Interesting insights from the CSO on some impacts of COVID19 pandemic on general population: https://www.cso.ie/en/releasesandpublications/ep/p-sic19eep/socialimpactofcovid-19surveyjune2020asnapshotofexperiencesandexpectationsinapandemic/.
The following are of significant medium and long-term concern:
- Health impact 1: 40.9% of all respondents to the survey report increased body weight since the start of the COVID19 restrictions, against 13.7% who report weight loss.
- Health impact 2: "49.0 of newly labour inactive respondents (those in employment before the onset of the COVID19 crisis and currently not working) reported an Increase in weight. This compares with 37.6% of respondents that are currently working."
- Health impact 3: The above health effects are most likely primarily driven by stress. For example: "Analysis of weight change by household composition found that a higher percentage of adults living in households with children reported having gained weight (47.5%) when compared with adults living alone (35.2%)." Given that households with children faced the pressure of not only own lockdown-related factors, but also the burden of caring for children and the pressures of home-schooling, changes in the health status are likely to be signifcantly driven by stress.
- Precautionary savings: "Of respondents that reported reduced expenditure and/or an increase in income, just over half (51.1%) said that they have/will put additional money into Savings."
- Workplace: Of the respondents who reported as working from home, 19.6% stated they do not have adequate work space and/or equipment. "Almost one in five (18.5%) respondents reported being Very or Extremely concerned about their employer’s ability to provide a safe work environment in the context of COVID-19."
What does this mean for business? Some thoughts:
- We are likely to see stronger focus on health and well-being when it comes to consumers voting with their Euros in months and years to come. Smaller, natural and sustainability-focused brands are likely to have an opportunity space as long as they can maintain value proposition.
- The above also supports increased demand for personalisation of goods and services being supplied to consumers, a trend that will accelerate should COVID19 restrictions persist or even re-accelerate.
- Financial implications of COVID19 will reinforce workplace and brand effects: as consumers return to work, they will increasingly demand greater safety and more direct engagement with their employers and brands.
- Production processes will shift toward ensuring tighter control and quality delivery by the brands, which means that co-manufacturing and outsourcing will be less favoured by consumers than in-house production.
- Direct-to-Consumer channels of sales will become more important, as they provide greater assurances to consumers of quality, provenance and ESG-impacts attributes of their suppliers.
- On investment side: organic cash flow-funded investment will become more important in years to come. This will be driven by greater preference amongst retail investors for liquidity and by the re-discovery of the need for cash-based safety buffers amongst the companies. Low cost of funding in the bonds markets and in the banking channel will also disfavour households shifting out of their precautionary savings accumulated during the pandemic.
I am sure there will be other disruptive factors at play as well.
