U.S. SMALL BUSINESSES FIND A DIGITAL SAFETY NET FOR ADAPTATION, RESILIENCE AND INNOVATION DURING COVID-19

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The ‘Digital Safety Net’ has proven vital to American small businesses during COVID-19. Digitally Driven 2021 captures how affordable and accessible digital tools have enabled millions of small businesses to survive and recover from the economic impact of COVID-19.

As the U.S. economy looks towards a post-COVID world, this research identifies a growing gap between small businesses who are embracing and adopting digital tools at a high rate and those who remain uncertain and less digitally advanced.

Better revenue, stronger performance, greater agility and a more positive outlook on the future – all benefits derived by SMBs who are fully engaged with the Digital Safety Net.

Within the report you can find top-line findings, analysis and insights, and recommendations aimed at policymakers, technology companies, and small business leaders.

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Lead Findings

SMBs’ use and continuing adoption of Digital Safety Net tools and services varies, while digitally advanced small businesses have better revenue and hire more people.

SMBs’ resiliency and financial performance during the pandemic cluster in three segments based on digital tool adoption.

40%

are Digitally Advanced;

They view digital tools as an integral part of doing business and use a larger number of tools (>10)

36%

are Digitally Evolving;

They view digital tools as important but use fewer tools (<10), they are in transition

24%

are Digitally Uncertain;

They remain unsure of the value digital tools can have and use significantly fewer tools (<10)

97%

Amount of digitally advanced small businesses that adopted new digital tools and business strategies during the pandemic, vs. only half (51%) of digitally uncertain businesses.

50% better

Revenue performance during the pandemic for digitally advanced SMBs vs. less digitally certain SMBs (-12% for digitally advanced SMBs vs. -23% for digitally uncertain SMBs)

2X more

The rate digitally advanced small businesses hired employees during the pandemic vs. digitally uncertain SMBs.

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COVID-19 was a wake-up call to dig deeper and dive stronger into the digital tools we were already using — we needed to learn how to use them even better.”

Mimi Striplin, The Tiny Tassel | Charleston, South Carolina

Digitally advanced small businesses vastly outperform digitally uncertain small businesses on key success metrics and are well positioned to press their advantage into the future.

3.2X better

Rate digitally advanced businesses retained customers vs. less digitally advanced SMBs.

20X better

Rate digitally advanced businesses acquired new customers during the pandemic vs. less digitally advanced SMBs.

2X greater

The amount of confidence digitally advanced small businesses have that they will make new hires in 2021 (88% vs. 36% of digitally uncertain).

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Without [digital tools], you won’t survive in times of crisis. If you’re not able to access what’s in your office when you can’t be there, then you’re shut down completely.”

Alex Dabagh, Pietro NYC | New York, New York

While advanced small businesses have

made themselves more advanced, uncertain businesses have fallen further behind them in relative terms, creating a widening ‘digital gap’ among U.S. small businesses.

3X more

The amount of digitally advanced small businesses that state digital tools are more helpful for running their businesses now vs. pre- pandemic.

22%

The increased gap between ‘advanced’ and ‘uncertain’ SMBs in the last eight months, from 34% to 56%.

1.5 Million

number of non-advanced SMBs our study indirectly suggests that have closed in the last 8 months.

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“The digital side of the business is what really saved us. Moreover, it opened the door to a whole new online community that is going to continue positively impacting us into the future.”

Juanny Romero, Sunrise Coffee | Las Vegas, Nevada

Conclusions & Recommendations

SMB leaders should be empowered to access, understand, and use digital tools to maximize the sustainability of their businesses and the total SMB economic impact.

Those SMBs taking full advantage of the Digital Safety Net realized decidedly better business results. For those who didn’t, on average they saw worse results financially and operationally. But a subset of those saw something even worse: total business failure.

Policymakers, technology companies and SMB Leaders all have work to do in ensuring as many small businesses as possible have access to the benefits of the Digital Safety Net to increase the sustainability and growth of SMBs.

TAKE THE DIGITALLY DRIVEN ASSESSMENT

Take our two minute Digitally Driven assessment to find out your business’ digital adoption level. By answering five questions you’ll receive tailored resources based on your business goals that will help you run and grow your business with the help of digital tools.

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Coronavirus Resources

The Connected Commerce Council is working to help small businesses, their employees, and their customers stay safe as we work toward recovery. To find the right tools to use and the resources you need visit our site and our partner pages. We are in this together.

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Digitally Driven 2020