11 November 2020, 09:33
COVID SURVEY by CECE, ERA and LECTURA:
Covid Special, part 6
The current article focuses on the impact of the coronavirus crisis in specific areas of the business. Two groups of the Covid survey respondents were provided with questions about the area of their business mostly affected. These groups were dealers and equipment rental companies representatives. Beginning with the dealers, we explore which areas were affected positively and which areas were affected negatively. Subsequently, we focus on the comparison of the coronavirus crisis influence on these areas of business based on the region of origin (especially between the United States + Canada and European Union). Similarly, the analyses conducted on rental company representatives are provided.
The dealers were asked two questions:
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What type of equipment was mostly affected?
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What type of equipment was least affected?
Because both questions had the same predefined options, our first aim was to inspect whether it is necessary to analyze both of the questions. By comparing the ranks of the options, we wanted to find out whether these two questions did not provide us with the same information, only in reverse order. Despite the fact, we controlled the ranks for answers provided by respondents reporting an increase and a decrease separately, the ranks of the two questions did not correlate statistically significantly (p = 0.42; p = 0.33), indicating the independence of the answers from both questions. These results may also be due to the format of the questions, which leads us to recommend using rather scale-like or ranking question formats. However, since we used the current approach, we had to analyze both questions separately.
What areas of the dealers´ business were affected the most positively, and what areas were hit negatively?
When comparing the responses from the sample of people who reported they suffered from a decrease during the crisis with those whom the crisis brought profit, we found significant differences between these two groups. The most negatively affected area of business was new machine sales (47,8%). However, the results from a sample of respondents who reported the increase show less accented differences between the various areas of business (however, still emphasizing the primacy of new machine sales 28,8%).
What areas of the dealers´ business were affected only a little?
Then we asked our respondents about the least affected area of the business. The results we obtained still showed some statistically significant differences (p < 0.05) between groups of people who reported increase as opposed to respondents suffering from a decrease during the crisis. However the least affected areas of business were used machines sales and other areas (25,6%), when thinking about the positive influence of the crisis. The least negatively affected areas were parts (23,8%) and services (23%).
Does the results vary when controlling for the level of impact?
Moreover, the Covid survey provided us with information about the range of the decrease the dealers had undergone. We focused on different levels of decrease and their association with the areas of business hit. Across almost all levels of coronavirus crisis impact, the crisis hit mostly new machines sales (p < 0.001). However, in the group indicating the decline was more than 50%, the used machine sales were a little bit more affected than the new machine sales. The impact on other areas of business is presented in the charts below. Furthermore, we also wanted to explore the association between levels of decrease and the areas of dealers´ business hit at least. Unfortunately, these results were not statistically significant (p = 0.06), indicating the differences from our sample are marginal and not generalizable.
The comparison of results from North America and The European Union
Before we move to findings from the rental company representatives´ sample, we focus on whether the differences between respondents´ regions of origin may be found. Since the pandemic began, national authorities have taken different attitudes and developed various forms of strategies to overcome the demands and challenges of the crisis. It is a kind of intuitive way of thinking, there would be some at least nuances in responses based on the region of origin of the dealers. Our aim is to compare the results of the respondents from North America (the United States and Canada) and The European Union.
Despite our expectation of regional differences, while inspecting our data, we found no statistically significant differences between North America and the European Union both in the sample of respondents who benefited from the crisis (p = 0.93; p = 0.77) and in the sample of those who reported a decline (p = 0.07; p = 0.08). Although the data in the table below present some differences, these differences are caused probably only by the odds and specific characteristics of our research sample.
Equipment rental companies
The same approach to what we focused on when analyzing the results from the dealers´ sample was applied when analyzing the results from the equipment rental representatives´ sample. That led us to findings indicating statistically significant (p < 0.05) differences between areas hit positively and negatively – in both cases, the short term rental were hit mostly (increase: 50%; decrease: 58,9%). However, sales gained increased, and long term rental, similarly to short term rental, also recorded a decrease. We also tried to compare the results from European and American samples, which lead us only to findings indicating no statistically significant differences (p = 0.587; p = 418).
Conclusion
To conclude, there were not many differences between areas hit by the crisis when comparing the data from American and European respondents. However, some nuances were found between the areas hit positively and negatively. Overall sales (especially new machines sales) underwent the largest decline.
We assume people had to save during the crisis, so they were buying especially new machines less frequently and focused on alternatives like repairing their own equipment or buying used machines/equipment. It seems customers´ orientation towards renting was not affected at all (at least the results from the dealers´ sample confirms so), and people did not change their attitudes towards renting as vigorously as in other sectors.
In our previous article, we analyzed what type of behavior differentiates the groups of respondents who were successful enough to gain an increase during the crisis from those who suffered from decline. Other solutions are also possible. For example, in the short term, sales leaders should embrace the new dynamics of virtual selling and lean on emerging technology. Various market subjects are looking for digitalization and automation to help increase sales during a difficult time and cope with reduced numbers of workers. The traditional ways of selling appear to be giving way to innovative approaches.
Would you like to know more about the impact of COVID pandemic on the construction industry? Click here for the full report by LECTURA, ERA and CECE!
or continue reading the Covid Special ==> Part 1: The case study on German and British machine owners: similarities and differences in the coronavirus crisis management
==> Part 2: Differences between the coronavirus crisis impact according to the company size
==> Part 4: When facing a crisis, what type and from whom people expect to support?
==> Part 5: The influence of the coronavirus crisis on the dealers´ rental economy
Source: LECTURA Verlag GmbH