The impacts of COVID 19 on Small Businesses
How small businesses can cope during the COVID-19 pandemic
Last Updated on 9 months by William
The impact of COVID 19 was and is still felt by businesses of all kinds, small and big. However, which of these small businesses are the most affected?
Earlier in March, the SMB (small and medium business) group surveyed more than 500 small businesses. According to the survey, it found out which of the small businesses were the most impacted, and the survey also outlined some of the expected changes that will become part of the overall economic recovery.
Which Small Businesses Are Most Affected?
The COVID 19 effect varied on the type of business, with personal service, hospitality and retail being among the most hit. This meant that the smaller the company, the harder the impact, with companies that had fewer than 20 employees becoming a show of themselves.
Why did this happen? Since a small business with less than 20 workers usually lacks cash flow and resources. These businesses were the first to cut working hours for workers or to lay off employees. These businesses were also the first to avoid employing subcontractors.
Six ways the COVID 19 is evolving businesses today
The coronavirus pandemic has significantly evolved the marketing landscape way beyond recognition. Budgets have been frozen, and events have been cancelled, which has led to changes in consumer behaviour.
As a matter o fact, according to statistics, 86% of consumers say that they changed their behaviour as a direct result of the pandemic.
Below are five ways the COVID 19 have helped small businesses evolved:
It’s not a new idea or innovation to be a digital brand; however, in the wake of the pandemic, it’s more of a necessity. People are no longer able to bounce to supermarkets because of their everyday needs. They’re going online instead. This immediately puts businesses with solid online services ahead of its competition. Some brands are taking this step further by developing an enjoyable experience, completely online.
Budweiser, Carlsberg and Remy Martin have collaborated with the e-commerce giant JD.com to offer online clubbing. The National Theater is a live stream of highly lauded performances. We’ve all heard of Joe Wicks’ PE workouts.
Now those in-person activities are overturned in the foreseeable future, and this digital-first approach is crucial to getting people to talk, enter new markets, and keep on rising.
Demand for direct consumer brands increased.
Over the past few years, there has been an increase in DTC (direct to consumer) brands. Eliminating the middle man, for example, department stores and the online market place; as a result of this, businesses are being forced to establish a robust customer relationship, which is rooted in competitive prices and the ability to adapt.
It is this power to change that has seen DTC companies succeed in the present predicament.
Although several businesses are struggling to navigate complex supply chains, DTC businesses have quickly changed theirs to continue to work smoothly. Bloom & Wild, for instance, is now supplying flowers entirely from the United Kingdom, rather than depending on the continent’s farmers.
DTC brands, ranging from beauty to biotech, have gained popularity during the present situation and will continue to do so as more people discover the benefits of going straight. The brand loyalty these retailers appear to instil in consumers means that this demand is likely to continue until normality is restored.
This will, in turn, push retailers with large supply chains to revisit and optimize their models to compete. But for the right reasons, they should be careful to do so.
New Method of Work
Most of us work from home, on reduced wages or furlough. This allows us to focus on how we work.
It has been shown that those long days in the office and the sweaty journeys were not as important as we thought. Ninety-two per cent of staff feels that they are well prepared to work from home. Four in ten London buyers are already planning to move to the country.
It’s not just workers who have a moment of eureka. Agile companies now realize the advantages of a workforce that can operate anywhere, at any time.
Focus on sustainable growth
Today several marketers have had to reconsider their customer acquisition and retention strategies, as budgets have been slashed.
There is more scrutiny than ever on ROI marketing – for many businesses, a costly TV ad with no traceable effect is no longer a possibility. Instead, advertisers are moving to less conventional but more measurable efficient outlets, such as referral programmes.
There has been a surge of brands discounting products to move stock, but this could do more harm than good in the long run.
Before the pandemic, 44% of companies concentrated mainly on new consumer acquisitions, even though they were five times more costly. The present situation will lead more marketers to understand the untapped potential of their existing customers. Instead of lowering profit margins for the acquisition of one-off customers, marketers should concentrate on brand-building and customer retention strategies that involve satisfied customers in long-term outcomes.
Living brand values
Many brands have always got away with simply saying the right things. However, not anymore. Brands that are helping through the time of this pandemic are being noticed, receiving more attention from the press and social media much more than any innovative marketing stunt could have achieved.
Likewise, those who fall short are marked out, as the likes of Virgin Atlantic and Victoria Beckham have already shown.
The influence of brand values is reinforced by a heartened display of support to local businesses.
Small efforts to help small businesses, such as food ordering from a family-run restaurant, purchasing coupons for a favourite hair salon, or attending a Zoom workout from a local coach, have a lasting effect.
In April, local out-of-license, greengrocery and convenience store spending increased by almost 40%.
This underlines the significance of building a brand in the current world. People are increasingly money-conscious and attentive to the products for which they shop. Businesses with living standards that consumers associate with will thrive.