No turning back for SMEs making the online shift
The latest iteration of the weekly Westpac SME Covid-19 Tracking Report indicates that 44 per cent SMEs have changed their business model to adapt to financial disruption caused by the Covid-19 pandemic, with one in five of those making a shift to online operations. Of those that made the online shift, 42 per cent of these businesses now intend to make the change permanent.
Of those SMEs who only operated a physical store at the start of the year, 10 per cent have moved online completely, six per cent have kept their physical store and also started trading online, while 71 per cent have kept to just having a physical store.
In terms of sectors who moved their businesses entirely online during the pandemic, education and training (23 per cent) are the frontrunners, followed by arts and recreation (13 per cent) and retail trade (12 per cent). On the other hand, only five per cent of food and beverage businesses were able to move online completely during the pandemic.
On a state level, Victoria has seen the biggest proportional shift towards online stores versus physical stores of any state.
Westpac’s Davidson Institute Financial Education specialist Lali Wiratunga said the results from the Covid-19 Tracking Report underlined the resilience of Australian SMEs when faced with a once in a generation challenge.
“This year has been extremely challenging for many small businesses, but many have adapted,” Wiratunga said. “We’ve seen more change in the way businesses operate in the last year than we’ve seen in a very long time.
“Many businesses, particularly those in Victoria, have shifted part or all of their business model online,” Wiratunga added. “What’s great to see, is that three-quarters (74 per cent) say it’s made their business easier to run, and a further 60 per cent say its reduced operating costs.”