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The ongoing 2020 pandemic has taken a major toll on all levels of the U.S. economy, from major corporations on Wall Street to mom and pop shops on Main Street. Forced closures, stringent social distancing protocols, and stay-at-home orders have made it incredibly difficult for businesses to operate. In some cases, this crippling combination has forced some companies to close their doors for good. 

However, the State of Small Business Marketing survey conducted by Bluehost reveals how small businesses around the U.S. are persevering through this economic uncertainty, adapting to unforeseen changes, and increasing digital marketing tactics. 

The survey was conducted in August 2020 and included 500 small business owners with fewer than 100 employees. The purpose of the research was to highlight challenges small businesses face as they transition online, adapt to e-commerce, and adjust their outlook on future pain points, obstacles, and potential opportunities. 

So, what did we learn? 

  • The 2020 pandemic has underscored the importance of digital marketing for small business owners. 
  • Most have come to view their website as a critical component of their businesses’ overall success. 
  • Most small business owners are feeling the economic impact of the pandemic and are looking for ways to overcome these challenges. 
  • Despite the obstacles facing small businesses, many owners remain optimistic about the future. 
  • There’s a readiness to persevere, adapt, and make key changes for future growth. 

“The small business community has faced unparalleled challenges in the wake of COVID-19 pandemic, and their response speaks volumes to the resilience of small businesses. In an increasingly digital era accelerated by the pandemic, small business owners are adapting their business strategies to focus on online and marketing efforts.”

Suhaib Zaheer, SVP and General Manager of Bluehost

Small Businesses are Resilient to Economic Change

Small business owners are keeping the pandemic’s economic realities top of mind. Small business owners cite their top concerns for 2021 as securing new customers (44%), lingering economic impacts from COVID-19 (30%), and lower sales/lower consumer demand (21%). 

Given these apprehensions, only 16% of small business owners have added a new revenue source since the pandemic started. 

Optimism In The Face of Uncertainty 

Surprisingly, small business owners say they’re confident about the future of their operations. Almost three in four (72%) of small business owners report feeling optimistic, while only 9% report feeling pessimistic. Instead of giving up, over a quarter (27%) of respondents turned their passion project or hobby into a full-time job when faced with unforeseen obstacles from the 2020 pandemic. In addition, we saw more female entrepreneurs leave behind the traditional 9-5 job to launch their business than male (73% female vs 56% male).

These percentages underscore the resilience of the average entrepreneur even in the midst of economic woes. 

Websites are Integral to Success  

Small businesses have had to find ways to pivot during this pandemic to serve their customers better. This required ditching old ways of thinking, investing in digital solutions, and a little bit of learning along the way. 

During these confusing times, it’s critical for current and potential customers to have access to important information regarding your operations. Having a strong digital presence has never been so paramount causing small business owners to focus on online marketing efforts.

Nearly 70 percent (69%) of small business owners recognized the importance of an increased online presence during the pandemic. In fact, 54% of owners reported a boost in website traffic since the beginning of quarantines. 

However, only 61% of respondents said they had a website. Those small business owners without websites were found to be less optimistic about the future of their company than those with websites. 

Resulting Online Changes 

Due to the COVID-19 pandemic, small business owners have had to rely on their online presence and marketing tool more than ever before. The importance of having a strong digital presence has been accelerated in the past six months causing small business owners to focus on online marketing efforts.  

Small businesses are implementing important changes such as making changes to their website (39%), expanding their social media presence (31%), increasing marketing efforts (30%) to succeed during this trying time.

The Importance of Great Communication: Sharing Updates and Important Information 

Many small business owners already saw their website as an integral component of their overall operation. However, the recent pandemic has highlighted the importance of having digital marketing for the purpose of communication. 

Over the past year, small business owners have been more active on their websites in order to keep clients abreast of any changes in operating hours, service offerings, payment processes, and other important areas. Sharing pertinent information online is one of the quickest ways to communicate with a large number of people. Understanding the importance of digital marketing in this role is key to making these changes.

According to the survey, the most common changes owners made to their websites in light of the pandemic are:

  • Including social media links (45%)
  • Updating its wording or language (42%)
  • Adjusting the website to make it more mobile-friendly (40%)
  • Re-designing the website (39%)

The Future is Definitely Digital 

Revenue loss is one of the hardest blows small business owners have suffered from this economic downturn. While the vast majority experienced some loss, there was a clear difference in severity between businesses with websites and those with physical locations. 

  • 49% of small business owners with online stores reported a boost in sales during this time.
  • Only a quarter of the respondents with online stores reported a decrease in sales. 
  • 61% of those with brick and mortar stores saw a decrease in sales. 

The Importance of Online Stores to Success

Since the pandemic began taking a toll on the economy, the vast majority of small business owners (92%) reported that it was important to be able to sell their products or services through a website. 

Acknowledging this reality, nearly half of respondents (48%) say they have implemented an online store within the past 11 months. Of those small business owners who don’t yet have an online store for their website, 28% report planning to add one in the future. 

eCommerce: A Lucrative Opportunity Amidst the Pandemic

Building an online store isn’t just about staying afloat for small business owners. While this change might be necessary for some to overcome the current economic challenges, websites with online stores present a lucrative opportunity. 

Small business owners who are optimistic about future sales place a significant monetary value on online stores. Just under a third (33%) of respondents see all of their revenue coming from online avenues. 

As mentioned before, about half of small business owners (49%) of small business owners saw an increase in online revenue since the 2020 pandemic began. As the holiday season approaches, 65% of participants said they anticipate yet another increase in online sales. 

Unique Challenges in 2020

The small business owners of today face unique challenges when operating an online store as a primary component of their overall business. Those looking to create an online store have some learning ahead of them. Only 24% of respondents are confident in their knowledge of building an online store. 

Creating an online store is just the first step. The next step? Figuring out how to implement it. 

  • 30% of respondents reported difficulty attracting relevant or high-quality traffic to their website 
  • 25% reported finding the appropriate target audience or market was a challenge
  • 25% cited search engine optimization as difficult
  • 24% said remaining competitive with other businesses on shipping and pricing was a concern
  • 23% reported data security as a challenge, given the complexities of online data storage and protection.

Is 2020 The End of Physical Stores?

As many small business owners shift their attention online, it’s interesting to see what the future holds for brick and mortar stores. Is this a small hiccup in the grand scheme of things or an unprecedented change with a lasting impact?

Respondents see their online sales playing a larger role in the upcoming year than traditional in-store interactions. Three in four (75%) of small business owners predict their online sales will increase in 2021. 

Even more telling is how respondents with brick and mortar locations feel about this physical component of their business. Nearly half of small business owners (48%) report no need for a physical store. Furthermore, only 20% of respondents plan on reopening a physical location for their small business within the next year.

The Promise of a Prosperous Holiday Season 

The 2020 holiday season is poised to be an opportunity for small business owners to make up for some of the losses incurred during the pandemic. Many owners are optimistic about their online sales as e-commerce shopping is projected to significantly outperform in-store shopping, given the current health situation. 

Nearly two-thirds (65%) of respondents reported they are anticipating an increase in online sales during this coming holiday season compared to the previous. Conversely, 31% of small business owners expect physical location sales to decrease during the same time. 

These expectations underscore the importance of digital marketing strategies for small businesses in the immediate future. 

Planned Online Strategy Changes

In anticipation of a lucrative holiday season, many small business owners are already considering some changes to their online strategy. 

Over a third (36%) of participants intend to increase their social media marketing over the next few months. Also, almost three in ten of respondents (28%) plan to increase communication with customers via email. 

However, with 31% of respondents reporting no plans to implement changes, not all small business owners are thinking the same. 

Final Thoughts: The Importance of Digital Marketing in the Post-Pandemic Age

For many small business owners, the importance of digital marketing has never been so critical. 

As health and safety protocols make it harder to shop in-person, customers are moving online. Small businesses that recognize this change and the importance of digital marketing will have a leg up on their competition. 

The pandemic is changing how people shop and interact with businesses in the immediate future. But this unprecedented occasion might impact the habits and expectations of customers for years to come.

No matter what the future holds, the importance of digital marketing can’t be understated. It’s how you connect with potential customers, advertise products and services, and ultimately make an income. 

“From restaurants to retail stores, all small businesses continue to shift their business online and start or grow their web presence. Bluehost will remain a partner for small businesses, providing easy-to-use products and resources needed to help unlock their business’ full potential online.”

– Suhaib Zaheer
  • Machielle Thomas

    Machielle is a content enthusiast who has a passion for bridging the gap between audiences and brands through impactful storytelling. Machielle has also spoken at dozens of WordCamps throughout the years.

    Texas State University
    Previous Experience
    Brand Content, Content Marketing, Brand Lead, Operations Lead, Course Instructor
    Other publications
    Shopify, Contently

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