The Connected Commerce Council (3C) today released a report detailing the existence and importance of the small business “Digital Safety Net” to businesses in all 50 states. The report confirms that small businesses using more digital tools, technologies, and online marketplaces are doing better during the COVID-19 pandemic. Those who embrace digital tools early and integrate them more are doing even better. 3C defines the Digital Safety Net as the free and low-cost small business services that include communications and workflow tools, digital marketing and advertising, websites and social media, back-office tools, and e-commerce and online payment tools.

Digitally Driven shows that nationally small businesses that embraced digital tools the earliest – “Digital Drivers” – expect 4x better revenue for 2020 compared to “Digital Maintainers,” those who are generally skeptical of digital tools’ value and typically use only a few basic tools such as email and perhaps a website. In Georgia, 40% of small businesses are digital drivers compared to 35% nationally with a predicted 10.76% in revenue reduction compared to an expected 16% reduction in revenue nationally.

“In times like these, when in-person commerce is limited, if not impossible, and working from home is the norm, digital tools literally are a safety net preventing deeper small business calamity,” said 3C President Jake Ward. “The Digital Safety Net is real. However, the net could — and must — be bigger, more robust, and more inclusive. Small businesses must invest time in selecting the right digital tools for their business; technology companies must help small businesses access the right tools; and policymakers must invest more money in public-private partnerships that create and support small business resource networks.”
Other key findings in the report include:

  • In addition to the 40% that were digital drivers:
    • 25% of Georgia small businesses are “Digital Adopters.” They recognize the value of digital tools and are using some, but are not fully committed to digital, compared to 33% nationally.
    • 29% of Georgia small businesses are “Digital Maintainers.” They are generally skeptical of digital tools’ value or are tech-nervous, and typically only use a few basic tools such as email and perhaps a website, compared to 33% nationally.
  • Comparing the 50 states, those with a higher incidence of Digital Drivers show stronger small business resiliency than those states with more Adopters and Maintainers.
    • The states with the most Drivers and best-expected revenue are:
      • Nevada (63% Drivers, 5.26% revenue growth)
      • Alabama (51% Drivers, 6.61% revenue reduction)
      • Arizona (49% Drivers, 9.75% revenue reduction)
      • Georgia (40% Drivers, 10.75% revenue reduction)
      • Colorado (47% Drivers, 12.45% revenue reduction).
  • 68% of Georgia small businesses increased their use of digital tools during the pandemic, compared to 72% nationally.
  • Pre-COVID-19, 68% of Georgia small businesses found digital tools either “essential” or “important” to their business, compared to 68% nationally.
  • Georgia small businesses cited three key challenges to adopting and expanding their use of digital tools:
    • 29% cite being unsure about return on investment, 42% cite cost, and 46% cite information and skills gaps.

“Thank goodness our third-generation family business had embraced digital tools and e-commerce before COVID-19 surprised us,” said Sara Irvani of Okabashi in Atlanta, Ga. “Fortunately, we have been able to safely continue producing shoes at our Buford factory, and our website and digital marketing team have kept us connected with customers when they are searching for high-quality American-made shoes.”

The report also recommends that small businesses maximize their digital tool use and become better prepared for the next crisis, and provides a playbook for tech platforms, governments, and NGOs to support small businesses today and into the future.

For small businesses, identifying their goals, gaps, and precise needs is critical to ensure they are investing in the right digital tools – not the most popular or least expensive options. For technology companies, helping small businesses discover which digital tools they need and providing confidence-building skills training and user-friendly support materials will help with the knowledge gap that prevents many companies from taking the digital plunge. And for policymakers, the need is to increase funding of small business resources and create public-private partnerships to address access and education barriers that small businesses experience during tough economic times.

Digitally Driven, commissioned by 3C in conjunction with Google and Greenberg, is based on findings from a nationwide survey of 7,021 small businesses that were still in business, including a representative sample from every state in the country. Data are weighted by gender, ethnicity, region, business size, and vertical, to ensure an accurate national representation. The survey was fielded online and by phone between May 28 and July 3, 2020.