Year 2020 will reshape our society in lasting ways. The coronavirus pandemic has left businesses around the world counting costs and wondering what recovery could look like. The restrictions in terms of our movement , social distancing and self-isolation have led to a reduced workforce across all economic sectors and caused many jobs to be lost.
It has impacted many segments of industries who are facing tremendous operation overhead running their business following the protocols as the events were unprecedented. These results are directly reflected in the UNIDO projection of Global GDB Growth showing a steep decline.
While many of the bigger organisations have their reserves to survive the event, COVID-19 has left a devastating impact on the small businesses. The worse part is that it is still emerging as an existential threat to the nation’s small businesses despite government approving billions to support them.
The pandemic has imposed a limitation on sellers to perform traditional transactions with buyers which has resulted in the biggest decline of the business. As shoppers are hesitant and restricted to return to their everyday habits of shopping or people are no longer filling the room for a session or exercise class, small business operators certainly couldn't adjust the transitions.
According to a recent survey conducted by researchers at the major universities in the US at least 2 percent of small businesses are extinct. It is predicted that sales at physical stores will drop almost 14 percent, or $4.2 trillion, this year, in US alone and it could take five years for the industry to bounce back completely.
But what we have observed during this economic crisis is the pain has been inflicted in an uneven way. Crisis moments have also presented with opportunities. With more sophisticated and flexible use of technology and right business strategies many companies have emerged successfully. Some may have got to a point of survival while the other have literally thrived.
The change in customer behaviour during the pandemic, with social distancing measures in place has shown the vulnerability of the current business model. It has shown an inclination to support the e-commerce trend. Many business research firm have concluded that customers tend to meet their daily needs, such as groceries and health products, through online channels. This significantly boosts the online platforms. Stepping into the void, tech companies are coming up with new tools for small businesses and guiding them to transform their business as moving to online business will shield around your bank account for times like these. Forget about a pandemic for a second, this scenario can well be there in future in some form of a recession. Here's why the business model is moving towards online which can successfully run during any sort of economic downturn.
As COVID-19 hits business activity and forces people to stay at home, small businesses are striving to make the most of online platforms to reach customers and gain revenue. Many small business owners have started using social media or e-commerce platform during this time to sell various types of items which has caught the attention of hundreds of people. Data from the largest e-commerce platforms confirmed more than 250 percent surge in the number of new sellers on their platform in a month. Similarly in response to the shutdowns, restaurants had to close their dining areas. Adapting the changes many owners have quickly adjusted the online model to accept order via apps or websites and their business is surviving. Small shops that sell physical goods such as clothes and books figured out ways to list products online and in some cases created websites for the first time. Amidst millions of job losses, many people have resorted to running small businesses from home and use social media and e-commerce platforms to sell their products.
Technology adoptions that were expected to take years happened in weeks. When it’s about survival the businesses have rapidly started adapting, treading water long enough to come out the other side.
If you are still hesitant about starting your new business in this year or struggling to run your business the traditional way, making online system as one of the methods can help to maintain business amid a pandemic.
But transforming the business model can be very crucial. Aligning your business in a virtual space can often be very tricky. Also, apart from transitioning to an online system, promotion and collaboration are important tools in building an online business. They can enhance and expand the networks that are right on target.
We will discuss on them in our following topics here.