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Almost half of small businesses in Australia have changed the way they do business in response to the pandemic, with a significant shift towards the internet. This is according to a new study by GrowthOps commissioned by Crazydomains.
Crazydomains sought an overview of how small businesses – which make up 98% of all Australian businesses – are doing covid-19 this year. Creative agency and digital consultancy GrowthOps conducted two surveys: one of more than 750 small businesses; and second among over 1000 Australian consumers.
Over 40% of small businesses have changed their approach in the last year – across operations, sales and marketing. The main drivers here are changes in consumer lifestyles, the shift to remote work and the damaging impact on the economy and income.
The transition to the Internet has fueled each of these trends—whether it’s the shift to virtual work or buying groceries and consumer goods online. For small businesses, the natural response is to turn the key to e-commerce and focus more on building an online presence.
This approach is not entirely new: more than two-thirds of the marketing budget among Australian small businesses was directed online even before the pandemic. Indeed, Australia entered 2020 already struggling with a decline in consumer spending, with online retail emerging as the only bright spot in the commercial landscape.
This means the pandemic caused an average 6% jump in online marketing, with most industries doubling down on digital. An example is the food and beverage sector. More than 60% of small food and beverage businesses now spend more than 80% of their marketing budget online, compared to less than half before the pandemic.
A similar jump is seen in design and creativity, professional services, retail and fashion, consulting and even construction – although to a lesser extent than food and drink. Only education saw a marginal dip in online marketing spend, although the sector was already above the 80% threshold before the pandemic, keeping it on par with, if not ahead of, other industries.
“Most of the changes have to do with how businesses manage their online presence,” noted Mark Evans, CEO of Dreamscape Networks – owner of Crazydomains. For example, most attention is paid to activities on social networks – companies use attractive online platforms to attract a larger customer base. Many have created new profiles to support this change.
A website upgrade is also on the agenda for many. “Businesses are finding new ways to get the most out of their web presence. And new websites or website enhancements are proving to be effective and affordable options for adapting to the aftermath of Covid-19,” Evans said.
Some are still setting the stage with online spending – making their products and services available online and developing an e-commerce infrastructure. For others, the budget goes towards improving internal communication through Zoom, Teams and other collaboration tools like Slack.
Consumer preferences
So small businesses are increasing their digital spending. This means that a greater online presence is not a straight ticket to further business. GrowthOps consumer research has revealed that Australians have clear preferences when it comes to shopping online, not just for products, but also for website design, policies and trust.
Here the impact on income and the economy is evident. Reviews and ratings are no doubt important, but free or cheap delivery is the top factor for over 60% of Australian consumers. In a similar vein, an exchange, return or refund policy can also help secure a purchase for nearly half of consumers.
Other differentiating factors include, but are not limited to, delivery times, range of products and services, customer service, payment options, and discount and loyalty programs. More than a third of Australian consumers also rate a business on its privacy policy.
For small businesses, the big picture is that a strategic approach is needed: ensuring that online spending not only grows, but also matches the preferences of an increasingly discerning consumer base. A secure, adaptable, flexible and data-driven presence with an understanding of social platforms are key competencies in the new normal.
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