Digitally Advanced Small Businesses Pull Further Ahead During Pandemic

April 28, 2021

The success rate between “digitally aggressive” and “digitally skeptical” small businesses (SMBs) is widening, exposing a skills gap that could leave behind those that are struggling with digital tool adoption, according to new research published by the Connected Commerce Council (3C) in partnership with Google and research firm Greenberg. In a survey of more than 2,000 U.S. SMBs, Digitally Driven: 2021 found that “Digitally Advanced” SMBs that adopted technology before COVID-19 continued to integrate new digital tools during the pandemic. Moreover, “Digitally Uncertain” SMBs are seeing their more advanced counterparts achieve greater success. Digitally Advanced SMBs earned twice as much revenue and hired twice as many employees during COVID-19 than Digitally Uncertain SMBs.

The Data Catalyst Institute, via Catalyst Research, supported this research project.

Digitally Driven: 2021 found that 82% of Digitally Advanced SMBs credited digital tools with helping them succeed during the pandemic, compared to only 26% of Digitally Uncertain SMBs. Also, nearly 97% of Digitally Advanced SMBs adopted new digital tools during the pandemic compared to 51% of Digitally Uncertain SMBs. The report also found:

  • During COVID-19, Digitally Advanced businesses had 5X better retention of existing customers and 20X better acquisition of new customers compared to Digitally Uncertain SMBs.
  • Digitally Advanced SMBs adopted tools for hiring, training, collaborating, and e-commerce at a rate of 14X higher than Digitally Uncertain SMBs.
  • Digitally Advanced SMBs are more optimistic about the future as 88% are confident they will be making new hires this year compared to only 36% of Digitally Uncertain SMBs.
  • Digitally Uncertain SMBs cite cost concerns and lack of knowledge as reasons for not embracing digital tools.