The economic impact of the pandemic is being felt heavily around the world. Most notably by small businesses (SMBs) who have fewer tools and resources at their disposal. 90% of European SMBs say they were negatively impacted by the pandemic and 44% had to adjust their business models. Certain groups faced greater challenges, particularly female, older, and sole-operator business owners.1
A ‘digital safety net’, a set of digital tools — like e-commerce, data analytics, cloud services, and collaboration tools — can serve as an operational and economical support system. It helps small businesses build resilience, allowing them to adapt more quickly to new consumer behaviours and get on the path towards recovery.
New research by Google and the Connected Commerce Council shows that 80% of small businesses already increased the use of digital tools during the pandemic.2 So as digital transformation sweeps across the globe, we take a look at the stories of two SMEs from Central and Eastern Europe (CEE) — and how a digital safety net helped them build resilience to recover more quickly.
Start with setting up the basics
The new research reveals that digital solutions not only helped drive revenue, they also opened up untapped growth opportunities for businesses. Some small businesses that were using digital solutions before the pandemic fared nearly 2X better financially during COVID-19, and hired over 3X as many people.3
One company that harnessed the potential of digital tools before the pandemic is Polish home decor and accessories brand Moon Dot. Founder Katarzyna Szwarc says she realised it was time to focus on digital business development when more customers were making purchases online, rather than in-store.
Before the pandemic, the team at Moon Dot had already been working to increase organic website traffic. They were implementing website optimisations, including adding keywords related to its products to improve organic Search rankings.
Digital solutions not only helped drive revenue, they also opened up untapped growth opportunities for businesses
They also learned how to make better use of Google My Business and analyse data, such as website traffic, using Google Analytics. When the pandemic hit, restrictions came into force quickly and Poles found themselves locked up at home overnight, longing for the kind of comfort that Moon Dot offers. This, together with the digital competences acquired, boosted the retailer’s sales by 70%.
“The bull’s eye turned out to be, believe it or not, a change in the descriptions for our photos”, Katarzyna says. “This one tiny tweak allowed us to dramatically increase our visibility with those who look for products using Google Image search”.
Growing across borders with digital
Digital acceleration during the pandemic has knocked down borders for businesses looking to go global and reaching new customers in all corners of the world. In CEE, where growth opportunities are limited by the scale of domestic markets, the export potential is especially huge. Export accounts for 64% of the GDP in CEE countries, but up until now has been heavily focused on offline.
Hooray Heroes, a personalised children’s book company based in Slovenia, has been digital-first and online-only from the very start.
In 2020, the retailer was already operating in six markets, but it wanted to expand into new regions to balance out the seasonality of its sales cycle.
After looking at demand during impactful events, like holidays, paired with market research conducted on Market Finder, Hooray Heroes set its sights on Australia, Spain, and Canada.
It then used its prior successful advertising strategy across all three new markets with customised creatives, such as a koala in Australia and mountains in Canada,
Hooray Heroes achieved over 400% return-on-ad-spend in Spain and Australia, and over 500% in Canada. On top of that, Australia represented 40% of the company’s total third quarter revenue.
“Despite all the uncertainties and challenges the world faced in 2020, we learnt that growth was still possible”, says Mic Melanšek, chief marketing and creative officer and co-founder of Hooray Heroes. “And those lessons we’ll carry with us into our future efforts”.
A look at the future
50% of small businesses plan to increase their use of digital tools, so the dependence on digital is clear.4 A digital safety net can help small and large businesses transform, innovate, and be resilient in the face of change; whether it's during unexpected disruptions like COVID-19 or while launching a dream business.