A Digital Safety Net Helps Small Businesses Survive During COVID-19

September 10, 2020

Today, the Connected Commerce Council (3C) published a report detailing the existence and importance of the small business “Digital Safety Net.” The report confirms that small businesses (SMBs) using more digital tools, technologies, and online marketplaces are doing better during the COVID-19 pandemic. Those who embrace digital tools early and integrate them more are doing even better. 3C defines the Digital Safety Net as the free and low-cost small business services that include communications and workflow tools, digital marketing and advertising, websites and social media, back-office tools, and e-commerce and online payment tools.

The Data Catalyst Institute, via Catalyst Research, supported 3C during this project.

This report, titled Digitally Driven, shows that SMBs that continue to operate and embrace digital tools the earliest – “Digital Drivers” – expect 4X better revenue for 2020 compared to “Digital Maintainers,” those who are generally skeptical of digital tools’ value and typically use only a few basic digital tools. Regardless of where they started on the digital continuum, 72% of SMBs have increased the usage of their digital tools during COVID-19.

 Other key findings in the report include:

  • 35% of small businesses are “Digital Drivers.” They consider digital tools essential and were using many digital tools pre-COVID-19.
  • 33% are “Digital Adopters.” They recognize the value of digital tools and are using some but are not fully committed to digital. 
  • 24% are “Digital Maintainers.” They are generally skeptical of digital tools’ value or are tech-nervous, and typically only use a few basic tools such as email and perhaps a website.
  • Asian (64%), Black (60%), and Latinx (52%)-led small businesses are more likely to find digital tools more helpful during COVID-19 than before. 
  • Small businesses cite two key challenges to adopting and expanding their use of digital tools: 49% cite information and skills gaps, while 45% report cost and return on investment as challenges.

Digitally Drivencommissioned by 3C  in conjunction with Google and research company Greenberg, is based on findings from a nationwide survey of 7,021 SMBs, including a representative sample from every state in the country. Data are weighted by gender, ethnicity, region, business size, and vertical, to ensure an accurate national representation. The survey was fielded online and by phone between May 28 and July 3, 2020.