Change in Market Trends During COVID-19

COVID-19 has changed everything from the lives of individuals to global market trends. Whether these changes are permanent or those that revert in time, remains to be seen. But there’s no doubt that the world will be starkly different from what it was before the pandemic hit.

For now, all anyone can do is be prepared for what comes next. That includes consumers and corporations alike. Yet, the long term implications of the pandemic are still unraveling slowly. Until the newly discovered vaccine curbs the spread of the disease, businesses can’t rely on much certainty in the marketplace. That’s why it’s essential to understand the current market trends as they unfold. Only then can organizations plan their strategies accordingly to survive in the unforgiving market conditions.

The following blog represents a snapshot of the changing market trends from both a consumer and a business perspective. But before we get to that, it’s important to understand how COVID-19 has impacted the world as a whole.

So let’s dive in.

Shift in Worldwide Markets

The shift in worldwide market trends is apparent. From financial markets to mainstream industries, everything is suffering dips and slums. Experts predict that these impacts are likely to last until 2021. 

Here’s a look at the five most important trends in worldwide markets.

• Plunging Stock Markets 

If there’s one thing you need to know about stock markets, it’s that they hate uncertainty. The more uncertainty there is in a marketplace, the more volatile the stock market will be. That’s why COVID-19 has wreaked havoc on the global economy with historically predictable stocks taking a dive.

As entire sectors close down amid rising infection rates, company stocks have taken a serious hit. This has in turn affected stock markets worldwide, including FTSE and the Dow Jones Index which suffered the worst quarterly drop in April 2020 since 1987. As a result, the central banks in major economies including the U.K. and the U.S. dropped interest rates drastically.

• Rising Unemployment

Quite expectedly, employment rates have dropped dramatically worldwide. Major industries such as oil and gas operate largely offline. That means lockdown restrictions impacted all workers employed in this industry. 

Developed countries such as Japan, Germany, the United Kingdom, Canada, France, Italy, and the United States reported increasing unemployment across the board, with the U.S. unemployment rate increasing from 3.4% to 10%. This wave of unemployment signaled an end to a decade of expansion for major economies across the world.

• Shrinking Travel & Hospitality Industry 

Among the industries hardest hit by the pandemic were the traveling and hospitality industry. According to one report, user interest in traveling and hotels dropped by almost 50% in March of 2020. This decrease in interest reflected the nature of the pandemic, with millions shut off in their homes and unable to socialize out of fear of infection.

International tourism decreased by 22% in the first quarter of 2020 while major airlines suffered a 50% decrease in revenues. Despite this, the industry did pick up in the middle of 2020 in the months of July and August. However, as most countries experience a second wave of COVID-19, it is likely that the industry is facing a prolonged lull.

• Thriving Pharmaceuticals

On the other hand, the pharmaceutical industry worldwide has experienced a surge unlike ever before. Giants such as Pfizer, Moderna, and GlaxoSmithKline are experiencing an increase in value as they fight to find a sustainable vaccine. 

It is imperative for governments to strictly regulate the pharmaceutical industry to ensure a fair production and distribution of the new vaccine. Yet, there is no doubt that the pandemic has provided a boost to the pharmaceutical industry that will last far longer than the pandemic itself. 

Shift in Business Culture 

Businesses have had to adapt as much as, if not more than, consumers during the pandemic. Organizational cultures have been challenged and continue to be reformed in light of new employee needs. Let’s look at some of the key shifts in business culture during COVID-19.

• Plummeting Employee Confidence

Before the pandemic, employees in the United States reported growing confidence in their organization. A vast majority of employees in the corporate sector felt appreciated and heard by their co-workers and managers. But this trend has taken a sharp turn during COVID-19.

Employees feel less engaged (no doubt due to remote working conditions), as well as less recognized and appreciated for their efforts. As a result, employees now have less confidence in their organization and their own abilities. 

• Holistic Organizational Impact

As a whole, organizations are facing a crucial shift in culture. COVID-19 has changed interpersonal relationships among employees as well as the way businesses interact with their clients. Data has a greater role in companies now that digital transformation is underway. 

Similarly, companies are rethinking how to utilize resources and personnel in a more flexible way. For some organizations, COVID-19 has galvanized much-needed change in a company culture that could pave the way for future success.

Shift in Consumer Sentiments

Finally, COVID-19 has had a significant impact on consumer behavior. As we shall explore below, consumers are now more concerned with their health and homes as compared to conventional trends. The longer this pandemic lasts, the more likely it is that consumers solidify these sentiments.

• Essentials on the Rise

The most prominent shift in consumer sentiments has been towards value and essentials. The early months of the pandemic saw a drastic shortage in essential items across markets. The United States in particular faced a shortage in essential commodities that impacted the consumer response to COVID-19 in major cities. 

Now consumers are prioritizing their health and the health of their loved ones above all. Search trends for ‘health’ and ‘home’ are up significantly while local businesses report great orders for the everyday essentials.

Thus, luxury and accessory brands struggling with a reduction in consumer demand need to reassess their value proposition. Moving towards a more sustainable and eco-friendly business model could be a start to getting noticed by consumers again.

• Wavering Loyalties

The pandemic is an unprecedented economic and social crisis in the 21st century. As a result, the shifting behavior of consumers is likely to persist moving forward. In fact, a McKinsey study found that 65% of consumers felt they would stick with new consumption habits post-pandemic. 

This should sound alarm bells for the luxury industry which has suddenly found itself undesirable. As people fight for their lives and strive to protect themselves from the disease, long-standing loyalties have been brought into question. Not to mention consumers are now more price-sensitive than ever. So high priced brands are now less desirable to the extent that consumers are moving away from them. 

• Increasing Digital Adoption

Digital adoption has been ubiquitous across the globe. Consumers and corporations alike have adopted digital means for communication. The skyrocketing stock price of Zoom Conferencing App is a testament to that fact. Yet, beyond video conferencing and remote working, consumers have come to terms with new tech trends. 

Particularly baby boomers who have been historically more technology averse than the millennial generation, are now learning to adopt the technology. Working from home is a significant landmark in the shift in consumer behavior to the digital landscape. In fact, remote working is likely to stick around even after the pandemic ends. 

Concluding Remarks

COVID-19 should hopefully disappear in the following months now that vaccines are on the market. Yet, the changes brought about by this pandemic are likely to last years if not decades. The ‘Next Normal’ is one that is going to be highly technologically advanced where digital interaction between consumers and businesses will be prevalent.