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European small Businesses Find a Digital Safety Net During COVID-19

A ‘Digital Safety Net’ has helped European small businesses during COVID-19. This research report and accompanying materials describe how and to what extent affordable and accessible digital tools have enabled many small businesses to survive and recover from the economic impact of COVID-19 – in some cases, becoming stronger and more agile in the process. Within the report you can find top-line findings, analysis and insights, and recommendations aimed at policymakers, technology companies, and small business leaders.

Presented By

Lead Findings

The COVID-19 pandemic has devastated European small and medium-sized enterprises (SMEs), but their use of digital tools has acted as a “safety net” and saved many of them.”
90%
of SMEs reported significant disruption,
with 44% changing their products, services, and/or business model.
SMEs’ resiliency and financial performance during the pandemic cluster in three segments based on digital tool adoption.
42%
are Digitally Advanced;
they view as an integral part of doing business and use a larger number of tools (>10)
40%
are Digitally Evolving;
they view tools as important but use fewer tools (<10), they are in transition
18%
are Digitally Uncertain;
they remain unsure of the value digital tools can have and use significantly fewer tools (<10)
We may be the world’s oldest restaurant, but we see the value of these next-generation tools. I have no doubt that we will continue to use more of them heading into the future.”
Antonio González, Botín, Madrid, Spain
80%
of European small businesses increased their use of digital tools during the pandemic,
with 94% of Advanced SMEs deploying at least one new tool during the past year vs 54% of Uncertain SMEs.
2X
Advanced SMEs invested twice as much money in digital tools
than Uncertain SMEs during the pandemic.
Up to 4.7x
Advanced SMEs used every kind of digital tool more than Uncertain SMEs,
including those that assist with hiring, training, collaborating, measuring insights and success, and selling online, with individual tool adoption rates as much as 4.7x higher.
We had zero experience in retail and zero technical skills, what we did have was a range of low-cost digital tools that were easy to use, even for us. We just figured it out.”
Diarmuid McSweeney, Gym+Coffee, Dublin, Ireland
Digitally Advanced European SMEs make more sales, drive more revenue, hire more people, and are better positioned to be successful in the future.
80%
better sales and 60% better revenue than Uncertain SMEs
during the pandemic, showing that prioritizing and properly using digital tools yields better outcomes.
3.3X
More new employees hired vs.
Uncertain SMEs, making them more likely to be job creators at a critical time.
1.8x
Greater revenue advantages for female-led Advanced SMEs
vs. 1.6X average, despite facing greater challenges.
Without the use of the online tools, we would be permanently closed right now without a doubt,”
Ntina Denaxa, Emmantina Houses, Santorini, Greece
SMEs share many concerns as they seek to navigate the “New Normal” of a digitally-driven economy including uncertainty due to challenges accessing capital, tools, training and measuring success.
62%
Small businesses who believe they will fully recover to pre-pandemic levels during the next year
56%
Advanced SMEs who plan to increase their use of digital tools post-pandemic
vs. 38% of Uncertain SMEs
2X
Amount of Advanced SMEs who say they are focused on the need to digitally prepare
for the post-pandemic ‘new normal’ vs Uncertain SME.
SME leaders’ top concerns about digital tools are:
  • – Uncertainty of return on investment (27%)
  • – Protecting data privacy (25%)
  • – Cost (23%)

Conclusions & Recommendations

Policymakers, technology companies and SME Leaders all have work to do in ensuring as many small businesses as possible have access to the benefits of the Digital Safety Net. Increased access to tools, training, funding, and expanded digital infrastructure are all catalysts for increasing the sustainability and growth for SMEs.

During 2020 digital transformation became digital urgency

Digital tools deliver support during times of crisis, fill important gaps during normal times and deliver advantage during competitive situations for talent, customers and sales.

Access to and use of digital tools drives better performance for SMEs

Policymakers and industry partners must align to cultivate a regulatory environment that nurtures SME access to world-class digital tools and creates a higher level of digital innovation in the economy to foster small business growth and enhance the wide-ranging benefits to consumers.

The gap between the most and least digitally-advanced SMEs is widening

SMEs that use many digital tools leverage an inertia that is speeding their evolution and multiplying their benefits. For SMEs that use few digital tools and remain uncertain of how to digitally adopt, the gap is widening at a growing pace. Closing this ‘new digital divide’ could bring significant economic benefits to all of Europe.

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.

See Their Stories

La Maison des Soeurs Macarons
“Improving digital visibility is what allowed us to save this centuries-old family company. It was simply a matter of survival at first. It is now a vital cornerstone of our business.”
Hooray Heroes
“We are fully digital and we are nimble, so we are well positioned to persevere in difficult situations.”
Little Box of Books
“The reality of having a business today is that you can’t not have a robust digital presence, which meant I had to become digitally literate quickly when I decided to open Little Box of Books.”
Lusa Language School
“I loved this business and I didn’t want it to close. I felt this immense weight upon my shoulders because it was on me to ensure that didn’t happen. I also realized that it was in my reach to do something about it.”
Moon Dot
“This one tiny tweak allowed us to dramatically increase our visibility with those who look for products using Google Image search.”
Progetto Quid
“For our young social enterprise, the most important challenge was being able to not just survive COVID-19 but actually emerge stronger,”
Gym+Coffee
“We had zero experience in retail and zero technical skills, what we did have was a range of low-cost digital tools that were easy to use, even for us. We just figured it out.”
Honingwinkel.nl
“This was a group effort and digital tools made it all so much easier and more affordable than any of us were expecting,”
Botín
“We may be the world’s oldest restaurant, but we see the value of these next-generation tools. I have no doubt that we will continue to use more of them heading into the future.”
Emmantina Houses
“Without the use of the online tools, we would be permanently closed right now without a doubt,”
Pott Au Chocolat
“It was such a relief that we made the decision to lean into digital when we did. It provided a solid base to build from in a confusing time. Honestly, I don’t know how we would have managed without it.”

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