Fast rising costs, supply chain issues and business concerns around passing on costs to consumers’ whose preferences are constantly changing is putting pressure on already pressurised businesses. How are businesses adapting their models to match the current market and changing with the consumer in the hope of future proofing themselves?
In an interesting survey conducted by Barclays Corporate which polled 605 businesses during April, and report written by Mike Saul, Head of Hospitality and Leisure,Barclays Corporate reveals that many businesses are seizing opportunities to sustain profits despite fast-rising costs. Some businesses are keeping on top of customers’ changing preferences – sometimes transforming their business models to match.
According to the report, “almost one in three restaurants, for example, continues to diversify by introducing homedelivery options, such as meal kits. This is a pandemic trend that is being sustained by independent and premium outlets such as Six by Nico, in competition with direct delivery services such as Gousto and Hello Fresh.
Local, sustainable, healthy Restaurants and B&B/self-catering apartments are also strong adopters of the growing trend for locally-sourced products. Some 25% of these businesses have introduced new local ranges since the pandemic. Moreover, 35% of restaurants have also launched new vegan and vegetarian ranges. Businesses in the South West (28%) and the West Midlands (24%) currently report the fastest-rising demand for plant-based products.
One-third of pubs (33%), and 23% of businesses overall, say they have introduced more sustainable products. In fact, when asked what lesson they had taken from the pandemic, the most commonly cited (32%) was the central nature of sustainability to future business success. Health-themed services continue to be important, too. Spas unsurprisingly lead in this area, with 33% introducing new products, alongside cafes (31%), gyms (30%), and restaurants (29%).
As consumers embrace opportunities to indulge themselves after the pandemic, 26% of businesses report a higher demand for premium products and services. This trend to seek out upgraded accommodation or other higherquality experiences is especially noted in the East Midlands (34%) and the South East (31%). A quarter of businesses (25%) have introduced premium product ranges. Nightclubs lead the way (37%), while 33% of restaurants and cafes have adopted this strategy.
At the other end of the scale, 26% of businesses are seeing more customers opt for value products as rising costs start to limit disposable incomes. Of the hotels surveyed, 28% have introduced value packages, perhaps reflecting this sector’s relative lack of confidence in growth potential.”
Being adaptable and in touch with the consumer and understanding their needs is more important than ever before. Rigid business models do not look to be sustainable for the future and with so much change still predicted for the future, it seems that the need for flexibility and innovative thinking will continue to be a necessity for all business models.