senior client partner
This Week in Leadership
In a sign of mounting concerns over high-tech employee tracking, some states are preemptively banning even untried measures.
The fear of another pandemic wave still lingers. But for many consumer products companies, the fall air smells of opportunity.
This summer, consumers spent a ton of money on pools, outdoor recreation, and home improvement products, leading to big sales gains for companies in those sectors. Now, the weather may be getting crisper, but analysts expect sales for many consumer brands to stay, if not hot, at least pretty warm. They believe the big brands have regained much of the momentum they might have lost in the early part of 2020 when the pandemic first spread across the world.
To be sure, the retail industry is still plagued with firms suffering steep losses. But the surprising optimism for other players was obvious this week when Nike, the sporting-goods giant, crushed market expectations on its latest earnings report, which included an 82% growth in digital sales. Meanwhile, a majority of retailers recently polled by Korn Ferry said they expect holiday sales this year to be flat or slightly up from last year, a sentiment almost unthinkable just a few months ago.
“Retailers are feeling positive about the cold weather coming,” says Craig Rowley, Korn Ferry’s global practice leader for the consumer sector. He cites three factors that are leading to a better outlook: people are still working from home, they are likely to spend less money on travel and going out to eat during the fall and winter months, and pay cuts are starting to be restored.
Nike and Lululemon, for instance, are benefiting from increased sales of sweats, yoga pants, sneakers, and other athleisure wear to fit the work-from-home lifestyle. Peloton sales are exploding as people opt to work out from home instead of the gym. And Rowley expects television manufacturers and video-game and streaming-video services to have a strong fourth quarter as people look to buy bigger TVs for in-home entertainment.
But that doesn’t mean the next few months will be clear sledding. Nathan Blain, a Korn Ferry senior client partner and the firm’s global leader of organizational strategy and digital transformation, says inventory and funding challenges still remain, making growth scarce. He also notes that with consumers still leery about going to stores, organizations without a strong digital connection to consumers won’t be able to capitalize on the upturn. Moreover, Blain says that many companies missed an opportunity to define their values better and attract new customers through the pandemic and civil unrest by articulating the brand’s role in their lives. “You will see those misses show up in revenue numbers this quarter and every quarter after,” says Blain.
Which companies end up benefiting most over the next few months may depend on how they were positioned with consumers before the crisis, says Zach Peikon, a principal in Korn Ferry’s Marketing Officers practice. “No one is expecting any home runs, but the hope is for a lot of singles and doubles,” Peikon says.