M&D Survey: Pandemic Is Temporary, Behavior Changes Are Permanent
On Sep 27, 2021
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While masks will be coming off, the rippling economic effects on global supply chains and consumer behavior unleashed by the crisis will remain and will continue to disrupt the manufacturing and distribution industry. The pandemic has ushered forth a set of permanent changes that will likely be associated with faster reshoring of manufacturing to North America, realigned global supply chains, stepped up e-commerce market share gains, and a two-nation chase for global supremacy that will likely reshape American trade and investment policy.
Citrin Cooperman’s Manufacturing and Distribution Practice team conducted a survey of 200 senior leaders of manufacturing and distribution companies across the nation to take a measure of the health of their businesses and stock of future priorities, concerns, and challenges. There were three big takeaways from the 2021 survey: new product and service offerings, a shift to e-commerce, and the Amazon effect.
New product and service offerings are the main story for 2020 and beyond. More than half of the respondents implemented new products or service offerings due to COVID-19 – most of these businesses expect to continue the new product or service beyond the pandemic.
Disruption in the global supply chain and new constraints has caused more diversification of suppliers, outsourced manufacturing, and reshoring to the U.S. The shift to e-commerce is no longer a trend, it’s a landslide.
We reported in our 2020 survey that financial success is highly dependent on the ability to implement and sustain an e-commerce platform. This year, the majority of executives report that online sales make up half to three quarters of their sales and 69% of them utilize Amazon.
There may come a time when America’s economy will be associated with faltering stimulus, higher taxes, inflation, and interest rates, an even more massive national debt, and an ongoing shortage of people willing to engage the labor market. While there is cause for concern, our findings indicate that 2021 should be a year of strong progress for manufacturers and distributors alike – and the average manufacturer is likely to experience strong demand for products into 2022 and beyond.