The COVID-19 lockdown has caused steep global sales declines for most consumer products over the last six weeks or so. The impact has been evident across a wide swath of product categories, with the key licensed sectors of apparel, footwear, and accessories particularly hard-hit. There have been some exceptions to the rule, of course, notably toilet paper, hand sanitizer, disinfecting wipes, and non-perishable foods.
In addition to these lockdown necessities, several other opportunities for sales of licensed products have emerged over the course of the crisis, driven by consumers’ self-isolating lifestyles:
- Board games, puzzles, coloring books, video games, and other leisure-time activities. These were among the first categories to see a boost in sales as homebound consumers, both adults and families, looked for something to do to fill the time. Educational workbooks also give kids something to do while keeping them sharp, which was especially important during the gap between the close of the schools and the start of distance learning.
- Crafts and hobbies. Adults in particular have been revisiting hobbies they enjoyed in childhood, taking up things they have always wanted to try but never had time for, or increasing their participation in current hobbies as a way to reduce stress. Examples include baking (spurring sales of both gadgets and supplies like eggs and flour), crafts such as knitting (especially in the form of kits), musical instruments, and Lego sets, to name a few. Gardening is also on the rise as a way for consumers to get outdoors; some are even creating Victory Gardens to grow some of their own food. Meanwhile, the sharing of finished projects through social media has become a way for the hobbyists to connect with their community.
- Meal kits. This struggling category has seen positive trends as some consumers without well-honed cooking skills want to prepare more sophisticated meals at home and as others look for a bridge between the home cooking they must do and the restaurant meals they wish they were enjoying. Several of the leading purveyors of meal kits, including Blue Apron, Sun Basket, Purple Carrot, and Hello Fresh, have reported increased interest.
- Comfort foods. Feel-good products such as sugary cereals, chips, and frozen pizza, as well as childhood favorites like Chef Boyardee canned spaghetti, are all on the rise. Medical professionals have advised consumers to help ward off the virus by eating healthfully, and categories such as fresh produce have also seen sales increases, but the junk food has been particularly strong.
- Products tied to streamed entertainment. Streaming of TV, films, and other entertainment has spiked during the pandemic, and anecdotal evidence shows that tie-in products may be benefitting. Examples range from books linked to current and archival TV and film programming to plush tigers and fan-created merchandise driven by the popularity of The Tiger King on Netflix (which has not been officially licensed). Some new forms of streamed entertainment have popped up, too, such as marble racing as a replacement for live sports. Partnerships are starting to happen, with electric-car racing league Formula E launching a marble racing team in a deal with Jelle’s Marble Runs, the YouTube channel of choice for newly minted fans.
- Home fitness. Products to help consumers stay in shape while the gym is closed have seen holiday-level sales far exceeding the norm for this time of year. Smaller items like yoga mats and hand weights have been the focus, but major equipment requiring a bigger investment has also been performing well. Meanwhile, outdoor toys have experienced strong sales as parents try to get kids out of the house and moving, in a safe way. Online fitness courses are also seeing spikes in viewership.
- Apparel niches. Sales of clothing in general have plummeted. Consumers are not dressing up while at home and are holding off on non-essential fashion purchases due to economic concerns. That said, purchases of athleisure apparel have grown as consumers look for comfortable options for hanging around the house. And on the dressier side, Walmart has reported strong sales of tops as consumers want to look good—albeit only on the upper half of their bodies—for video conferenced business meetings and online hangouts with friends. Also driven by the need to look good on video conferences: sales of hair color, especially now that many consumers have gone more than a month without a stylist.
- Alcoholic beverages. Consumers seem to be drinking more wine, beer, and spirits during the pandemic. Many have been stockpiling alcoholic beverages in case of shortages, while others are buying due to an abundance of online happy hours. One brand of particular interest: Constellation Brands’ Corona, which some consumers initially thought was associated in some way with the coronavirus. Rather than causing a sales decline, however, the added publicity seems to have boosted sales so far.
- DIY projects for the home. Now is the time for many consumers to catch up on some of the smaller items on their to-do list, as well as to get crafty with home décor. Home retailers and e-tailers report strong sales of paint, removable wallpaper, hand tools, and other building materials and supplies. Many orders are small, as do-it-yourselfers focus on doable projects such as building a bookcase or wallpapering a small area, rather than a full makeover of a space.
- Products to support the new normal. Children’s books about handwashing, such as Andersen Press’s Little Princess: Wash Your Hands!, have experienced big sales increases. Craft supplies such as poster board and sidewalk chalk are being purchased to make signs of appreciation for medical professionals or upbeat “we’ll all get through this together” messaging. Meanwhile, as state and federal governments increasingly encourage or require the use of face masks or other protective fabric, consumers are buying both finished masks and material to sew face coverings for friends, family, hospitals, and assisted living facilities. Many are also seeking out scarves, bandanas, neck gaiters, balaclavas, and similar accessories as protective alternatives.
Many of these categories, from baking, to DIY and crafting, to puzzles and board games, were performing well even before the pandemic began. In other cases, such as meal kits, the crisis has proven to be a boon to their struggling businesses. The question is, can the latter turn this short-term interest into a long-term turnaround once things start to get back to some sort of normal, whatever that may look like?
Raugust Communications’ April e-newsletter goes out tomorrow, Tuesday, April 21, 2020. The Licensing Trend of the Month examines how live events are transitioning to the virtual world during the COVID-19 crisis and whether that will have long-term implications. The Datapoint research spotlight will take a look at licensed-product recalls. If you do not yet receive this free publication, you can subscribe here.