Although many traders will have suppliers they work with and rely on in person to keep their operations well-stocked, there is very much still demand to order online.
Between the global COVID-19 pandemic and myriad of supply chain issues of late, industries of all kinds have had to deal with setbacks and shifts in demand in ways that, just a few years earlier, nobody could have foreseen. But just what kind of effect have these seismic changes had on the products that so many businesses need to maintain continuity?
That’s exactly what we wanted to find out. By investigating products across a variety of different trade industries over the course of the past few years, we’ve created a clear, concise picture of how online trade industry demand has fluctuated in recent times – the results of which might come as something of a surprise.
Scroll through the findings below to see what we found…
Identifying fluctuating demand: How we did it
To find out how online trade industry demand has changed over the last few years, we took to Google to carry out keyword research on a cross-section of trade industry products. We paired these with additional keywords such as ‘bulk buy’ and ‘wholesale’ so we could ensure people were searching with the intent to purchase.
From this, we could then find out the most in-demand trade industry products per industry, as well as the most in-demand industry product groups. We also unearthed data from years prior so we could better contextualise and understand fluctuating demand across varying touchpoints.
How has online demand changed by product?
Overall, builders merchant search volumes are higher than those for plumbing supplies, PPE & work safety wear, and timber supplies, while within builders’ merchant categories, glass was the most in-demand product, followed by flooring.
Somewhat predictably, demand increased hugely following the start of the pandemic. As physical merchants were shut, those who continued to work took their search for suppliers online.
Our results show further trends too. For the most part, demand for products decreases toward the end of the year across every year we looked at, most likely due to businesses shutting or ceasing any work over the festive period.
Elsewhere, we noticed that demand seems to peak around May and October, a trend that continued in May of this year. And much like the data we gleaned across 2019 and 2021, we expect this to decline in a similar fashion.
It’s also worth noting that the first quarter of 2022 saw a similar demand trend to 2021, only with lower volume. Was this perhaps due to shortages letting up and search demand returning to normal?
Overall, demand for building materials in 2022 remains high but stable. However, huge surges in the number of house building and large-scale infrastructure projects have caused demand to outstrip supply.
For instance, a survey from the Federation of Master Builders found that 32% of builders reported an increase in workload with regards to the repair, maintenance and improvement sector. With that said, this sector has also been the quickest to recover since the first lockdown, owing to a demand for better outdoor space and home office environments, as well as DIY projects.
Elsewhere, the rising costs of material and labour had caused delays to projects too, as customers waited for costs to come down, while some projects became unviable. As a means of limiting the impact of shortages, companies have reported buying earlier and in larger quantities.
Forecasting the remainder of 2022
Based on the data from previous years, we believe that the online demand for builders’ merchants supplies will remain steady until an October peak, before declining towards the end of the year – though still with higher demand than those of 2021 and 2019.
When it comes to output growth in the industry, Construction Products Association has changed its previous forecast from 4.3% down to 2.8%. The reasons for the lower amount? Rising costs, concerns over affordability and the cost of living, as well as global issues such as the war in Ukraine. With that said, demand remains strong across the industry in Q2, and this activity is expected to remain high in 2023.
Speaking of Ukraine, the conflict – and subsequent sanctions – are likely to put pressure on both the cost and availability of imported materials such as aluminium and steel, along with locally sourced bricks and cement. Contractors will certainly feel the effects first, particularly those who work to fixed-price contracts. It’s expected that they’ll have to re-price, add fluctuations costs, and introduce measures to deal with any potential cost inflation.
PPE & Work Safety Wear
Unsurprisingly, the onset of the pandemic saw online demand for PPE skyrocket, as workplace requirements came into effect. Interestingly, in terms of product categories, it was gloves that saw the biggest spike in demand – almost doubling from February to March 2020.
Typically, gloves are made in the likes of Malaysia, China and other Southeast Asian countries – countries that were hit hard by Covid and had to shut down manufacturing plants and international trade. As people had to look for other avenues to access gloves, it makes sense that demand would increase accordingly.
The month of May also saw the biggest spike in demand. A huge gulf between ordering PPE and it becoming available meant that supply chains struggled to keep up with requirements during April and May 2020. Did the increase in online enquiries occur for this reason?
Overall, there was a decline in demand towards the end of each year we investigated, even in 2020. Although the phasing out of restrictions might explain this tapering of demand in recent times, this doesn’t account for the pre-pandemic decline.
As for 2022, it looks as though we are heading towards 2019 levels of demand. Now that restrictions have dropped and the phase for high demand has passed, it seems as though PPE doesn’t have as much importance for businesses as it once did.
Compared to 2021 and 2020, demand is far lower, and it’s certainly easy to see why. The number of restrictions came to an end at the start of 2022. Face coverings were no longer a legal requirement, being phased out in January, April and May for England, Scotland and Wales respectively. Factor in that people were no longer required to isolate as of February 2022, and the drop in demand becomes far clearer.
Forecasting the remainder of 2022
From our data, we forecast that demand for PPE & work safety wear supplies will decline to a level lower than 2019 by September 2022. This is in line with the International Finance Corporation forecasting a sharp decline in 2022 as consumption continues to shrink. They also note that, while masks accounted for most of 2021’s demand, this looks set to be replaced by gloves post-pandemic.
Right now, 73.4% of the UK population has completed the initial vaccination protocol. And there are plenty of stats to be found regarding attitudes towards wearing face coverings and isolating inside.
Surveyed between 25 May and 5 June this year, the proportion of people wearing a face covering has continued to decrease. Specifically, 48% of adults noted that they wear PPE outside their home – in the May ‘21 to May ‘22 period, this number stood at 54%. Likewise, 29% reported wearing a face covering for the length of the journey on public transport, compared to 35% in the same earlier May period.
As for complying with isolation advice, for those who tested positive between 28 March to 2 April, 51% remained compliant – a huge drop from 64% in early March and 80% in February.
Reports of huge amounts of PPE being wasted perhaps also accounts for this lack of demand. Suppliers could be burdened with surplus stock if this is set to continue.
Food & Beverage Supplies
So far, demand for food and beverage supplies is higher than in 2019, although 2020 and 2021 were generally higher for the first quarter of the year. With that said, our results seem to suggest that 2022 is on something of a growth trajectory.
An overwhelming spike at the start of the pandemic is perhaps indicative of the need for small stores looking for fresh stock in the aftermath of wholesalers and cash and carry outlets shutting. And while demand levels have certainly declined for food and beverages following the pandemic, could it be that an increase of businesses which opened during lockdown has remained successful and thus kept demand steady?
In terms of specific products, store cupboard and chilled products had the biggest spike in demand following the pandemic, although drinks were also the most consistently high product category overall. Chilled products, in particular, are affected by Brexit red tape, meaning that certain chilled meats are restricted to enter Northern Ireland from Britain – perhaps accounting for these larger increases in demand of late.
In fact, Brexit looms large in the food & beverage industry. In 2020, almost 80% of food imports to the UK came from the EU, with costs and delays affecting trade to the tune of a 41% drop in exports to the EU from the UK. Exports to Ireland from the UK, meanwhile, fell by 65% in January.
Forecasting the remainder of 2022
From our data, we believe that online demand for the food & beverage trade has peaked already this year, with a slight drop off after June expected to come in.
How can we explain this prediction? For one, rising inflation, energy costs, and supply shortages – to name but a few hot-button issues – suggest that price hikes are on the horizon. Elsewhere, companies may end up reducing their ranges as they realise some of their product offerings won’t make any money.
When it comes to office supplies, demand for this year is, so far at least, higher than it was at the start of 2019 and 2020. In fact, it seems to be following a similar trajectory to 2019, just with higher volume. This is interesting. Despite remote working changing work culture drastically, it’s done little to affect offices buying in bulk stock.
Perhaps guidance on working from home being lifted explains this? Since ending in January 2022, more than 8 in 10 workers who previously worked from home during the pandemic noted that they planned to move to hybrid work in February 2022.
With the proportion of hybrid working rising (increasing from 13% in Feb to 24% in May) and the percentage of remote working dropping from 22% to 14% in the same period, is the higher search volume in 2022 due to more offices preparing to open their doors once again – especially compared to the previous two years?
The spike in demand from March 2020 as a result of continued remote working saw more businesses buying items such as desk chairs, printers, headsets and keyboards for home working. Clearly, there was still a need for office supplies – even if they weren’t being used in the actual offices of companies across the UK.
We also saw a gradual decline in demand from March 2021. It was announced that non-essential shops were once again allowed to re-open from 12 April. Did the reduced online demand come about as a result of businesses once again regaining their usual trade over digital avenues?
As for seasonal peaks and troughs, August saw increases in demand across 2019, 2020 and 2021 – a result of the education sector ordering supplies for upcoming academic years, perhaps? January also saw big peaks across all product categories.
Meanwhile, as more people returned to the office following Christmas, it could be suggested that businesses needed to catch up on admin ahead of the next 12 months. As for decreases, as the end of the year approaches, it seems that office supplies are not on the agenda, with the industry experiencing drops from November into the year’s final month.
Forecasting the remainder of 2022
We see online demand for office supplies remaining quite steady, with trends set to follow those of 2019 and pre-pandemic levels. A spike in winter brings it closer to 2021 levels, however. Could this be down to businesses shopping around online for more cost-effective supplies as prices look set to rise?
With inflation set to increase to 11% through 2022, the pressure is certainly on for businesses that need to find the products they need while remaining profitable.
Compared to previous years, online demand for plumbing supplies in 2022 doesn’t seem to be following any kind of pattern, with a drop in February, a big spike in March, and a drop off into April and beyond. Some further research seems to explain this, however.
Applications for the Domestic Renewable Heat Incentive closed at the end of March. Successful applicants received cash payments for installing renewable heating technology. Perhaps this fuelled a last-minute surge of work as consumers hoped to become eligible for the scheme?
Elsewhere, energy bills increased sharply, and consumers felt the pinch. Was the surge in plumbing demand a result of people looking to offset the increased costs by installing more energy-efficient solutions? Meanwhile, the stamp duty’s extension to late June 2020 (compared to the original March deadline) may have meant people had more to spend on home improvements – another reason for last-minute increases in plumbing work in that month maybe?
Another large anomaly comes in the form of a huge spike in May 2021. And according to the Plumbing & Heating Merchant Index, it seems that COVID is responsible for this.
In May 2021, total plumbing and heating value sales were up 111.6% compared to the same time in 2020 – a time when COVID restrictions forced branches to remain closed. Many COVID restrictions were relaxed on 30 April 2021, perhaps accounting for the enormous increase the following month as consumers looked to take advantage of the relaxing of restrictions?
Forecasting the remainder of 2022
From our findings, we believe that online demand for plumbing supplies will be at its lowest in 2022, bottoming out in December 2022. With the cost of living increasing and inflation rising, will we see a drop off in work in the sector as people have less to spend?
Likewise, with people having spent so much on home improvements during lockdown and the last two years, is there simply going to be a natural tailing off of plumbing work this year?
Following the onset of the pandemic, timber supplies spiked massively and peaked during June 2020, a sharp contrast to previous years, where demand is generally quite neutral during the same period. As for the most in-demand product category from across the industry, decorative mouldings take the top spot.
We’re not sure why since it’s such a niche product, but right now, the home improvement market is booming and so may account for the rise in demand for products such as these.
Demand was also up in May 2022, a month which generally saw decline in 2021 and 2019. There could be a number of reasons for this increase. Import volume of hardwood timber in Q3 of 2021 increased by 23% compared to Q3 2020, with 3.32 million m³ of timber and panel imports in total. Now, timber is also classed as low carbon. Changes to Part L of Building Regulations mean new-build homes have to have 30% fewer CO2 emissions, which came into effect in June 2022. Could the increase in demand be for this reason?
Or perhaps the demand is being driven by things such as HGV driver shortages, port delays and changes caused by Brexit? While stock is very much available, accessing it is seemingly proving harder than before, which may be why suppliers look to alternative ways of getting their hands on what they need.
Forecasting the remainder of 2022
We believe that online demand for timber supplies will see a small spike in June, which will continue to fall each month, with the lowest demand coming in December. Based on the inconsistencies in peaks and troughs across the years, however, it could be a difficult one to predict.
So, what accounts for this potential summer spike? In the industrial sector, output is expected to rise by 9.8% in 2022 as a result of a strong line up of warehouse projects caused by a long-term shift to online shopping. Increased workloads and demand across the board abound elsewhere too.
Monthly construction output increased by 1.7% in March 2022 as a result of repair and maintenance in the private housing sector and private commercial work. Meanwhile, construction output rose to 3.8% in Q1 of 2022, its strongest quarterly growth since Q1 2017.
So, while the sector may be in rude health, there are other less-than-ideal reasons as to why it may see an increase in the summer. Of course, there are price increases and inflation to contend with, while the ongoing war in Ukraine could have a knock-on effect on being able to obtain supplies, causing online demand to rise as people shop around more than usual.
What can suppliers do to prepare for demand?
“I think the data and findings we’ve detailed in our research emphasise the importance of preparing for demand,” says Intact Product Director, Gary Brookshaw. “And while there are noticeable trends, it’s the anomalies that prove the most interesting. If businesses aren’t aware of shifting habits, it can be easy for them to overload on surplus stock, or not have enough stock to meet increasing demands accordingly.
“Of course, software can help immeasurably when it comes to demand. The right ERP package will give businesses access to insights and information so they can meet demand, manage customer expectations, and have the right stock at the right time.
“There’s so much up in the air right now that businesses can’t afford to play it by ear. You’ll find uncertainty around every corner, and ERP software like Intact iQ does a lot to shore up the risks that many businesses face right now.”
Need to know more about identifying future peaks and troughs, preparing your staff for important seasonal shifts, or managing customer expectations through unpredictable periods? You’ll find plenty of insights in these in-depth articles below…
- What is Demand Forecasting in Supply Chain Management?
- A Guide to Preparing Staff and Managing Resources at Key Seasonal Times
- A Guide to Managing Customer Expectations in Times of Uncertainty
The future is nothing if not unpredictable. ERP software that helps you with what the unknown has in store makes navigating supply chain challenges a whole lot easier. Intact iQ does just that. For more information on how its perfect-fit ERP solutions can optimise your business, get in touch with us today.