Tag Archives for " coronavirus "

Coronavirus Pandemic: Business Winners & Losers

There are always winners and losers.

With redundancies and bankruptcies announced by companies that are household names every day, you’d be forgiven for thinking it’s all doom and gloom out there.

But as sure as there are businesses which have been hit hard by the pandemic, others have found a niche, quickly adapted their business models, taken advantage of the opportunities, met customer demand, and thrived.

Some businesses and sectors are busier than ever right now, and I’m excited and fascinated by their success. Here are a few of the success stories.

Some of the Winners

Board Games & Jigsaw Puzzle manufacturers

(Source: getstencil)

Maybe unforeseen, but as families spent more time together, they entertained themselves with games and puzzles which resulted in sales of the likes of Monopoly, Cluedo and Scrabble rising by 240% in the first week of lockdown.

Collaboration Tools

Tools such as Microsoft Teams and Zoom have risen in popularity.

As people around the world were forced to work and socialise remotely, their need for technology to help them do so increased exponentially. My mother is in her seventies, and even she has now downloaded one of these apps onto her phone!

And she’s not the only one: apparently Zoom has been downloaded over 2 million times and its founder’s net worth has risen by $4bn since March. Microsoft Teams also saw usage grow to 44 million daily active users in the first week of March, so up by 12 million in just a week.

Food Subscription Boxes

The likes of HelloFresh and Mindful Chef have experienced rapid growth as the restrictions stopped us eating out, and forced us to stay in and spend more time in the kitchen.

Demand grew for fresh, healthy ingredients and customers were attracted by organic items suited to a range of diets and tastes. They have seen sales soar by as much as 300% since the outbreak.

Groceries

(Source: getstencil)

One of the first places society was seriously impacted was with availability of food and the ease with which we could buy it.

Supermarkets like Tesco and Sainsbury’s couldn’t get rid of their stock fast enough! They adapted by hiring as many as 40,000 staff and implementing social distancing measures as they saw sales increase by 30%.

Items ranging from canned foods and alcohol to flour and yeast flew off the shelves.

Home Improvement Stores

As we stayed at home, we suddenly noticed all those jobs that needed doing! After an initial drop in sales, people flocked back as soon as shops like B&Q started to reopen in accordance with social distancing guidelines.

Loo Roll manufacturers

(Source: getstencil)

Who would have foreseen this basic household item being stockpiled?

No one, and companies like Who Gives A Crap saw their sales multiply by as much as a factor of 12 in one day.

Payment & Money Transfer Apps

The use of apps such as TransferWise, Paypal, Cash App, Venmo & Xoom have risen by 11% since the beginning of March. And it makes sense: as well as doing all our shopping online, it quickly became apparent that cash is neither suitable nor hygienic at the current time.

Fitness Trainers

(Source: getstencil)

Exercise became a release, an outlet, and a way of keeping children occupied, and the industry adapted to the new normal accordingly by moving its business model online.

Joe Wicks quickly grabbed the nation’s attention. As did gyms, online yoga studios, fitness instructors and others in the sector.

Some of the Losers

Cinemas & Theatres

(Source: getstencil)

As cinemas and theatres became no-go areas, many streamed shows and performances to stay in touch with their audiences. However, in terms of revenue it’s not the same as people attending in person.

Manufacturing

Manufacturing activities ground to a halt, not just because of the restrictions but also because of supply chains that were severely disrupted.

Restaurants

(Source: getstencil)

Hospitality ground to a halt. However many quickly became delivery-only, which has hopefully helped.

Retail

High streets were already in dire straits, and the pandemic has only compounded issues.

Many moved operations online, but the lockdown has still had a devastating effect on the likes of Cath Kidston, Cafe Rouge and Bella Italia.

Travel & Tourism

(Source: getstencil)

Airlines, hotels, agents, tour operators – anyone connected to travel and tourism has seen their revenue dry up. Big hitters like Virgin Atlantic and British Airways are feeling the pain.

As restrictions start to ease this month, the hope is that this kicks off the recovery process.

Impact of Coronavirus Pandemic on the Payments Sector

In the course of the coronavirus pandemic the world we knew has changed beyond recognition.

This has had a significant impact on the Payments sector, and resulted in new trends and unintended consequences.

Here are a few:

Should Businesses Be Expected To Work For Free During The Pandemic?

The first is the expectation that products and services should be available at no cost, or at the very least with a sizeable discount.

Now, I understand that many of us are in dire straits when it comes to our finances and disposable income, what with the economy being shut down for two months and counting. But what chance is there of a recovery if the few businesses that can operate are unable to pay their teams?

Is it acceptable for more people to depend on the government?

Colonel Tom Moore (Source: bbc.com)

Here’s an example of what I mean. The incredible Colonel and recently knighted Tom Moore – who’s one hundred years old! – raised more than £30 million for the National Health Service doing a fundraising walk in his garden during lockdown. He used Justgiving’s online platform for it, but the company has come under fire for taking a percentage of what he raised in fees. Even the Prime Minister weighed in.

Why should the company face a backlash? The fees cover operating costs such as wages for 150 staff, and includes bank processing fees which it has no control over.

It’s unfortunate that their specialty in processing large volumes in payments is so undervalued. Surely critics don’t want the task performed by elements who lack the necessary accreditation and knowledge to do so?

I don’t subscribe to profiteering – especially not in the middle of a global pandemic. But surely where businesses can work and get paid, they should?

More Refunds In the Travel and Leisure Sectors

Another consequence of the pandemic on Payments will be an increase in refunds requested by customers, and the subsequent increase in related exceptions processing.

(Source: getstencil)

Customers who have booked flights and holidays don’t appear to be getting much in the way of good service. When things go wrong, whether self-inflicted or matters outside your control as a business such as a global pandemic, positive and proactive engagement with customers is the recommended and best course of action.

Unfortunately, customers have reported not being able to contact airlines, travel agents and others in this space, refund requests rejected and being strong-armed into accepting credit vouchers instead.

Since these businesses have prioritised issuing vouchers instead of refunds in a bid to survive, customers are waking up to their rights under Section 75 of the Consumer Credit Act of 1974 which protects credit card purchases.

As long as the transaction amount is over £100 but less than £30,000, any customer with a cancelled holiday can make a claim, since the Act makes the card provider and retailer jointly liable if a product is faulty, not delivered, fails to match the advertised description, or the retailer stops trading.

Growing dissatisfaction with the industry, coupled with customers’ genuine need for funds during this period means we are likely to see more of them go down this route.

Note: While refunds are not the same as chargebacks, there will be an increase in those too.

Rise In Contactless Payments

I’m usually an advocate for cash, but I haven’t touched it since the outbreak.

And I’m not alone: the use of contactless payments has jumped by 40%!

Card providers quickly responded to the demand by increasing the spending limit on contactless card payments from £30 to £45 from 1st April, which has helped customers complete many purchases without having to handle notes and coins, or input a PIN.

Making the Case For a Cashless Society?

And as more people use contactless cards more frequently, cash use has dropped.

(Source: getstencil)

There has already been a significant reduction in the infrastructure around cash as a payment method; could this drop further build the business case to continue down that path?

I hope not. Many use and prefer cash for various reasons, and let’s not forget that for a significant proportion without access to banking, it’s their only option.

Cash is crucial to facilitating and maintaining financial inclusion, and must not be removed from the landscape as a payment method. It has to stay available and affordable.

More E-Commerce Transactions

We’ve all been stuck at home on lockdown with nothing to do other than exercise, homeschool if you have children, bake banana bread, make TikTok videos…

…and shop online. According to The Wall Street Journal, some countries have experienced a soar in e-commerce transactions have increased by as much as 81%.

Retailers with sleek, efficient supply chains and distribution channels have reaped a return on their investments (I see you Amazon), while those who have not kept up with the times in that regard must be kicking themselves.

It means that payment processors, acquirers and gateways are seeing more traffic than ever come through this channel, and it goes without saying that their infrastructure and back office functions must be robust enough to cope with the increase in volumes.