Delivering success
Small businesses ramped up their digital presence in response to the pandemic. What worked and what didn't? Consumers and business owners give their verdicts.
If you want your business to be an online success there are a few simple rules - make it look great, keep your address short, use a '.com.au' domain and offer free delivery and easy returns.
These are the hallmarks of reliability and trust that consumers use to navigate a crowded marketplace, as revealed in a new report on Australia's e-commerce world.
The Online State of Australia's Small Businesses 2021 is a comprehensive survey of 752 business owners and more than 1,000 consumers in the wash up of an extraordinary year.
The annual report, conducted by Crazy Domains, delves into business and consumer trends as well as the impact of COVID-19. Chief executive of Dreamscape Networks (owner of Crazy Domains) Mark Evans said businesses had scrambled to adjust to both changing consumer demand and government restrictions in the past year.
"Digital transformation hasn't been caused by the pandemic, but it has certainly accelerated it. Endless digital solutions have been tested and scaled during the pandemic," Mr Evans says.
"Take the food and beverage industry. They were the most disrupted industry and the most likely to adapt, with two in three changing their approach to their business, sales or marketing as a result of the pandemic. Innovations from new takeaway menus to home delivery meal kits and outdoor dining meant they've not only survived but many have thrived."
The same was true across sectors as both customer-facing and B2B companies adjusted to a new way of doing business, with most expanding or revamping their online presence. The report found:
  • 46 per cent of Australian small businesses became more active on existing social media.
  • 34 per cent built new websites.
  • 31 per cent set up new social profiles.
  • Around a third of all small businesses offered their products or services online.
  • 7 per cent invested in online meeting or collaboration tools.
But what has worked? And what hasn't? The Crazy Domains report provides many key learnings for small business.
Social media is secondary
The pandemic and recent Facebook news content debacle drove home to many business owners that while a social media presence is valuable, a company website is vital.
Survey results reinforced this, with consumers rating a company website four times more important than social media when making a purchasing decision. This result was strongest for Baby Boomer and Gen X consumers.
"Most small businesses already felt they were getting a better return on their investment from their website than social media, which is consistent with Australian consumers also preferring websites when learning about a new business and when deciding to make a purchase," Mr Evans says.
Trust is key
Many business owners reported they grappled with building trust in a marketplace where face-to-face meetings or allowing customers to touch and try products was not possible.
Most reported building credibility as their biggest issue after working capital and sales/networking.
"Conveying credibility through digital channels can be tricky, but there are some key signals consumers quickly pick up on," Mr Evans says.
The report found:
  • The vast majority of consumers (82 per cent) trust '.com.au' domains above all others. It leads '.org.au' (64 per cent), and is well ahead of '.net.au' (50 per cent).
  • 59 per cent of consumers think an excessively long domain name is unprofessional (anything over 20 characters may annoy).
  • Numbers or dashes in a web address may also dent your credibility with 39 per cent of consumers rating numbers unprofessional and 29 per cent wary of dashes. (Interestingly, this rises to 37 per cent for Gen Z consumers who object to domain dashes, such as www.crazy-phones.com).
Websites: form and function
Consumers will judge a company by how professional a website looks including company-specific email addresses, rather than generic Gmail or Yahoo addresses. Original content, such as an 'about us' can also help build trust, along with a privacy and returns policy.
According to the survey, the top reasons given for abandoning a site on a first visit include:
  • Difficult to navigate (53 per cent).
  • Lacking security and privacy (47 per cent).
  • Slow loading time (45 per cent).
  • No return and refund policy (44 per cent).
  • Poor visual design (42 per cent).
  • No 'about us' or FAQ section (28 and 26 per cent).
Clinching a sale
What prompts consumers to decide to do business with you online? According to the report it's all about establishing credibility, then making it easy, fast and instilling trust that mistakes will be remedied. Consumers said the major factors influencing their purchase decisions were:
  • Free or cheap delivery (61 per cent).
  • Good reviews/ratings (51 per cent).
  • Exchange/return/refund policy (46 per cent).
  • Fast delivery (45 per cent).
  • Great range (44 per cent).
  • Good customer service (43 per cent).
Online at a tipping point
The pandemic period has prompted a permanent shift in habits, with Baby Boomers the only generation to still overwhelmingly prefers bricks and mortar shops.
"As you'd expect, online shopping in Australia peaked during the national lockdown, but nearly half of all purchases are still being made online," Mr Evans said.
Across Gen X, Millennials and Gen Z consumers, the survey noted a sustained 5-10 per cent increase in online shopping post-COVID, sounding a warning to traditional storefronts with no digital presence.
Interestingly, the survey found most small businesses in Australia did not significantly increase their online marketing spend but focused on setting up or revamping their website to capture increasing number of consumers online.
Download the Online State of Australia's Small Businesses 2021 report here.

The information provided in this document is a selection of information taken from publicly available sources and is current as at the date specified in the information. It does not contain all information or all public websites that may be relevant to our brokers and their customers. Please note AFG does not provide tax, legal or accounting advice. Any information provided is of a general nature and/or for illustrative purposes. It does not take into account our broker's or their customer's objectives, financial situation or needs and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. AFG encourages our brokers and their customers to consult their own tax, legal and accounting advisors before engaging in or considering the appropriateness of any transaction.
 
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