Millions of people get lost in digital marketing when small and medium businesses close their doors.
Small businesses (SMEs) are now engaged in a Darwinian struggle for survival. The consequences of the COVID-19 pandemic are worrying and the market is reshaping. Some small and medium businesses have adapted and others have said it is coming to an end. It also has important implications for marketing and advertising.
In its second-quarter economic report, Yelp describes the increase in consumer activity between late May and early June, driving the growth of infections in states like Florida and California. The report also quantifies the number of local businesses that are permanently closing.
According to a separate poll taken in June, 1,200 SMBs in Small Businesses for America’s Future said 23% said they wanted to close their doors forever. This information reflects the business owner’s mood, but not necessarily behavior. Unfortunately, some of the real numbers are worse.
Leaving the advertising and marketing industry
North American SMBs spend a total of billions each year – more than $ 100 billion, according to Intuit – on marketing and advertising. The disappearance of hundreds of thousands of small businesses is negatively impacting local communities and the wider digital marketing ecosystem.
In the absence of further incentives and government bonds, the question is whether SMEs can survive on money and whether the US can control the spread of the pandemic before the money runs out. The NFIB research center found that 78% of the SMEs surveyed could survive for 7-12 months or more with existing money; and 57% can last more than a year, which is good news. The current crisis is unlikely to last longer than a year.
Restaurants among the most affected
On July 10, Yelp said 133,000 businesses on the site had shut down, many of them temporarily and some permanently. According to the company, 60% of the nearly 26,000 Yelp restaurants closed since March are permanently closed. This is a shocking figure and it seems to predict that June’s Independent Restaurants Coalition predicted that 85% of independent restaurants could close without strong government funding.
Pubs and stores are also suffering a lot from other categories: 45% of pubs and clubs are closed permanently, while 48% of retail and retail stores are closed, Yelp says.
Professional and other services perform better
According to Yelp, some categories show better and lower permanent closing prices. These include professional services, accounting, web design, graphic design, healthcare, and education. This does not mean that everything in these categories is good; not as bad as restaurants and shops.
According to a June survey of members of small and medium businesses on the B2B Alignable website, 68% of local businesses are now ‘open’ (to varying degrees). Only about 50% of customers returned during the survey and 48% of employees returned to payroll. Slightly more optimistic, a July NFIB Research Center survey found that nearly three-quarters of SMBs reported sales of 51% (or more) of pre-pandemic levels; 44% said sales were 75% or more and 11% said they were doing better than before.
Embrace the spindle
SMEs that survive or perform relatively well have reached the top. A GetApp survey of 577 SMBs found that “surprisingly 92% of respondents say they work in at least one direction, while many works in different ways; only 8% didn’t look back.” SME definition used for less than 500 employees, so it is likely that there will be larger and more sophisticated companies in the sample
The most common change was the launch of a new online delivery channel, followed by the launch of new virtual services and then offline delivery services. The vast majority (96%) said they want to keep some of these new services and channels when the pandemic finally ends; 43% appreciate the changes made.
The survey found that SMEs in management face the biggest challenges: 1) the lack of employees or internal skills to perform, 2) the lack of money and 3) the introduction of new online distribution channels. But the study found that SMEs that achieve growth have significantly better sales outcomes than those that don’t.