5 Retail Niches Most Impacted by COVID-19

Retail niches

There’s no question that the COVID-19 pandemic affected the retail industry. Here are five niches most impacted by the health threat — in positive and negative ways. 

1. Travel 

Once-bustling airports became eerily quiet during the coronavirus crisis as national leaders imposed bans and authorities said people should only travel for essential reasons. Airport terminal buildings commonly tempt waiting passengers with duty-free alcohol, luxury accessories, books and more. 

With airport activity plummeting, so have sales at those shops. For example, WHSmith lost 60% of its value recently. That brand operates hundreds of airport convenience stores in Britain. 

Retailers selling specialty travel goods have also suffered. People can’t indulge in leisure travel now, and the prospect of enjoying it again still seems so distant that it’s hard for them even to feel excited about planning vacations. Sales for luggage brands have fallen as much as 90% due to COVID-19. 

However, some pivoted to stay afloat. For example, Samsara Luggage released an “essentials kit” containing items such as disposable gloves, a reusable mask and hand sanitizer. 

2. Groceries

Grocery brands got mixed results during the pandemic. In its earliest stages, people swamped supermarket aisles in search of toilet paper, soap and nonperishable foods. As the virus persisted, many shoppers decided they did not want to deal with the hassles of shopping in stores for their essentials, especially as brands put new safety measures in place and infection numbers climbed. 

Online grocery retail soared during the pandemic. In 2019, e-commerce food shopping represented 10.5% of the market. However, that figure climbed to 27.9% during March and April 2020. 

Moreover, many shoppers bought products such as fresh produce and meat, refrigerated dairy, and frozen goods for the first time online in 2020. Before the pandemic hit, people frequently perceived online shopping as something they may like to try. However, during COVID-19, they saw it as a necessity. 

3. CNC Manufacturing

Computerized numerical control (CNC) manufacturing involves producing goods with machines that respond to specialized software commands and codes. That industry is another that saw varied outcomes due to the pandemic. 

For example, many people started working from home for the first time, causing increased demand for products like computers, smartphones and wireless earphones. Accordingly, components like CNC-machined heat sinks saw production gains

However, CNC manufacturers also make pins, pistons, rods and other parts used on oil rigs. Some analysts expect the demand for oil to fall, particularly with more people staying in their abodes and avoiding nonessential trips. 

All manufacturers have had to adapt to keep people safe during COVID-19. Fortunately, the transition apparently went well for most. A survey found that 77% of manufacturers rated their companies a four or five on a five-point scale for measures put in place to retain safety and productivity during the pandemic. 

4. Home Fitness Equipment

As the pandemic forced gyms to close, many people decided there was no better time to start or improve a home gym routine. That’s especially true since the virus — which spreads through contaminated surfaces and droplets expelled as people speak or breathe — could thrive in a gym that did not take the proper precautions to curb it. 

According to one source, the fitness equipment market grew 170% due to the coronavirus. People who were already considering making purchases decided to accelerate those buys. Those who ordinarily would not invest in exercise-related items decided there were plenty of reasons to change their minds. 

Peloton, an exercise bike brand, was also one of the few retailers to excel during the pandemic. Its first-quarter sales more than tripled in 2020, and executives expected a first-ever billion-dollar quarter during the holiday season. However, Peloton experienced difficulties, too. COVID-19 led to delivery delays and slowdowns in its production facilities. 

5. Apparel

Individuals drastically reduced their in-person socializing during the pandemic. Conferences, birthday parties and cocktail nights got canceled or moved online, and people rescheduled their weddings or decided to get married without guests. 

Many people also did not see the point of buying new clothes — whether for work or leisure — when staying home so much. That’s why apparel store sales fell by 66.6% in March-May 2020 — even more than sales at bars and restaurants. 

A related issue is that sales of denim plummeted during COVID-19. In contrast, people bought more comfy garments, like sweatpants. That’s likely because people could not justify buying new jeans unless the old ones no longer fit or were severely worn. After all, tools for video calling typically only show a person’s top half anyway. Why not wear soft, stretchy bottoms instead?

Challenging Times Ahead For Many Retail Niches

This list shows that not every retail niche suffered due to the coronavirus. However, even those that succeeded did not enjoy hassle-free operations and healthy sales. 

No one’s sure what the months ahead will bring, but flexibility and a willingness to adapt will aid today’s niche retailers.

Credit: Devin Partida is a retail writer and blogger. You can read more posts from Devin at ReHack.com, where she is the Editor-in-Chief.