COVID-19: Small Business Impacts

Goals

To have a broad understanding of the impact of COVID-19 on small businesses across the United States, and then secondarily Canada, Australia, Mexico and/or Japan if the information is publicly available. An ideal response would include how "shopping small" has changed with bullet points of general impact with specific examples included where available, and where people discover or learn about small, local businesses in their communities with sites, social channels, and social profiles with supporting statistics.

Early Findings

General Data

  • According to the National Academy of Science in the United States, a recent survey of more than 5,800 small businesses revealed that many small businesses are financially fragile: "The median business with more than $10,000 in monthly expenses had only about 2 wk of cash on hand at the time of the survey."
  • "Small- and mid-sized businesses in the U.S. have demonstrated a disproportionate impact from the COVID-19 pandemic, with over 43% surveyed reporting a significant to severe impact, according to findings from the CBIZ Main Street Index. The index found the majority (84%) of businesses surveyed realized some impact from the pandemic and corresponding economic slowdown. Notably, smaller businesses, those with 1-4 employees, were most severely affected by the pandemic."
  • "A survey from Tech.co found that 80% of small business owners say COVID-19 has hurt their businesses."
  • "Sixty-seven percent of people are more hopeful now than when the pandemic began and seventy-five percent plan to support small businesses as much as possible once restrictions on non-essential businesses are lifted in their areas."
  • "The average American plans to spend nearly $100 a week at local businesses post-COVID-19, up 16% versus before the pandemic, in the hopes of boosting their local economy."

"Shopping Small" Data

  • Even with browsing out of the picture and storefronts indefinitely shuttered, research suggests that shoppers have a renewed desire to shop locally. According to a Nextdoor survey, 72% of members believe they will frequent local businesses more often after this crisis. "As neighbors have new needs, local businesses are pivoting to stay afloat. On average, respondents said their business lost about 25% of revenue as a result of COVID-19. Thirty percent of local businesses have pivoted and changed the original products and services they offer."
  • Smart small businesses that invested in online shopping sites pre-COVID-19 are reaping their rewards now. "The U.S. Chamber of Commerce refers to Gary’s Wine and Marketplace, a small four-shop chain, and their mobile app which has exceeded expectations during this time. Before the pandemic, it had 2,000 users. By the second week of April, 15,000 people were using it which represents a 750% increase."
  • Shoppers don’t want to see their favorite local businesses fail. And that’s true now more than ever. The National Retail Federation reports that 49% of consumers “have made a purchase specifically to support local small businesses during the pandemic.”
  • "Consumers see their neighborhood businesses struggle, and they want to help out." Shifting dollars from big-box stores to small businesses is becoming not only popular but on-trend. “Shop local” is more than just a slogan; it’s a symbol of solidarity in the COVID-19 consumer marketplace. "Businesses have had to use unique business strategies to cope with COVID-19, and they can continue to meet consumers where they’re at by leaning into this trend."
  • This source contains the stories of five small business owners where they "discuss ways their businesses have pivoted in the face of COVID-19 and how many of those changes are here to stay."
  • Based in Philadelphia, Uncle Bobbie’s Coffee and Books was forced to adjust their business strategy after COVID-19 hit. "The store, founded by author and activist Marc Lamont Hill, is selling physical books online through a service called Bookshop and selling audio books with a company called Libro.fm. It’s hosting Zoom happy hours, wellness talks, and virtual events with authors. And in the past few weeks, it has seen a surge in online business from people wanting to support black-owned bookstores and read more about anti-racism."
  • "In Oakland, Calif., wine bar and store Ordinaire realized listing its extensive inventory of natural wine online wasn’t practical. Instead, it added an option for customers to fill out a form with their desired number of bottles, a budget, and what style wine they are “in the mood for.” The store’s staff picks the best wine for that order and sends an online invoice to the customer."

Discovering Small Businesses

  • Facebook released a “Support Small Business” sticker on Instagram and a #SupportSmallBusiness hashtag on the Facebook app to let people show their love for small businesses.
  • Facebook is also helping people connect and "quickly find essential products and services. To help them do that, [they are] exploring ways to easily connect [consumers] with local businesses on Facebook. Through Businesses Nearby people can learn what’s happening with their neighborhood shops, message them or order food and buy goods from them through third-party apps. This will also help businesses see more virtual foot traffic as they move online to stay open."

Summary Of Our Early Findings Relevant To The Goals

  • In the one hour allotted for the initial research, we were able to determine that the majority of the information requested is available in the public domain. As a reminder, Wonder only uses publicly available sources. We do not have access to paid databases or paywalled reports, but we can cite them in research for reference only [in case purchase is desired]. If that is of interest, that would clearly have to be communicated to us in any reply.
  • We were also able to provide some relevant and salient data points that standalone, and set the table for future research.
  • We prioritized American data, as per the instructions in the chat transcript, but we did note, while doing our initial hour of research, that there is global data, so that will be reflected in the scopings below.
  • Please select one or more of the options provided in the proposed scoping section below.

Proposed next steps:

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