The PYMNTS series of special reports dubbed “Pandenomics” — a portmanteau of “pandemic” and “economics” for the uninitiated — continues tracking these forces as one influences the other.
For the latest report, Pandenomics: The Digital Transformation Of Main Street SMBs, researchers surveyed nearly 640 small and medium-sized businesses (SMBs) with physical stores nationally on aspects of the Main Street recovery, how they’re handling curveballs like the Delta Variant, labor shortages, and the digital transformation journey they’re taking — although not far enough in many cases.
Here’s the kicker: despite gains made, many SMBs still see themselves on shaky ground 18 months into the pandemic. Where they are located is playing a central role.
Noting, “The strong majority of Main Street SMBs still believe they are far from where they were prior to March 2020, as 76 percent say their local communities have yet to recover from the pandemic’s impact,” the new report adds that “Main Street SMBs in large, metropolitan areas such as New York City, Los Angeles, Chicago and Houston are by far the most likely to say their communities have recovered from whatever damage the pandemic may have inflicted,” yet 67 percent of them “maintain they have a way to go before they truly return to normal.”
Renewed COVID Fears Causing Drag
While optimism and signs of recovery are all around, SMBs feel like the delta variant and ongoing vaccination issues are slowing the Main Street comeback, in some cases considerably.
Per the new study, “The majority of Main Street SMBs say their communities’ economic health hinges on their safety from contagion, and that economic recovery is impossible as long as the pandemic continues. Seventy-five percent say their economies cannot recover until there is a decrease in the number of community members contracting COVID-19, and 74 percent say they cannot recover until there is a widely available treatment for COVID-19. We also found that 69 percent say their economies cannot recover until their community members are fully vaccinated.”
Government restrictions loom large in SMB sentiments as measured by PYMNTS, with the new Pandenomics report stating that “Seventy-one percent say their local economies cannot be repaired until there is an increase in demand for local workers, for example, and 64 percent say the prices of goods and services must decrease for their economies to recover. This strongly suggests that many communities are struggling to grapple with a highly volatile labor market and rising inflation rates.”
Digital-Shifting SMBs Doing Better on all Fronts
Those looking for a silver lining find it among SMBs that made their digital shift earlier and in a more top-down fashion, bringing their operations fully in line with consumer expectations.
“Touchless payments is one of the innovations that has helped Main Street SMBs drive sales since March 2020. Our research shows that the Main Street SMBs that invested in touchless payments are 49 percent more likely to have seen their revenues increase in 2020 than decrease, for example, with 44 percent of those that have invested in touchless payments innovations saying their 2020 revenues exceeded 2019 levels,” the study states.
Moreover, 67 percent of Main Street merchants that adopted touchless payments and similar digital tools “are confident about their 2021 revenues, meaning they are more than five times more likely to expect that their revenues will increase rather than decrease in 2021.”