New research from TalkTalk Business has revealed that more than half of small businesses (58%) in the UK are expecting their strongest Christmas on record, as the pandemic shift towards online shopping means consumers started their Christmas shopping earlier and are spending more.

This has led to a wave of optimism among small business owners:

• Six in ten say customers spend more with them if they shop online instead of in person
• 71% are confident that their online offering means they can have a strong Christmas even if restrictions are introduced over the winter
• Over half expect their new year to their most profitable

Small and medium enterprises (SMEs) say digital acceleration during the pandemic has been crucial to their prospects of a profitable finish to 2021. 81% invested in their digital and online services during the pandemic, and this has led to a transformation in the way businesses are operating. The same percentage (81%) say they adapted or added online services, while more than half (56%) said the pandemic forced them to make changes to their business they should have made earlier.

Of the SME owners that made changes to their business, 60% added new digital or online payment options, 55% increased their online or digital marketing, and 31% started offering home delivery/takeaway for products.

With their enhanced digital infrastructure, more small businesses now have the capabilities to process more card payments (essential in our increasingly cashless society), accurately manage their stock with up to the minute information, and bolster their online presence to cater to the growing demand for online shopping.

Accordingly, 80% of SMEs said that access to fast, reliable broadband had been vital to their business operation during the pandemic, while 73% said that their business’ dependence on broadband is only set to increase.

In 2020, internet usage by independent retailers increased by 52% during the festive period. TalkTalk Business expects this to rise even further in 2021 as some consumers adopt an online-first approach for their Christmas shopping.

Alex Regan, Distribution & Finance Controller at independent fashion retailer 304 Clothing, says the company is expecting record sales this Christmas: “Our business has changed dramatically over the past 18 months, with 80% of our domestic and global sales now coming through our website and mobile app. Retail is evolving and customers are shifting from shopping in store to online channels due to the impact of the COVID-19 pandemic.”

“Investing in our website and rolling out a new mobile app have been crucial to our growth. Sales have increased by 40% over the past year, which wouldn’t have been possible without our switch to full fibre broadband with TalkTalk Business. Looking at our sales, our customers have already started their Christmas shopping, so we anticipate this festive period to be our best ever.”

Although face to face commerce remains hugely important for small business, the push to make themselves more digitally accessible has been eagerly accepted by shoppers who prefer to undertake their Christmas shopping online. And if the government introduces further restrictions to combat the Omicron variant, then a robust digital presence will become even more critical to SMEs: 

• Nearly a quarter (23%) of consumers say all of their Christmas shopping with small businesses will be done online
• More than a third (38%) of shoppers will avoid busy high streets this Christmas as social distancing won’t be possible
• 37%are steering clear of large crowds prior to seeing family.

Jonathan Kini, Managing Director of TalkTalk Direct Consumer and B2B, said, “It is brilliant to see small business owners expecting to have such a strong Christmas, a vital period for so many enterprises. While we await the government’s response to the Omicron variant, by offering a mixture of face to face and online shopping, independent retailers can ensure they are ready to make the most of the Christmas period! 

Looking beyond Christmas and into the new year, the mood among small business owners is buoyant, in spite of the challenges they’ve faced in 2021. 75% of UK SMEs say they’re optimistic their business will grow in the next 12 months, while almost two thirds (61%) have increased their customer base.

And now that they’re more digitally enabled and better connected than ever,56% of small businesses feel they’re in a better position to grow than pre-pandemic.

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