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The Covid-19 pandemic has accelerated digital transformation in small businesses across the country. Digital transformation became a critical factor for business survival and business success during the pandemic.
Small businesses rise to the challenge and take the digital-first approach. They are making the leap into digitalization to respond to changing consumer behavior and expectations, to adapt to new work standards, to use data to improve performance and strengthen the resilience of the company.
1. Respond to changing consumer behavior and expectations
The pandemic has changed the way consumers shop. Last year, US retail e-commerce sales grew more than 33%, reaching $ 799.18 billion. Data from consulting firm McKinsey puts ecommerce volume growth in context and finds that the U.S. ecommerce penetration rate increased 10 years in 90 days in 2020.
Ecommerce is expected to remain high after the pandemic as consumers continue to get used to the convenience of online shopping. To stay relevant, small businesses need to adapt to meet customers where they are.
Digital payment is another area that has been reshaped by the pandemic. At the height of the pandemic, concerns about the spread of the virus made consumers and employees reluctant to handle cash or credit cards. This led to the advent of contactless payment solutions that allow customers to pay with their phone or with digital options.
Similar: Why companies need to embrace digital payments now
A recent VISA survey found that 85% of consumers expect digital options when shopping in person. Tapping into a credit or debit card is the most popular contactless option consumers have come to expect (62%), followed by mobile payment apps (41%), and finally paying with a mobile wallet (37%).
Loyalty programs are also being digitized to help businesses get consumers back into business. As consumers spend more time online, small businesses are turning to digital loyalty solutions to increase customer loyalty, incentivize shopping, reach new customers, and increase brand awareness.
While building a digital ecosystem to respond to changing consumer preferences, small businesses are also digitizing back office functions like bookkeeping to efficiently manage their finances.
2. Adaptation to new labor standards
Pandemic changes in labor standards affect the way companies work. Remote work, which has grown significantly during the pandemic, appears to be here to stay. The analyst firm IDC predicts that "the US mobile workforce will grow steadily over the next four years, rising from 78.5 million in 2020 to 93.5 million mobile workers in 2024." At the end of the forecast period, IDC expects mobile workers to make up nearly 60% of the total US workforce. "
To support a distributed workforce, companies are integrating digital tools with cloud technology that enables real-time access to data from anywhere. This increases productivity and ensures that companies are efficient wherever the work is being done. A Cisco 2020 study of small business digital maturity found that 36% of small businesses plan to invest in solutions that allow their employees to work remotely.
Related: Remote Working Is Here To Stay: Are You Ready For The New Way Of Life?
For example, small businesses are adapting accounting functions to new labor standards, using cloud-based applications to digitize accounting tasks, and keeping finances on track when work is moved away from the office. These applications provide a robust toolkit to help business owners keep track of their bookkeeping and bookkeeping, all in one place.
To further streamline their finances, many business owners partner with online accountants and bookkeepers. This saves them time and stress and allows them to concentrate on what they love – running their business.
3. Use data to improve performance
Digital transformation provides access to data and insights that can help maximize business performance. This enables companies to analyze data to understand customer buying habits, increase customer acquisition and retention, drive product and service innovations, and automate business processes.
These insights help small businesses maximize business performance. According to McKinsey, data combined with analytics can lead to sales growth of 15-20%.
Financial data is especially important to drive company performance and strategy. To capture this data, small businesses are digitizing accounting functions. Cloud-based accounting platforms that connect to bank account and credit card transactions can track expenses and cash flow. This gives business owners insight into their numbers and informs about the business strategy.
Related: Does Your Company Need Digital Transformation?
4. Build business resilience
Digitization enables small businesses to deal with uncertainty and maintain resilience in changing market conditions.
The aforementioned Cisco Small Business Digital Maturity Study found that small businesses in the mature stage of their digitization journey "have the highest recovery rate and can react faster" when it comes to recovery during and after the pandemic changing market conditions and increasing your sales at higher rates. "
Cloud technology is a key factor in digital transformation and critical to the long-term success of small businesses.
Says Deloitte, “To survive and thrive in an uncertain and rapidly changing world, organizations must innovate quickly, keep pace with technological and industry change, and cultivate greater resilience. In the private sector in particular, this is one of the main reasons that executives invest in digital transformation. "
Digitization is critical to the new forms of business and makes digital transformation an important factor in staying competitive and relevant. Small businesses are facing the challenges of today's digital economy and digitizing almost every aspect of their operations.