For small businesses, the last few months must have felt like a rollercoaster ride whose wheels might come off the rails at any moment. This new year will be more of the same with the omicron variant spiraling out of control, at least in the first quarter.
Given that small businesses make up a considerable revenue channel for big brands, big-brand marketers will be scurrying to steady the ship. They’ll have to reach out to small businesses and offer their support, in the form of marketing expertise and digital-transformation resources.
Here’s what is happening in the small business world today: Many small businesses are coming off a great month. According to Alignable’s December 2021 report, 43% of small business owners said their monthly revenues matched or exceeded pre-COVID-19 levels — a 16% increase from November and the largest monthly jump in all of 2021. (The flip side is that more than half of small businesses still haven’t fully recovered.)
That’s great news, of course. Alignable says the top three vertical industries leading the overall recovery effort are insurance (65% fully recovered), finance (60%) and automotive (60%). Not surprisingly, retail had the biggest month-to-month jump given the holiday shopping season, with 41% saying they fully recovered in December compared to 24% in November.
But all is not well as the omicron variant spreads around the world and especially in the United States. Small businesses rang in the new year under a cloud of dread. Overall, 44% of small businesses worry the omicron variant will hurt their recovery, Alignable says. The top six industries most concerned are travel/lodging, restaurants, massage therapists, event planning, retailers and gyms. With the latter, this doesn’t bode well for the popular New Year’s resolution to sign up for a gym membership, work out and lose weight.
Given such uncertainty, big brands would do well to lend a helping hand to their local channel. Truth is, brands need to address their relationship with small businesses, which has been severely strained due to the pandemic driving e-commerce direct sales and disintermediation.
What should brand marketers do? We can’t give you all the answers — at least not yet. The CMO Council has begun researching this critical topic. Check out our program overview, Revenue Gain from the Local Demand Chain. We’ll be exploring go-to-market channel conditions, complexities and challenges across multiple industry sectors in North America.
What we can say with a good degree of certainty is, too many small businesses lack marketing skills and digital transformation acumen. They’re caught up in the pandemic’s wave of shifting consumer behavior and not prepared for digital engagement. Small businesses often fall short of delivering on the new customer experience.
On the other hand, while digital commerce is thriving, many buyers and regular customers remain loyal to small businesses, local merchants and service providers that seek to engage with consumers and deal with supply chain disruptions and price increases. As stated earlier, this local demand chain drives significant revenue for big brands.
Our upcoming report will look at ways brand marketers can gain local-channel mindshare, maximize partner participation in cooperative marketing campaigns, as well as maintain brand governance and message consistency. Stay tuned.
This article first appeared in www.cmocouncil.org
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