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Pandemic shift to online shopping leaves small businesses expecting best ever Christmas

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More than half (58%) of small businesses in the UK are expecting their best ever Christmas, as the pandemic shift towards online shopping means consumers are starting their Christmas shopping earlier and spending more. 

New research by connectivity provider TalkTalk Business found that two thirds (65%) of small and medium sized enterprises (SMEs) say shoppers have started their Christmas shopping earlier than usual, while 70% say their regular customers are now completing their Christmas shopping with them online instead of in person.

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

  • Six in ten (60%) say their 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 (50%) expect their new year to their most profitable
  • 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, while 71% expect to do all or the majority of their Christmas business online this year.

New TalkTalk Business network data shows just how significant the shift towards online shopping has become for SMEs. 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.”

Regan adds: “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:  

  • 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 they can’t social distance
  • 37% are steering clear of large crowds prior to seeing family.

Jonathan Kini, Managing Director of TalkTalk Direct Consumer and B2B says: “It is brilliant to see small business owners expecting to have such a strong Christmas, a vital period for so many enterprises. By offering a mixture of face to face and online shopping, independent retailers can ensure they are ready to take advantage of consumers starting their Christmas shopping earlier than usual.”

He adds: “Businesses have not only adapted for survival, but are now more robust, versatile and future ready. Part of that is in them being more digitally enabled and connected. To ensure more new start-ups can benefit from the latest technology and increased digitisation, we’re rolling out affordable fibre broadband across the UK at pace, which is now available to businesses from as little as £19.95 a month.”

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. 

More than half (56%) say they are now in a better position to grow than pre-pandemic, while the same number (56%) said the pandemic forced them to make changes to their business they should have made earlier.

With digital acceleration playing such a pivotal role in business transformation, it’s no surprise that 80% of SMEs said that having 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.

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