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Digital Offers a Lifeline to Small Businesses

Keyboard in a life preserver

UPS has completed the fourth week of a study to measure the impact of COVID-19 on small and medium-sized businesses across the United States — this installment went to more than 900 U.S.-based respondents between April 15 and April 20.

For the first time, the number of businesses negatively impacted by the pandemic has stopped increasing; after peaking at 83 percent the previous week, this number now sits at 81 percent. Further, the number of respondents who expect their second-quarter revenues to decrease due to coronavirus also ticked slightly lower compared to the previous week.

Why has this slight downward trend emerged, when most businesses remain shuttered? The economic impact of the pandemic remains pervasive, to be sure, but during this time of socially distant purchasing, e-commerce offers a lifeline to many businesses.

E-commerce drives sales

To spur revenue growth through their online storefronts, many businesses have ramped up their marketing efforts by offering more discounts and promotions.

Respondents mentioned increasing the frequency of their customer newsletters, providing more discounts via email and increasing their social media presence. Shipping is another lever businesses have pulled to drive sales.

As one respondent noted, “We've started offering free shipping no matter the order size.”

Businesses are also adjusting their long-term e-commerce strategy as a result of this pandemic. Nineteen percent plan to add new e-commerce channels as a means of reaching more customers.

Said one respondent, “We are planning to open an Etsy page. We are ready to expand our business through additional channels.”

Other businesses are focusing on website improvements to enhance the customer experience, including the roll out of back-end solutions to help fulfill customer orders more efficiently.

“The economic impact of the pandemic remains pervasive, to be sure, but during this time of socially distant purchasing, e-commerce offers a lifeline to many businesses.”

The future is online

When asked how their business will operate differently in the post-coronavirus environment compared to before, the top action among respondents was an increased focus on online sales (27 percent).

This applies to brick-and-mortar businesses that previously did not have an online store, as well as businesses with an existing e-commerce presence.

“We are working to put even more of our business online,” stated one respondent.

One of the reasons for this e-commerce emphasis is the long-term benefits it will provide. Many respondents are finding new customers and markets for their products online, and they anticipate these customers will continue to drive incremental sales in the future.

Others noted that shoring up their e-commerce presence now will better prepare their business to weather future storms.

E-commerce has helped many businesses navigate this crisis, and it will likely continue to play an outsized role in the post-coronavirus environment.

As one respondent noted, “More digital and virtual options need to be available because life may not return to exactly like it was before.”

UPS will deploy this survey every week to monitor the continuously evolving influence of the COVID-19 pandemic on small and medium-sized businesses.

Read part one, part two and part three in this small business series.

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