Episode #2 - Stay At Home
How the COVID-19 pandemic is shaping society and presenting new opportunities.
Welcome to the second edition of The Ideas Digest. I realise that episode #1 only went out yesterday, but I wanted to send out another episode to thank everyone for their support thus far. Going forward, episodes will most likely be sent weekly, but I haven’t got this newsletter fully worked out just yet. I welcome all feedback, positive and critical, so please don’t be shy about reaching out to me.
Thanks to the COVID-19 pandemic, the year 2020 is going to go down in the history books as one of the worse years on record. Life as we all know it has been turned upside down onto its head.
Let me prefix this by saying that I think the pandemic is terrible and I acknowledge all of the lives lost and affected by this highly contagious respiratory virus. However, the pandemic has presented new problems and opportunities.
Going forward even after a vaccine is made available and countries begin to return to normality, the way we interact and go about our lives has now been forever changed.
📒Research
In all of the following research, you will notice a recurring theme, people staying at home and relying on technology even more than they already did prior to the 2020 pandemic.
Demand for food delivery services continues to grow
Statista reports that an increase of over 20% for Online Food Delivery in the United States for 2020. A large segment of users of food delivery services is those in the millennial age bracket accounting for over 30% of users.
HelloFresh the German-based home meal kit provider saw sales almost double in 2020 due to the ongoing COVID-19 pandemic coming in at 75-95%. This was probably fuelled by people not wanting to venture outside and the food shortages caused by panic buying making access to basics more difficult.
Streaming services see a massive spike in consumers (and profits)
Surprisingly not surprising is that Netflix has reported strong growth and profits thanks to the COVID-19 pandemic. Netflix reported almost 16 million new signups in the first three months of 2020, which is almost double the number of signups it saw at the tail end of 2019.
Spotify has seen similar levels in growth, growing its user base by 29% as reported in its Q2 2020 earnings report as well as a 27% increase in premium subscribers (paid) while reporting a drop in advertising revenue. The company saw unprecedented growth during the pandemic.
Unprecedented demand for masks
Continuing the, “well duh, that’s obvious” train demand for masks is unprecedented as people scramble to protect themselves and others from the highly contagious novel coronavirus. 3M has seen a nice boost to its profits due to the demand for N95 face masks and being one of the largest N95 masks producers in the world.
Tourism takes a freefall
In a May 2020 World Tourism Organisation report, international tourism numbers could drop to 60-80% over the entire year, with quarter one already seeing a drop of 22%. It’s probably not a surprise that tourism has been the most affected industry during the pandemic.
QR codes are finally catching on
QR code usage in the USA and countries other than China (where QR code usage has been the norm for years) is on the rise as restaurants, cafes and bars move away from physical menus towards digital menus you access on your phone using your camera pointed at a QR code. For years, many have tried and failed to get people to adopt QR codes, this is finally their time.
Working from home
Working from home is the new normal. In an OwlLabs report, Are Companies Prepared to Work From Home? — 31% of people in the report said COVID-19 was the catalyst for them being allowed to work from home. 80% of people said they were happy working from home.
A Gartner research bulletin dated 2 April 2020 revealed 74% of companies planned to shift to more remote work post-pandemic.
COVID-19 is having a negative effect on mental health
Lockdowns, restrictions, unemployment, constant exposure to negative news and other stress-related factors are affecting our mental health. Data from the CDC paints a bleak picture for young people in particular who appear to be affected by the pandemic more-so than others.
🔎Opportunities
Face masks are traditionally very plain looking and ugly, so it’s not surprising that a number of people have seen an opportunity to start producing their own masks. There are quite a few Shopify stores selling masks, even Redbubble allows designers to upload their own designs and sell them on face masks.
Streaming service fatigue is real. In a Deloitte report on digital media trends, it found that 47% of US subscribers were frustrated by the growing number of content streaming services. Almost half (49%) said the amount of content made it hard to find something to watch.
Lockdowns and isolation are a boon for virtual reality. For years people have been predicting virtual reality would take off and admittedly, it the uptake has been slow. The pandemic is driving people to new ways to escape from their bleak pandemic realities. Sadly, there are hardware shortages on VR headsets including the popular Oculus Quest headset.
The COVID-19 pandemic is also forcing music artists as well as festivals to get creative, virtual concerts and events are becoming the new norm as restrictions mean venues close or operate at a limited capacity. In April 2020, Travis Scott held a virtual concert in the game Fortnite which has over 12 million viewers. Glastonbury also held a virtual event as well.
Remote fitness is a massively growing segment. People can’t easily get to the gym or go outside and exercise, so companies catering to the stay-at-home exercise crowd are experiencing growth. Mirror is one of the leaders in remote fitness right now.
In Q1 of 2020, Apple shipped 7.6 million smartwatches, a 23% increase compared to Q1 2019. Despite the fact people are holed up in their homes, fitness-oriented watches are still a growing segment and big business.
The mental health of many (young people especially) has been massively impacted. How can people get access to mental health resources and manage pandemic-induced stress? Meditation, telehealth, an app that lets you talk to a digital friend. Solutions exist, but are they accessible and effective enough?
Some people are struggling to work from home, the lack of warning and preparation of space meant people had to rush to Ikea and other stores to make impromptu workspaces. The working from home honeymoon is wearing off for many, how would you make it better?
🧐Observations
Staying at home is no longer a perk of hipster-esque tech companies
People are looking for new ways to consume content (video, audio) and no matter how saturated the streaming market is, people are on the lookout for fresh content
Eating at home will be the more popular option as restaurants and venues remain closed, at least until the pandemic is under control
Not everyone has a fast and reliable internet connection at home
Office space can be an issue for some who had work from home sprung upon them, some businesses have allowances for creating workspaces
No contact will be the new normal as things like restaurant menus and self-serve condiments will become a thing of the past
Gyms will still exist, but remote fitness is becoming a lot more popular. Gyms are starting to adapt, offering remote fitness programs, personal trainer consultations and monitoring. Fitness and diet apps are growing in demand.
People are scared, they are stressed and continually being exposed to negativity. Coupled with rising unemployment, it’s a recipe for disaster for the overall health of our population.
💌In Summary
As people are confined to the walls of their homes, it is no surprise that streaming services have seen immense growth in 2020. People are having to entertain themselves at home, they’re having to cook their own food (or order out through apps like Uber Eats). The recurring theme during this pandemic is digital consumerism has exploded and will continue to explode into 2021.
Social distancing and limited contact are also recurring themes for 2020. PPE (Personal Protection Equipment) such as masks, gloves and hand sanitiser are also big business. And who can forget the great toilet paper shortage of 2020 as well? The handshake is all but dead for the foreseeable future.
If you are exploring new startup or side hustle opportunities, tapping into the armchair consumer economy (if you can find the right niche) could be very successful. Furthermore, there are numerous opportunities in remote health as people try and stay fit during extended periods of isolation.