Four months into the coronavirus pandemic in the United States and it continues to have a monumental impact upon the American small business community with no end in sight. The way small businesses operate is being transformed in a historic way in real time. While many have had to shut their physical doors, they were forced to open a new digital window to stay afloat as the pandemic went from quarantine lock-down to limited business operations with a continuing threat of stricter public health measures looming on the horizon. Innovative ways to get products to market such as shifting a majority of their retail operations online using digital tools has been instrumental in helping millions of American small businesses stem the tide of ongoing financial loss.
Digital transformation is not a new phenomenon for small businesses. The increased use of digital tools is a top reason why many have been able to continue to conduct business directly to consumers during these unprecedented times. Physical credit cards and banking logbooks for many businesses have quickly become relics of the past, replaced by the tap of mobile phone technology that can process transactions and reconcile balance sheets in a contactless, safe, and more efficient way.
Digital Tools Have Become the Lifeblood of the Small Business Community
It’s been nearly two decades since PayPal arrived on the scene, followed by Venmo and most recently, Apple, Google and Samsung pay. Already the trajectory of future business trends, the COVID pandemic has put the use of digital technology on steroids for the small business community. Forced to innovate to find ways allowing for life-saving social distancing and safety while still allowing transactions to flow effectively and ensuring the sale of products, small business owners have been faced with a “sink or drown” technology moment for their business operations. With products like Facebook and Instagram shops, small businesses can set up a digital storefront and encourage foot traffic in a similar way as they would at their physical shops.
While major corporations and large organizations with substantially greater digital resources quickly were able to utilize the entire digital landscape — including the utilization of online videos, YouTube, Zoom, Facebook and the plethora of other digital avenues — small business owners with limited budgets have had to innovate and become creative in competing in an ever crowded digital world.
A recent survey by Facebook and the Small Business Roundtable, which the National Association for the Self-Employed is a founding member, indicated that small businesses are finding new and creative ways to adapt to the new COVID environment. To survive the ongoing crisis, half (51%) of those surveyed indicated they are increasing their online transactions with clients; a third — 36% — are conducting all of their sales online, and the 35 percent of those who have changed business operations have expanded the use of digital payments.
Many in the small business community also agree the use of digital tools have saved them.
American Consumers Prefer to Shop Online
From groceries to clothing and household items, Americans increasingly are shifting their shopping habits more online with just a click on popular sites like Amazon. Shopping online before COVID was already forecasted on a dramatic upward trend in popularity, but with many Americans still unsure of traveling outside the home for non-essential activities, this trend has only become even more pronounced in a way that will likely change retail habits for a lifetime.
According to a survey by Visa, while 87 percent of respondents believe it’s important to support small businesses, they also use digital channels and payment methods when considering where to shop. Despite the digital transformation boosted during COVID and strong online presence before the pandemic, over half (52 percent) indicated that they would prefer to shop exclusively online. And consistent with the explosion of mobile paying options, over three quarters (78%) rank digital payment methods as their preferred payment option.
The Embrace of Digital Tools in the Marketplace Is a Winning Formula for Everyone
The digital transformation in the small business marketplace is a win for both the consumer and the merchant. The consumer purchases products and/or services with ease online or through their mobile device and without safety concerns, while the merchant can save time and money. Even before the COVID pandemic, the ability to save time and money was the most crucial place for resource savings any small business can use to help grow, save and expand their operations.
Despite the unfortunate turmoil the pandemic has created, I remain optimistic about the resiliency of the American small business community. In the Facebook survey, almost 60 percent of small business owners are also optimistic or extremely optimistic about their business’ future. Small businesses have always had to create and carry their goods to market on an uneven playing field with their larger corporate counterparts. With less resources and a more punitive tax environment than corporations, the innovation, creativity and entrepreneurial spirit of America’s small business community remains alive and well even during these historically difficult times.
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