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Digital Transformation – SMEs in a New Digital Era

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By Patrick Schaudel, Head of Online Applications SME, IONOS.

As the UK has moved to a full re-opening and the economy begins its recovery process businesses have had to analyse how the pandemic has affected operations and consider how this will impact the future of not only how they work, but what customers expect.

As well as the huge shift to working from home, the move online has rapidly increased, impacting all aspects of our working life and many businesses have had to embrace digitalisation like never before. One part of this is the rapid and continuing increase of e-commerce. Due to the pandemic UK consumers and businesses were moving online to purchase everything from groceries to DIY tools.

In the UK, the e-commerce market is projected to reach £80.6bn in 2021 and the number of users is expected to reach 58.8m. The pandemic has seen the e-commerce market broaden, with customers embracing online platforms to purchase a wider range of services, and businesses have had to be innovative and adapt to serve a more digitalised customer-base.

To understand how the pandemic has impacted SME’s digitalisation, IONOS contracted research of more than 1,000 UK SMEs, exploring the role it played within those businesses, and to understand the challenges for their digital journey. The results are both encouraging and slightly concerning, especially when compared to the forecasted trend of e-commerce.

Focusing on the benefits, 64% of UK SMEs reported that they received positive feedback from their customers due to their digital offerings and 39% said it has aided them in earning brand-new customers. Whether that was for the website that they have built, or a new chatbot designed to interact with customers, SMEs that digitalise see the benefits.

On the other hand, one fifth (22%) of UK SMEs, do not believe digitalisation is required for their company; despite the pandemic forcing the majority of the world’s workforce online. 

With an increasingly digitally driven customer base, SMEs need to be able to navigate what can often feel like an overwhelming transformation in order to continue to be successful. 

For businesses that are still uncertain of the benefits of investing in digital transformation, understanding what changes can positively affect the business, how they will improve the organisations and what can be implemented easily is key.

Digitalisation can be central to future success, improving efficiency, boosting sales and enhancing team performance, but knowing what to focus on to have the biggest impact can be challenging.  

Making digitalisation work for the business is essential and there are several core elements that can truly make a difference. 

The Customer Experience

IONOS’ most important tip for SMEs beginning their digital journey is to make sure they can at least be found online, by creating a website. As alluded to earlier, 39% of UK SMEs believe that the implementation of digitalisation, e.g. in the form of building a website, has won them new customers. This is because a website, once well-crafted, acts as the go-to-hub for all information relating to a business, allowing customers to source the information they want, when they want.

Some website builds can be costly but there are ways to manage the budget effectively; it is all dependent on what the business needs are. Website builders, can be an excellent tool to create customisable websites to suit a business’s needs, for example, developing a page with information on each specific brand or using a certain theme, colour, and layout to match the businesses branding.

Another thing businesses which want to be found online should do is then seek out the support from their hosting services provider as they can offer listing services local to their region, displaying key information like addresses and contact details. This can help boost the businesses visibility on search engines like Google and means that those local customers, prospective or existing, will be able to see said business at the top of the page when searching key words relevant to the business.

By implementing something as simple as a website, SMEs have the opportunity to reach a much wider audience pool. Ultimately, this has the potential to boost sales amongst the new-found digital customer. A website, however, is not the be all end all for digital transformation. Internal communication is just as important in a post-pandemic world with the majority of the workforce looking to work more flexibly in future. 

Empowered Efficient Collaboration

Whilst the UK has moved to end all pandemic restrictions, many offices up and down the country are working at reduced capacity or have embraced hybrid working, meaning having the right processes in place to work as effectively and efficiently as possible is important.

It’s encouraging to see that SMEs are already embracing this digital change and implementing tools to support staff. The research found that a third (33%) of SMEs in the UK claimed that they have incorporated the use of collaboration tools such as Office 365, Google Workspace or Cloud Services. This means that employees from these SMEs can operate with much more fluidity by simply minimising the time it takes to complete administrative tasks.

Taking cloud services as an example, employees can work from wherever they need to and can access and share whatever information they need to complete tasks in a timely manner. The accumulative time saved by not having to send across that extra email, or compile a list of links to specific documents, can allow businesses to focus their time on what is most important to them.

On the other hand, it is not just a time saving tool. Due to the implementation of digitalisation actions like collaboration tools, 74% of UK SMEs believe they are better prepared for future crises. With the past year teaching us to expect the unexpected having this preparation in place can help business leaders feel more confident about the future and help protect the longevity of the business.

Implementing Digital Tools 

One simple aspect to digital transformation that SMEs should consider at the beginning of their digital journey is to implement digital tools. There are many digital tools out there to help aid businesses and these are considered anything electronic that can make tasks easier to complete. Whilst the definition is broad, the below digital tools can help attract and retain potential customers.

Chatbots, for example, offer a platform for customers to ask questions and receive immediate answers. This can support customer queries, help with customer services enquiries or even encourage browsers, who are potentially unsure with their purchasing decision, to buy, whilst offering a personalised experience. Chatbots are best integrated within a website so that they can automatically point to any part of the webpage which has further information on for the potential customer to read. 

VR planners are another great example, especially for SMEs which are offering physical services such as demonstrating what a rented office space looks like to potential tenants or even design businesses that want to show potential customers what furniture or artwork will look like in the desired space. VR planners offer these, virtually, to replace on-site visits and encourage people to engage with your services.

Finally, connecting the businesses digital presence and channels is key and one tool that can do this is a social buy button, helping to convert social media followers into customers. This button allows the business to reach customers where they already are and turning the platforms they’re already using into a shop, without the need of a separate online store. Tools like this are designed with mobile-first users in mind as well, ensuring that customer experience is front and centre.

Digitalisation – The Key to Successful Business

The pandemic has systematically changed the way business is done. It has shifted both the consumer and the workforce into the online space which makes understanding the new digital era that much more important. With the forecasted trend of e-commerce set to rise as well, it is becoming more apparent that SMEs need to invest time in improving their digital infrastructure.  

The expectation from the consumer to have digitally savvy businesses is growing so finding ways to have a stronger digital presence will help maintain positive employee relationships, ensure the business is offering the best customer experience, while creating strong foundations for business growth. 

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