We’ve known from the outset that COVID-19 has had a larger impact on small and medium-sized businesses than it has on large businesses, especially in the retail sector. The Mastercard Economics Institute recently released its Recovery Insights: Small Business Reset. This report highlights a lot of the challenges small businesses have faced as well as opportunities that are working. As per Mastercard: • Closures: Globally, small businesses that closed early in the pandemic were about 3x as likely as larger businesses to remain closed long term. • E-Commerce: Following shutdowns, the number of small businesses going online each month tripled from pre-pandemic levels, peaking July 2020. • Entrepreneurship: One-third more small retailers launched in 2020 compared to 2019, nearly 8x the number of larger firms created. • Recovery: Consumer spending at small retailers is up 4.5% through August 2021 YTD compared to the same period in 2020, with e-commerce up over 30%. These trends make a lot of sense. Smaller retailers are less likely to have as diverse of product and therefore less likely to have been labeled essential. Globally, it’s estimated that one-third of small businesses that closed in April 2020 remained closed after six months with about one-fifth remaining closed after 12 months. Mastercard also estimates that small and medium retailers have consistently underperformed compared to large retailers by 10 percentage points. The other side of this shows the incredible resiliency of our business community. In the midst of a pandemic, the number of small retailers increased by a third! It’s also clear that investments in online have in many cases separated the businesses who are growing from those who aren’t. Mastercard’s analysis shows that digitally enabled small and medium retailers saw a 5% increase in customer spending and a 4.5% increase in transactions. They also found that 34% of e-commerce sales would not have occurred with only in-person shopping. According to commerce platform Lightspeed, e-commerce growth may have peaked in 2020 at 32.4%, but it continues to steadily grow. Their research has found 64% of consumers now use ‘buy online, pick up in store’ services with 20% saying they use it regularly. Further driving the online trend is a shortage of retail staff leading to reduced hours and a lack of physical inventory due to supply chain disruptions. Investments in automation and upgrades to point-of-sale systems that integrate with online inventory are paying off. While small online-only retailers are a growing trend, reports on the digital trend are quick to highlight that going online doesn’t mean an end to bricks and mortar retail — it’s an enhancement. Customers are looking for more ways to engage with their local businesses, including new ways to shop and a larger variety of payment options. Building up an online presence has a direct impact on improving and supplementing in-store sales. It’s not too late to invest in digital infrastructure and e-commerce. Our COVID consumer habits aren’t expected to go away, even when the virus does. Our Digital Main Street team is available for free to help and check out our Love Local Marketplace at lovelocalptbo.ca to find some great local businesses who can help step up your online impact.
The Peterborough Chamber of Commerce acts as a catalyst to enhance business growth, opportunity, innovation, partnerships and a diverse business community.