Purple spiral

Analysis

Consumer products M&A update: Q1 2020

With the country forced into work from home setups, e-Commerce and essential retailers are becoming increasingly important. Consumers at the same time are prioritizing comfort at home and staying healthy during this period of time. This consumer products mergers and acquisitions (M&A) update provides Deloitte Corporate Finance LLC market data analysis that shed light on M&A trends in the consumer products industry.

Consumer products and retail trends

  • E-Commerce takes over:1 While many businesses are doing their best to market products online, it has been the 100 percent web-based businesses and brands that have truly seen their demand skyrocket. In North America, the number of online orders for web-only retailers were up 52 percent YoY in the last two weeks of March.
  • Apparel dresses down:2 Luxury apparel companies are doing their best to adapt, but are seeing the effects of the virus on items that would not show up in a traditional teleworking call, such as pants, shoes, etc. Casual clothing companies are seeing additional demand for their products, including leisure and athleisure brands that now transcend the typical boundary of office and home wardrobe.
  • Home improvement:3 People spending 24/7 at home has led to a boom in “fixer-upper” activity, as homeowners now have limited outlets to occupy their attention besides their immediate surroundings. Non-typical “essential” retailers are becoming increasingly important as demand for smaller home decor products skyrocket. Home Improvement retailers have also seen a boost for outdoor furniture and equipment, as consumers look to maximize and invest in their limited available outdoors space.
  • Health and wellness:4 The COVID-19 pandemic has resulted in a renewed cautiousness about health, prompting consumers to incorporate healthy tendencies to many areas of their lifestyles. From food and beverage choices to wellness supplements, more consumers are taking care of their bodies to help fight infection and stay healthy during this period of time. While sanitation products and medical supplies held the initial clamor of consumers’ shopping carts, many consumers are taking on long-term changes as they look toward maintaining health post-pandemic.

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References

1 “Online Buying Soars as Coronavirus Spreads Around the World” DigitalCommerce360, 8 April, 2020.
https://www.digitalcommerce360.com/article/coronavirus-impact-online-retail/, accessed on April 15, 2020.

2 “Coronavirus Shopping Trends: 8 Popular Product Categories Right Now.” Criteo, 8 April, 2020.
https://www.criteo.com/insights/coronavirus-shopping-trends/, accessed on April 15, 2020.

3 “Coronavirus: Fitness, home improvement may rebound quickly, data suggests.” Yahoo Finance, 16 April, 2020.
https://finance.yahoo.com/video/why-fitness-home-improvement-sectors-184052570.html, accessed on April 15, 2020.

4 “Nielsen: Coronavirus has CPG Shoppers Changing Their Ways” Supermarketnews, 11 March 2020. https://www.supermarketnews.com/issues-trends/nielsen-coronavirus-has-cpg-shoppers-changing-their-ways, accessed on April 15, 2020.

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