Blog

Almost half of Australia’s small businesses have changed their approach to business in response to the pandemic, with a significant shift towards online. This is the result of a new study by GrowthOps, which was commissioned by Crazydomains.

Crazydomains wanted an overview of how small businesses – 98% of all Australian businesses – fared a year after Covid-19. Creative Agency and Digital Consultancy GrowthOps conducted two surveys: one of 750+ small businesses; and the second among over 1,000 Australian consumers.

Well over 40% of small businesses have changed their approach in the past year – through operations, sales and marketing. Key drivers here are changes in consumer lifestyles, transitions to remote work, and adverse effects on the economy and income.

A move to online has underpinned each of these trends – be it a move to virtual work or buying groceries and consumer goods online. For small businesses, the natural response has been a linchpin for e-commerce and a greater focus on creating an online presence.

The approach isn’t entirely new: over two-thirds of the marketing budgets of Australian small businesses were already online before the pandemic. In fact, Australia was already struggling with a decline in consumer spending as early as 2020, and online retailing had emerged as the only bright spot in the retail landscape.

However, the pandemic has caused online marketing spend to increase by an average of 6%, with most sectors doubling in the digital space. One example is the food and beverage sector. Well over 60% of small food and beverage companies now spend more than 80% of their marketing budget online, compared to less than half before the pandemic.

A similar leap can be observed in Design & Creative, Professional Services, Retail & Fashion, Consulting and even in Construction – albeit to a lesser extent than in Food & Beverage. Only in the education sector did expenditure on online marketing decline slightly, although the sector was already above the 80% threshold before the pandemic and was thus at the level of other sectors, if not before them.

“Most of the changes have to do with the way companies manage their online presence,” said Mark Evans, CEO of Dreamscape Networks – owner of Crazydomains. For example, the main focus is on social media activities, as companies use attractive online platforms to attract a larger customer base. Many have created new profiles to drive this change.

For many, a website upgrade is also on the agenda. “Companies are finding new ways to get the most out of their web presence. And a new website or website improvements are proving to be efficient and affordable options for adapting to the effects of Covid-19, ”said Evans.

Some are still laying the foundations for their online spending – making their products and services available online and developing the e-commerce infrastructure. For others, the budget is used to improve internal communications through Zoom, Teams, and other collaboration tools like Slack.

Consumer preferences

This is how small businesses are increasing their digital spending. However, having a larger online presence is not a direct ticket to more business. GrowthOps’ consumer survey found that Australians have clear preferences when it comes to shopping online, not just in terms of products, but website design, guidelines, and trust as well.

The effects on income and the economy are evident here. Undoubtedly, ratings and reviews matter, but the key factor behind over 60% of Australian consumers is free or low cost delivery. Similarly, an exchange, return, or refund policy can also help complete a purchase for nearly half of consumers.

Other distinguishing features include delivery times, range of products and services, customer service, payment options, and discount and loyalty programs. More than a third of Australian consumers also judge a company by its privacy policy.

For small businesses, the big picture is that a strategic approach is required: to ensure that online spending not only increases, but also meets the preferences of an increasingly demanding consumer base. A secure, adaptable, flexible and data-driven presence with an understanding of social platforms are key competencies in the new normal.