COVID vs 2008-2010 What SMBs Can Learn
Most of 2020 has been about dealing with the impact of Corona. As some countries in the world begin to relax restrictions, many of us are beginning to wonder what the ‘new normal’ for local businesses and the general economy will look like. Internationally renowned data analysis firm Nielsen recently posted a fascinating article and infographic contrasting the current situation in the USA with the overall impact of the Global Financial Crisis between 2008-2010, pointing to some startling differences between then and now.These differences show that crucial changes to the business landscape for SMBs had already occurred pre-Corona, and the speed of these changes is likely to increase during and after the pandemics with so much uncertainty. This article explores the potential implications of some of these changes for SMBs.
Corona and the modern retail landscape
Back in 2008 less than 1 percent of America's total expenditure on food and groceries was spent online. This translates to a total expenditure on consumer packaged goods of $3.75 billion. As of 2019 that total has already grown to $70 billion with Americans spending $435 billion a year on e-commerce overall. This %1766 increase in the amount people spend on food online in the decade following the crisis shows that the current much publicised transition toward ordering online and taking away was already well underway prior to the pandemic. With lockdown still in force at various levels across the globe this year’s total e-commerce spend will be the highest of all time. In the wake of Corona, Business insider forecasts e-commerce to grow by 18% in 2020
The Impact of this shift toward e-commerce on SMBS
Restaurants who have successfully rolled out alternative methods for delivery and collection must ensure that their menus are adapted to maintain profitability. Sit-down restaurants make a lot of their money on drink sales, but this is not the case for restaurants who deliver. Making appropriate adjustments to the pricing of main dishes or introducing, delivery friendly high-margin side dishes (Garlic Bread for example) will help to make food delivery more profitable. This is likely to be a wise move as the uncertainty caused by the pandemic along with already shifting consumer preferences towards food delivery, means that restaurants are likely to become more reliant on profits from take out and home delivery in the future.
Those restaurants who are not yet delivering or do not have an adequate website and online presence should work on their Digital Marketing, as customers who order from a restaurant they enjoy will be likely to visit it when they are able to. Even if the shift towards home delivery is temporary, because these channels are the primary way that customers find new restaurants to visit as well as order from. Effective Digital Marketing has become key for all restaurants.
Payment methods Now vs 2010
Another important area that has received much attention in recent months has been the move towards alternative payments methods in store. Mobile wallets didn’t even exist in 2008 but today 58% of people in the USA are now using or willing to use a mobile wallet. People are currently more reluctant than ever to pay with and handle physical cash. With more opportunities and motivations than ever before to avoid using cash this may be the time when cashless payment really takes off. Google is already planning to expand its Google Pay features to allow local stores to provide customized payments services from within the Google Pay App
How SMBs Can Adapt
Regardless of when shopping finally returns to normality, the news methods of payments are here to stay and the current situation will only speed up these changes. Whether you are offering alternative methods to cash for store payments or going fully e-commerce with your site, the lines between the online and offline shopping experience are set to blur even further. So, It’s important to explore your store’s options thoroughly whether this is considering offering Google/Apple pay in store, or Paypal for home delivery and click and collect.
Smartphones and Local SEO
Smartphones play such an important role in our daily lives that it's easy to forget that in 2009 only 17% of Americans owned one. Whereas today 80% of all Americans and 96% of 18-29 years olds own a smartphone. Nowadays Smartphones are our primary means of finding our way around. The issues we are all currently facing are very different to those in 2008-2010, and Smartphones have proven to be an important channel for communicating important messages. But this is not justabout finding stores and important information. The value of smartphones as a purchasing channel should not be underestimated: The amount spent through Mobile Commerce increased between 2008-2018 from $2 Billion to $208 billion.
Smartphones Local Marketing and SMBs
Customers now more than ever check on the go which businesses are open and the services they are currently offering by looking them up on Search Engines, Local Directories and online maps. SMBs who want to make sure as many customers as possible know they are open for business again must set up an effective Local SEO strategy to manage their business’s crucial info in all of these locations. Google is aware of the importance of Local SEO in helping SMBs get back into business. As a result they are helping SMBs to communicate better with customers in these channels with expanded messaging features that allow SMBs to message with customers through their Google My Business profile. According to Google this feature can help ‘ customers quickly find up-to-date information about store hours, pick-up and delivery options, precautions and more’. This greater ability to communicate more quickly and directly with potential customers online will play a crucial role in the transition back to normality, making it easier for more customers to know what’s going on and see that services are available again.
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22 Jul, 2020