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Retail Industry

A ‘Digital Safety Net’ has helped European small businesses during COVID-19. This analysis specifically looks at the importance of digital tools for SMEs in the retail industry, which are defined as small businesses directly selling goods to consumers. It is based on a subset of responses from a survey of 5,011 small and medium-sized enterprise (SME) leaders in 28 European countries across a variety of business sizes and industries conducted from Nov 16–Dec 21, 2020.

Our research identified three categories of SMEs in the retail industry, based on how they characterized the pre-pandemic importance of digital tools to their business operations, and their actual use of digital tools entering the pandemic. 

Lead Findings

34%

are Digitally Advanced (-8% below general EU average);

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

41%

are Digitally Evolving (+1% above general EU average);

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

25%

are Digitally Uncertain (+7% above general EU average);

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

“This was a group effort and digital tools made it all so much easier and more affordable than any of us were expecting,”
AHMET TASKAN, HONINGWINKEL. UTRECHT, NETHERLANDS.

While 8% fewer of Europe’s Retail SMEs are digitally advanced compared to Europe-wide averages, those that are had significantly better revenue and did more hiring than less-advanced peer SMEs.

75%

European Retail SMEs that increased digital tool use during the pandemic

80%

Increase in revenue performance during the pandemic by Advanced Retail SMEs (-17.7%) vs. Uncertain Retail SMEs (-31.9%)

+2

Number of net new employees hired during the pandemic by Advanced SMEs vs. Uncertain SMEs

“The reality of having a business today is that you can’t not have a robust digital presence,”
LYNSEY POLLARD, LITTLE BOX OF BOOKS. LONDON, UK.

On average, sole owner/operators or women-led SMEs had an especially challenging time if Uncertain, but found outsized benefits if they were Advanced. Female-led Retail SMEs saw similar results to the overall, with Advanced SMEs significantly outperformed their Uncertain counterparts.

80%

Increase in revenue performance during the pandemic by woman-led Advanced Retail SMEs (-18.4%) vs. woman-led Uncertain SMEs (-32.9%)

+2.3

Number of net new employees hired during the pandemic by woman-led Advanced SMEs vs. woman-led Uncertain SMEs

“This has once again confirmed for me that a well-designed online store and the right digital tools can provide lasting security for small businesses like mine. It means customers can find us even if we do not invest a lot in advertising.”
KATARZYNA SZWARC, MOON DOT. POZNAN, POLAND

Not all European Retail SMEs use and value digital tools the same way, thus their outlooks and future plans for adopting tools reflect this. Additionally, not all digital tools are equally helpful to European Retail SMEs, with E-commerce, data analytics, employee management and collaboration tools, conferring a more competitive advantage on the SMEs using them.

57%

European Retail SMEs who felt comfortable using digital tools pre-pandemic

European Retail SME leaders’ top concerns about digital tools are:

  • Uncertainty of return on investment (28%)
  • Not knowing where to start (22%)
  • Lack of skills and knowledge (22%)
50%

European Retail SMEs who are planning to increase their use of digital tools post-pandemic

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.”
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,”
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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