Thriving business sectors and trends for 2021

Business

21 January 2021

2020 was a year that no business could have predicted or fully prepared for, even with the most thorough disaster recovery plan in place. At the start of the pandemic no one knew what the full impact or longevity of the Covid-19 virus would be. Although many businesses and industries have been adversely affected to say the least, there are plenty that have seen growth and are predicted to continue as thriving business sectors in 2021 and post COVID-19. With the UK now in its third national lockdown since March 2020, the working day has seen a considerable change for many in comparison to pre-COVID-19 times. Gone are the long commutes, traffic jams, train delays and braving all weathers to get to the office – a welcome change in the working day. Working from home has become one of the consistencies of the pandemic. A huge knock-on effect of the pandemic has been a loss of social interaction, whether that be with colleagues, friends or hobbies and extracurricular activities. With many of us spending more time at home than ever before, companies have been quick to respond and cater for work and social needs virtually. Here is a summary of just a few of the thriving business sectors in 2021 that have seen pandemic growth: Video apps It is no surprise companies in this sector have seen exceptional growth. Microsoft’s Teams app is the fastest growing app in the company’s history, it saw a 70% uptake across a 6-week period in 2020. Tech providers recognised the opportunity and fast-tracked development in video conferencing to meet the instant demand the pandemic created. Collaboration software Collaboration is now key to video conferencing apps to not only streamline the possibility of a hybrid working model for many companies, but to create an in-office experience regardless of location. Likewise, a focus on collaboration will be key to many other business tools, such as CRMs, sales platforms, and other data management systems. E-learning The online learning sector was already growing prior to the pandemic. Software and systems to enable teachers to educate children remotely, as well as providing parents and carers the tools they need to home-school has sped up some developments. It is not only schools and universities creating this demand, home study for academic and non-academic courses is on the rise. The pandemic has provided the opportunity for many to learn, upskill, re-skill and gain new qualifications, or simply to try something new for leisure purposes. Cybersecurity Unsurprisingly a high growth sector, with many businesses now reliant upon digital tools to stay connected with employees and clients, this sector is set to see significant investment. Research shows many companies plan to increase their spend on cybersecurity since the pandemic to reduce their risk of loss. E-commerce Like cybersecurity, ecommerce is expanding for the same reasons. Businesses and consumers are having to adapt to online channels for sales and purchases more than ever. Challenger banking Fintech innovation in recent years has disrupted the traditional High Street bank and financial services. The popularity of card-less app banking and digital services has been accelerated in lockdown, and investment in the sector is still going strong. In fact, January to November last year £787m in funding was raised in the UK between 18 challenger banks. 77% of this funding went to the top three – Revolut, Monzo and Starling. Healthcare and pharmaceuticals This is a sector where healthcare professionals have a higher confidence in their industry and employment prospects over the coming years than the UK average. A global pandemic has driven people to become more health conscious and interested in health products than ever before. The world has had eyes firmly on the pharma and biotech companies developing vaccines for Covid-19 and other diseases. Now is the opportunity for further innovation in this industry. Health and fitness The UK fitness industry is estimated to be worth circa £5 billion. The demand for home fitness equipment during the pandemic increased by 170% across the globe. Savvy fitness providers were quick to move their services online, with classes, PT sessions and more being conducted virtually. It is estimated that as many as one in five of us will quit our gym memberships for good. DIY Many of us have had to repurpose parts of our homes into more permanent office space, leading to some interesting DIY projects and trying to create zen-like workspaces. With many of us spending so much time indoors, bigger projects and even renovations have been tackled to make the most of our surroundings. More risky DIY projects are in hair and beauty home care kits. With salons closed sales of products like hair dye have surged, as well as online tutorials and searches on topics such as ‘how to cut your own hair’ (a word to the wise, never use a bowl as a template for a new haircut!).

In terms of trends for 2021, this can be difficult to forecast exactly, although there is some learning from previous economic downturns, recessions and financial crises that can be applied to certain sectors. There is expected to be a consumer rebound, in retail as well as other sectors such as travel and leisure. The term ‘revenge shopping’ is being used to describe the pent-up demand for spending when consumers have the confidence to do so. In countries that seem to be emerging from the pandemic, such as Australia where the virus has been largely controlled, spending on goods and services has seen an unexpected upturn. Surely a positive sign that much of the world will follow suit. The travel and leisure industry, although expected to rebound, may struggle to see the pre-COVID-19 volumes. Travelling for leisure is expected to be the biggest demand, both domestically and when world borders open and international travel is deemed to be safe. Although is it likely the industry will see the return of business travel in the same way?

Data shows that after a recession business travel takes longer to bounce back than travel for leisure. Indeed, after the financial crisis of 2008-09 leisure travel took two years to recover in comparison to five years for business travel. With all the recent innovations in remote working most businesses have adapted and seen the benefit of reducing business travel in necessity, time, and cost. This may never have the need to return to pre-pandemic volumes. However, on a more positive note, domestic business travel may see a bounce back, with some companies prioritising the value of face-to-face meetings, connecting with customers as well as conducting in-person sales. Whatever your thoughts on the impact of the pandemic, one thing is for sure - the world is changing. In many ways the global pandemic has accelerated innovations in technology and science, as well as provided opportunities for businesses to thrive and entrepreneurs to shine. Therefore, 2021 will be the year of change, or at the very least the transition period to that change.