- Market research companies in the UK have witnessed a slump in their revenue levels by almost 37 per cent this year due to pandemic-afflicted market conditions.
- A study conducted by a leading market research firm has found that only 9 per cent of companies in the UK have increased their market research spending this year, while 38 per cent have kept it unchanged.
- The study also found that 64 per cent of the companies plan to make long-term strategic changes in the way they function.
The UK market research industry has had a very difficult year due to the sudden outbreak of Covid-19 and subsequent lockdown. Most industries, which witnessed a slump in their revenue levels, had reduced their non-essential spending, and that is the primary reason for a slowdown in the market research industry.
According to a leading British market research firm, more than a third of the companies in the country have reduced their market research spending while only 9 per cent have increased it. The situation is similar for other marketing business disciplines, where businesses have been cutting down on their marketing budgets by an average of 57 per cent.
While overall, the marketing spending behaviour is bound to go through a fundamental change due to the pandemic, the year 2021 could be decisive and bring about many new opportunities for the industry. The biggest opportunity perhaps will come from the EU Common Economic Area Regulation pull out on 31 December, when most companies will spend more on market research to help them know how the marketplace is evolving.
Pandemic and market research spending
Market research spending is a secondary spending overhead for most companies. Due to the pandemic, there was a severe cash crunch in the market, and most companies tried cutting their costs by slashing their market research budget.
Secondly, as the country went into a lockdown with the business activity levels across the country coming to a grinding halt, there was nothing much to find out. When the economy gradually started opening in May, business activities started rolling slowly for most industries, but no attempts were made in the field of market research.
However, three major industrial sectors that did well during the lockdown period were the pharmaceutical sector, the housing construction sector and the online retail sector. Any market research spending that might have been made could have come from the companies in these sectors. It is likely that pandemic will affect the market research industry and would continue at least till the time the vaccine is out for use.
The Global Scenario
At the global level, the spending in marketing research slumped as 57 per cent of the global business leaders, who were part of a survey, felt that a market recovery is not expected before 2022. Around 69 per cent of the businesses expected a decline in activity levels in 2020, while 45 per cent stated that they would lose nearly 20 per cent of their pre-pandemic revenues by the end of the year.
A third of the business leaders surveyed expressed their satisfaction on the level of stimulus support they had received from their governments, while 64 per cent stated that they would make fundamental changes to their business models to adapt to the new normal.
An interesting thing to note that most business leaders are now giving importance to innovation and new technology to deal with the evolving situation. The near future will thus see a flood of new business models and technology being adopted. These developments would bring in massive opportunities for the market research industry.
Early vaccine arrival
The early arrival of the vaccine will aid most industries and make the revival process smoother. With business activities gearing up and companies struggling to get back their share, there will be new business opportunities for the market research industry and other related verticals.
The market conditions have also gone through a sea change post the outbreak of the Covid-19. Several experts have been stating that pandemic will change how people live and behave, which will impact their spending patterns. Businesses would need to quickly adapt to these changes, and for that, they would need the active support of the market research industry.
Opportunities with Brexit
The withdrawal of the EU common economic area regulations from the United Kingdom would bring in a lot of disruptions in the businesses. New business realignments would have to be done between the EU and the UK, and the potential impacts will have to be studied before suitable business strategies can be implemented.
In the new year, there could be a flood of requests that may be coming to the market research companies in the UK. The government’s focus to look into more trading opportunities outside of the EU will make the market research field much more crucial and, for which most of the market research companies would have to step up their level of competencies.