Xero recently introduced a study through Forrester Consulting, The next chapter for small business: How to thrive in a changed world. The study explored the impact of COVID-19 on small businesses. It explores various strategies that have proven successful in helping small businesses survive and thrive.  

Using these insights, the activities of small businesses were analysed and how consumer behaviours have shaped these activities.  

Consumer Spending Behaviours before and during COVID-19.

Consumers are spending less overall but have increased their spending through digital channels. Digital spending during COVID-19 has increased significantly across all product categories. Spending online has increased in categories that are usually not bought online, such as groceries.  

Small Businesses Response to Changing Consumer Behaviours  

How have small businesses reacted to these changes in consumer behaviour. One significant finding is how small businesses have increased the speed in which they have adopted digital at the front end (consumer facing, such as online stores), as well as the back end (such as business operations and cloud hosting).  

Businesses that are thriving during this period are the ones that started their digital journey before the pandemic hit, they were more prepared and resilient than the businesses that shifted to digital because of the pandemic. However, it is clear that it is not too late for others to begin their online journey.  The research also suggests that businesses that rely on their support network, such as accountants, bookkeepers, financial advisors, or tech advisors, are more likely to perform in a changing environment.  

Having a Digital Mindset 

The pandemic has undoubtedly accelerated the speed in which businesses have embraced digital technologies. Small businesses are adapting their practises beyond digital payments, by investing in marketing and ad spend to improve their operations. It is clear that the trend towards cloud technology has accelerated, and this acceleration is going to continue post-COVID. Small businesses that are open to change, are embracing this trend, and are supporting their customers’ buying preferences through this disruption, are the ones that are thriving.  

It is essential for businesses to have their financials in order, as they begin to expand to new areas using online platforms. It is important to implement best practises from the beginning of your ecommerce journey to avoid future headaches. Use of accounting services offer guidance through the world of digital sales.

If you have any queries, contact Gallagher Keane to discuss how our services can assist you with your online journey.