What’s ahead for the UK consumer goods industry in 2021 and beyond?
By Sarah Wood | 26th February 2021
"The biggest risk is doing nothing. The world won't return to what it was."
That's the message from a webinar from Cheltenham-based accountancy and business advisory firm Randall & Payne yesterday (25th February), looking at the future for UK consumer brands in 2021 and beyond.
Partner Will Abbott and business consultant Paul Drabble talked about the sectors which have been hit hardest by the pandemic - retail, food and drink, and hospitality - as well as the supply chains which serve them.
Paul said: "We are in a more optimistic position now, but there is still a long way to go for the sectors which were hit hardest. It will probably be three to four years to get back to where we were pre-pandemic."
But it's far from all bad news. The pandemic has created new opportunities, especially for flexible businesses which are able to adapt quickly to changing customer demand and behaviour.
Paul continued: "Every aspect of consumer life has changed. There are new opportunities and a lot of space for growth. The fast movers are moving in, there will be a new flood of entrepreneurs. Competitive pressures will grow quickly because of consumer change. A new business model will need to come out of this."
If you're not convinced that 2021 is the right time to launch a new business or new products, Paul Drabble reminded webinar delegates that businesses which invested during the 2008 financial crisis outperformed others. Big hitters which were born at that time include Airbnb and Fitbit.
But he said it was essential to target the right market.
"Don't look at the whole market. Segment the market and focus on the customers you want to attract and what they want. It doesn't matter how big the sector is, it can make money if you target it properly."
Key areas to focus on are millennials (aged 23 to 37) and Generation Z (aged 16 to 23).
Paul continued: "Both are very influential in many sectors and on how the market will grow and develop in future. The ethics of this market include sustainability and how companies treat their employees."
When targeting a particular market and the growth opportunities it offers, it is important to be aware of the level of the competition there.
"Health and wellness is a boom sector. But more competitors are coming through and more competition will put pressure on prices.
"Be agile and flexible to change with market conditions and stay ahead of the competition. Being the first to move is an advantage when selecting which market to grow in."
This applies to most sectors in consumer goods, including food and drink, clothing and beauty.
All being well, the high street is set to reopen on 12th April, but businesses can't expect instant footfall and sales.
Paul continued: "As the high street reopens, nothing will be normal. We still have the effect of the virus. Social distancing and face masks will impact footfall. Many consumers will still be nervous of crowded places.
"Many shop closures include the brands we've all grown up with, like Debenhams. Is this the end of retail tradition as we know it?"
But he said that the changes bring new opportunities. While everyone is shopping online more than ever, it lacks the engagement and emotion of high street shopping.
He continued: "The high street is a blank canvas of new retail space. We need to create engagement and a relationship with shoppers. Appealing to all senses encourages more people to buy.
"A hairdresser could turn into a spa experience, with a nutritionist on site, to create a complete holistic health experience. You don't have to build all the skills yourself. Bring in partners to make it work."
Businesses which are determined to grow in the coming years need to look to the future and their staffing, to ensure they have the right talent in the right roles. And Gloucestershire is a very good place to find that talent.
Paul said: "We've got some great role models in the county, like Dale Vince and Julian Dunkerton. We need to use them to inspire the next generation and we need to do more to encourage young talent and keep it in the county economy.
"Gloucestershire has some great schools and we need to harness that talent and creativity. Don't lose it to other areas of the country!
"Millennials and Gen Z are hungry to learn. They are tomorrow's managers. Focus on succession planning and keeping them in the business. Investing in your staff is good for staff retention."
There is certainly a light at the end of tunnel in 2021 for consumer businesses which are willing to look for it and make it work.
Copyright 2021 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.