The Lasting Effects of COVID-19 on Consumer Goods Importers and Distributors

If the pandemic was unprecedented, so too is the aftermath. Especially for consumer goods importers and distributors. In the midst of COVID-19, there was an extraordinary consumption shock. It toppled what we formerly thought of as long-standing consumer habits. Everything has changed. Will things continue to change? Is this the new normal? Or will things revert back to the way they used to be?

Our prediction: it’s a little bit of all three.

How COVID Changed the Game

Before the pandemic, brick-and-mortar stores saw quite a bit of foot traffic. Ecommerce sales were very much a part of the shopping landscape and trending upwards. Folks were dining inside and outside without a care in the world. The consumer goods industry was pretty steady—sure there were ups and downs, there were tariffs and pricing wars, but nothing entirely disruptive.

Then, COVID-19 hit. I’m sure you can relate: I know where I was, the time of day and what I was doing when I realized the gravity of the situation. That this wasn’t going to be a quick, simple fix. It wasn’t going to go away after two weeks of staying at home.

This time last year, consumer spending was at a standstill. Toilet paper was absent from shelves, cleaning supplies couldn’t be found anywhere and communities were in hard lockdowns. People stopped buying things they didn’t need, fearful of what the uncertain future looked like. In 2020, US citizens, on average, saved 2.3x as much from 2019.

As the pandemic continued, companies transformed their business operations, consumers changed their behaviors and governments modulated their regulations. Alcohol companies created hand sanitizer, consumers were no longer brand loyalists in favor of buying what was simply available, and the government created mask mandates and social distancing regulations. We all shifted. Just like that. 

Some products were in high demand, and those consumer goods businesses thrived during the pandemic. One of our customers, Honey-Can-Do, a leading home products company, saw just that.

“With record numbers of consumers home during the pandemic, demand for home products has risen significantly,” said the company’s founder and CEO, Steve Greenspon. “However, many non-essential brick and mortar retailers were closed, and ecommerce was able to provide a tremendous opportunity to meet market needs. We were very fortunate to be in a strong position to fulfill the increased demand from online shoppers while diversifying from the much lower demand of non-essential retailers.”

For businesses like Honey-Can-Do who saw more business than ever before, they met challenges while trying to keep up with demand. A good problem to have, but a problem nonetheless. Others had to lock up their doors, unable to survive a particularly trying time.

How to Adjust to the New Normal 

Now things are starting to even out. Life isn’t returning to normal, or what we used to think of as normal. We’re entering into a new normal, creating a new standard. And we’re all waiting to see what’s going to happen.

As far as the consumer goods industry, we predict our new standard is going to have more drop shipping opportunities than ever before, brand loyalty will still be important but not as important as before, online shopping isn’t going anywhere, and quick delivery and/or pick-up will play a large role in consumer shopping habits.

Globally, 49% of consumers shop online more now than before the pandemic. The number is even higher for U.S. shoppers: 62%. This means that if you, as consumer goods importers and distributors, don’t have an ecommerce presence, now is the time to reconsider. And along those same lines, drop shipping to all these consumers is a must if you expect to remain competitive and profitable in the marketplace.

As far as accommodating this new sense of brand agnosticism, you’ve got to remain competitive. If your consumers aren’t coming to you for your brand name, how else are you going to get that traction and attention? Product innovation, pricing, quick delivery times, product availability? Take your pick.

It’s a lot to worry about—all these post-pandemic trends are changing the game. For good, too. So what do you do?

You make sure you have the right tools and technology to help you manage all these changes on the backend. And if you have the right tools and technology, reevaluate your processes to make sure you’re operating efficiently. If you don’t have the technology you need, we’re here to help.

How Distribution ERP Enables You to Rise to the Challenge of the Post-COVID New Normal

Our distribution enterprise resource planning (ERP) solution offers functionality for:  

• Managing drop shipping orders. When you get thousands of single-item orders a day, drop shipping success comes down to one thing: efficiency. Our software allows you to create processes to help you run a bit quicker, a bit smoother. To enable you to reduce the time it takes to pull product and pack orders, to bulk pull, to use one system for paperwork and labels, for slotting product, for automated data entry and handheld devices. To master drop shipping to your customers.

• Supporting an ecommerce presence. You need the right technology to successfully support both ecommerce and retail brick-and-mortar orders. And the ability to scale up or back when you need to—functionality that has never proved to be more valuable than in the pandemic.

• Product innovation. This is all about product lifecycle management—tracking the product from idea to completion and everything in between. With this kind of functionality, you can store all the data you need about each of your products, track what’s leaving the shelves quickly and what’s gathering dust and then make smart, data-driven decisions about how to move forward with each of your products.

• Inventory control. To make sure your customers can get the products they want when they want them, you’ve got to have the proper inventory on hand. Our distribution ERP is built for forecasting long lead times, demand planning, budget evaluation and leveraging historical trends—all of which support greater inventory control.

We’ll be the first to admit: our software can’t solve all your business problems. We have no control over consumer demand, over production timelines, over material costs. But it can do a heck of a lot to help you run a successful business despite all those challenges.

Ready to find out how our industry-specific distribution ERP, Aptean Distribution ERP, can help? Reach out, now.