Online and e-commerce the future for Australian small businesses

08 March 2021 4 min. read

Nearly half of small businesses in Australia have pivoted their approach to business in response to the pandemic, with a distinct shift towards online. This is according to a new study by GrowthOps commissioned by Crazydomains. 

Crazydomains sought an overview on how small enterprises – comprising 98% of all Australian businesses – were faring a year into Covid-19. Creative agency and digital consultancy GrowthOps ran two surveys: one amongst more than 750 small businesses; and the second among over 1,000 Australian consumers.

Well over 40% of small businesses have changed their approach over the last year – through operations, sales and marketing. Central driving forces here are shifts in consumer lifestyle, transitions to remote working, and a detrimental impact on economy and income.

What percentage did you spend on marketing online and marketing offline

A transition to online has underpinned each of these trends – be it a shift to virtual working or the purchase of groceries and consumer goods online. For small businesses, the natural response has been a pivot to ecommerce, and a higher focus on crafting an online presence.

The approach is not entirely new: over two-thirds of the marketing budget among Australian small businesses was focused online even before the pandemic. Indeed, Australia went into 2020 already grappling with a decline in consumer spending, and online retail had emerged as a sole bright spot in the commercial landscape.

That said, the pandemic has caused a 6% jump in online marketing spend on average, with most sectors doubling down on digital. An example is the food & beverage sector. Well over 60% of small food & beverage businesses now spend more than 80% of their marketing budget online, compared to less than half before the pandemic.

Increase in online marketing spend by industry

A similar jump is visible across design & creative, professional services, retail & fashion, consulting and even construction – albeit to a lesser extent than food & beverage. Only education saw a marginal dip in online marketing spend, although the sector was already above the 80% threshold before the pandemic, keeping it at par with if not ahead of other industries.

“The majority of changes are related to how businesses manage their online presence,” noted Mark Evans, CEO of Dreamscape Networks – owner of Crazydomains. Most attention, for instance, is going to social media activity – as businesses use attractive online platforms to lure a bigger customer base. Many have created new profiles to drive this change.

Also on the agenda for many is a website upgrade. “Businesses are finding new ways to make the most out of their web presence. And a new website or website improvements are proving to be efficient and affordable options to adapt to the aftermath of Covid-19,” said Evans.

Online marketing strategies

Some are still setting up the basics with their online spend – making their products and services available online and developing e-commerce infrastructure. For others, the budget is channeled in improving internal communication, via Zoom, Teams, and other collaboration tools such as Slack.

Consumer preferences

So small businesses are upping their digital spend. That said, a bigger online presence isn’t a direct ticket to more business. GrowthOps’ consumer survey revealed that Australians have clear preferences when it comes to online purchases, not only about products but also with respect to website design, policies and trust.

The impact on income and economy is apparent here. No doubt, reviews and ratings are important, but the central factor for over 60% of Australian consumers is free or low-cost delivery. In similar vein, having an exchange, return or refund policy can also help clinch a purchase for nearly half the consumers.

Top factors that affect online consumer behaviour

Other differentiating factors include delivery times, range of products and services, customer service, payment options, and discount & loyalty programmes, among others. More than a third of Australian consumers also judge a business by its data privacy policy.

For small businesses, the big picture is that a strategic approach is required going forth: to ensure that online spending not only increases, but also corresponds with preferences among an increasingly demanding consumer base. A secure, adaptable, flexible and data-driven presence with an understanding of social platforms are all key competencies in the new normal.