only shrunk 3.1% last year.
While this slump marked the worst decline since 2008, construction work within the U.S. didn’t experience much of an impact. Since the federal government deemed the industry an “essential business,” laborers were forced to carry on as usual.
In response to growing concerns about workers’ health and safety, the industry quickly adopted digital tools, enhanced protocol, thorough inspections, and more effective personal protective equipment.
These additions pandemic-proofed the sector and will serve as the standard for other businesses looking to increase health and safety measures in the coming months.
The number of hunters has been declining for decades, that is, until last year. Officials in nearly every state reported a moderate to a massive spike in hunting in 2020 as both new and seasoned hunters picked up their weapons and engaged in the sport. Gun sales also saw a sharp increase.
What caused these spikes, though? Social unrest, more relaxed hunting restrictions and an increased interest in outdoor activities may have had something to do with it. However, the thousands of new hunters still came as a surprise. Experts surmise that the latent desire was always there, it just took a pandemic to get these wannabe hunters to pull the trigger.
4. IT and Digital Services
Since the start of the pandemic, the world has become increasingly reliant on information technology and digital services. Subsequently, these industries have fared much better than most and will likely continue to do so as occupations grow by 11% over the next decade.
Even as vaccinations allow the world to return to a sense of normalcy, many people will still rely on IT and digital services to help them break a sweat at home, expand business to the digital world and keep working remotely. During this time, cloud computing, data security, and companies that produce at-home alternatives will likely experience growth opportunities and a huge financial boon.
Many people have relied upon insurance as a financial precaution during the pandemic. Since even a short hospital stay can put people in debt for decades, most Americans didn’t want to take the chance.
Thus, the finance and insurance sector — by little effort of their own — were essentially pandemic-proof as long as the virus was threatening public security.
This trend will likely continue for the foreseeable future as friends and relatives warn the next generation of emergency hospital stays and mounting medical bills. However, in terms of auto, homeowners, renters, and life insurance, the industry must implement segmentation strategies to determine client needs and remain competitive.
No matter what plight befalls the world, pharmaceuticals will always be in high demand. Such was the case last year. As the virus-infected billions of Americans, the pharmaceutical industry was hard-pressed to create a vaccine to protect them.
After numerous multi-billion dollar investments, the sector finally produced a handful of effective vaccines and is now enjoying an economic surplus.
However, the industry will likely face pricing reform in the coming years and, if they’re to preserve profitability, they must expand outsourcing and reduce costs. As a result, you’ll likely see alliances between packaging, transportation, and manufacturing providers to leverage industry-leading capabilities and support cost-conscious customers and manufacturers.
Many of the industries above weren’t just pandemic proof, but pandemic profitable. Their ingenuity, determination, and adaptability — not to mention high consumer demand — have made them leaders in the U.S. and global economy.
As struggling businesses attempt to bounce back from the pandemic and subsequent recession, they’d be wise to look to these industries for insight that’ll boost their potential.