|Covid-19 Framework||Channels, Consumers, Alliances & Partnerships, Ecosystem Collaboration, Resilience Models, Business Models|
After several weeks of store lock-downs, and only very gradual store reopenings, the impact of COVID-19 on consumer goods businesses is becoming increasingly clear. Apart from the immediate downturn in revenues, the crisis has driven structural changes to the way consumer goods markets will function going forward, with major implications for company Profit and Losses (P&Ls).
Consumers have step changed adoption rates in the online channel — the result here has been a massive and adverse structural mix effect, impacting in the short- and long-term not only a manufacturer’s top line, but also gross profit rates. Oliver Wyman analysis points to a major shift in consumer demand towards relatively lower-priced products in online consumption. If this shift persists, consumer goods companies could well suffer an enduring loss of two to three percentage points in relative gross profit. These trends represent major threats to profitability, and even long-term viability. This article provides ten imperatives for consumer goods companies looking to manage the ongoing COVID-19 upheaval successfully.
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