In the past few months, the COVID-19 pandemic has tested the resilience of small and medium enterprises (SMEs) and their ability to adapt to the disruption around them. Not many survived. In a report published by the International Monetary Fund (IMF), it was estimated that the rate of business failures for SMEs in 2020 is almost double, increasing by 8.8%. And with the pandemic holiday season shopping coming up, SMEs are put to another challenge yet again to gain greater relevance in the market and test out their business models.
But SMEs are suffering from reduced sales. Reports have been consistent about decreased spending and lower investments across all sectors, with a few exceptions including tech. With the holiday shopping season right around the corner, small and medium businesses are given a “glimpse of hope” to turn things around and get back on track like the pandemic never happened.
In the upcoming season, fewer in-store visitors are expected— with consumers fearing for their health and safety. Digital channels will gain traction and will heavily influence buyers’ decisions and purchase processes. Omnichannel marketing will also have strategic importance in businesses.
So how can SMEs maximize opportunities in the holiday season? What practices should they adopt to gain a greater share in the market?
Investing in technology
Companies have been investing in technology in the wake of the pandemic for survival, according to KPMG. The global advisory firm surveyed 900 technology executives to examine the impact of technologies on businesses before and during the COVID-19 pandemic. They found out that 44% of the respondents expect increased spending on 5G technologies over the next year— about 43% on process automation, 39% on AI, 38% on hybrid cloud technology, 34% on blockchain, and 34% on edge computing.
So what’s with the technological investment? Emerging technologies have been observed to play a significant role in the global shift to a more digital economy. These technologies help companies maintain customer trust and keep remote workforces connected, which is important especially when the work-from-home setup is more likely to stay after the pandemic.
The adoption of these technologies also ensures business resilience and preparedness for disruptions and builds a strong foundation for future product and service innovation.
In retail, global research and advisory firm Gartner claim that SMEs can compete with e-commerce Giants by optimizing their most significant assets with tech—using “conversational commerce” platforms like chatbots, combining physical and digital channels to increase personalization and convenience, and providing AI-enabled customer-centric experiences. They should also consider investing in corporate communication tools, social networks, digital marketing tools, e-commerce, and studying how to engage and adopt new forms of digital culture.
With the pandemic holiday season, more potential customers—about 82% of them according to a report—are planning to go online for their shopping needs.
Adapting to the “new normal”
SMEs need to be wary of the emerging trends and post-pandemic norms in the “new normal.” Failure to do so can make or break these businesses. Company decision-makers must prepare a strategy to accommodate the changes in consumer behavior.
Investments in technology to upgrade their digital presence is a must, as well as improving the customer experience. The latter is a decisive factor that determines repeat purchases—whether a customer will want to purchase from the business again. Here, it is crucial that the technology that is to be integrated is easy to adopt from both the seller and the buyers’ perspectives and will work smoothly all throughout.
Business-to-Business (B2B) buyers and sellers were also forced to adapt to a digital environment during the COVID-19 pandemic, according to McKinsey. More than 75% of B2B buyers and sellers say they prefer digital over face-to-face interactions.
The biggest reason for this is safety, but digital transactions also create greater convenience for customers, thus improving customer experience. During the holiday season, as customers are starting to go digital, self-service and remote technologies will gain prominence. These technologies allow customers to gain more information from businesses, and to place orders and arrange services at their convenience.
The “new normal” also includes a change in consumer behavior. As quarantine measures require proper hygiene and social distancing, more customers prefer to go to their neighborhood when buying in-store—over 40% of shoppers, according to Accenture. Prices will also become a gamechanger and customers will become more health-conscious than ever.
Hijacking growth during recovery
Economic experts are optimistic for a rebound in 2021, as seen in the cases of the previous recessions. The ADB forecast a 6.8% rebound for developing Asia, according to its report.
Meanwhile, the Asia and Pacific region have been releasing stimulus packages amounting to US$3.6 trillion to avoid further decay in the economy. Spending will gradually increase and businesses that were able to adjust to the “new normal” will experience an increase in brand awareness and customer retention and will have an edge over the competition.
Running a business in a pandemic is difficult, but preparing for uncertainties and cushioning the impact of the crisis through best practices are recommended. Make sure to follow guidelines to keep your business and your customers safe all throughout.
Committing to consumer safety
Cleaning and disinfecting products are a must-have for brick and mortar stores—such as alcohol/soap dispensers, and air purifiers. And customers need to notice through visual cues that an extra effort has been taken by the business to follow the guidelines for COVID-19—to ensure the protection of their health and well-being. This can be done through the placement of social distancing markers, acrylic sheets, or even posters that remind them of the measures the business deployed to avoid the spread of the disease.
This is not limited to offline transactions alone. Even online transactions require a certain level of face-to-face interaction such as the delivery of parcels—which are expected to surge during the holiday season despite the crisis.
Here, a document can be included in the delivery indicating the steps the business took to ensure the product is free from contamination— from the warehouse to the delivery point. It can also include information about the body temperatures of the employees who are part of the supply chain, and other details signaling that the employees that make up the business are free from COVID-19, including the delivery men. Small acts like this can boost customer trust and encourage repeat purchases even after the pandemic.
Despite the observed decrease in consumption during the pandemic, the holiday season will be a period where a surge in online deliveries is expected. Winning the digital race is a must and adoption of measures to protect consumers from the disease is now a bare minimum. Changes will be drastic, including buyer patterns and purchase behavior, and determining these changes is crucial in maximizing opportunities that the pandemic holiday season will bring.
