Facebook reports the amount of small businesses using digital tools has increased globally, rising from 81% to 88% in the past six months.
The adoption of digital tools has surged during the COVID-19 pandemic. Small businesses have had to adapt to new ways of reaching customers, in addition to overcoming physical restrictions placed on their operations.
According to a Facebook survey, SMBs were most likely to report using digital tools to advertise and communicate with customers. Though the use of digital tools is increasing across a range of purposes.
Data from Facebook’s survey is shared as part of the company’s State of Small Business report. Much of the 55-page report focuses on changes in revenue, employment, and rates of closure.
If you dig deep enough into the report you’ll find a chapter dedicated to digital tools. This data is worth reviewing to stay on top of the needs of small business owners as their operational structure rapidly shifts to a digital space.
Here are highlights from section four of Facebook’s State of Small Business report for 2021.
Small Businesses’ Use of Digital Tools in 2021
How Are SMBs Using Digital Tools?
A large majority of leaders in small businesses that are still operational report an increase in the use of digital tools.
The largest increases were seen in advertising and selling goods and services, with the share of SMBs using digital tools for these purposes rising 21% points and 12% respectively.
SMBs’ reported use of digital tools as of July 2021, in order of most reported use to least reported use, are:
- Communicating with customers
- Selling goods and services
- Analyzing or researching to answer business questions
- Coordinating or collaborating between employees
The chart below shows how usage has changed over the past six months. On the right-hand side you’ll see the amount of SMBs saying they have no use for digital tools is rapidly decreasing.
Which Types of SMBs Are Using Digital Tools?
The adoption of digital tools is differentiated across sectors. As an example — in the construction sector, 80% reported using digital tools, compared to 93% in the ICT sector.
SMBs in the ICT sector reported greater usage of digital tools across all categories, except for selling goods and services, Those in the wholesale and retail trade were most likely to report using digital tools to sell goods and services.
Consumer-facing SMBs were more likely to utilize digital tools for advertising than non-consumer-facing SMBs. The increase in the use of digital advertising tools is driven primarily by SMBs in the hospitality sector.
Small businesses in most sectors reported communication with customers as the most common reason they used digital tools. The hospitality sector is the only outlier, where more usage is dedicated to advertising tools than communication tools.
What’s the Impact Like So Far?
The growing use of digital tools has mostly been a good thing for small businesses. Approximately 69% of SMBs reported the use of digital tools has had at least one positive impact on their business, such as an increase in sales or customer base.
More SMBs reported that digital tools had led to an increase in sales than for any other impact, followed by an increase in customer or supplier base.
Over 30% of small businesses report digital tools have had no impact at all. Perhaps there’s an opportunity here to coach SMBs and help them navigate the world of digital work?
Over half of SMBs (53%) confirmed that their use of digital tools is likely to change permanently due to the COVID-19 pandemic.