UK SMEs pivot towards online distribution and social communication as second lockdown starts
UK SMES have pivoted their business towards social media communication and online distribution as a result of the first coronavirus lockdown, Paragon Bank research has revealed.
Over half (52%) of SMEs operating online have seen their sales increase as a result of the pandemic, rising to 62% amongst those businesses with 20-49 employees, according to Paragon’s SME sentiment report ‘Covid-19: a catalyst for change amongst SMEs’.
As coronavirus restricted physical sales, the pandemic also prompted one in five (21%) of SMEs to start offering products or services online, broadening their distribution channels.
Meanwhile, nearly half of SME decision makers stated that they increased the use of social media channels to promote their products and services and increase communication with their customer base. Use of Instagram and Twitter for businesses has risen, with Instagram seeing the highest increase, at 51%.
Facebook (61%) is the most popular social media channel for SMEs to use for their online business activities. Over two fifths (43%) of those businesses that use Facebook to support their online business operations say that their levels of activity on this channel has increased since the start of the Covid-19 pandemic, while 47% have stayed the same.
The full report can be found here.
John Phillipou, managing director of SME Lending at Paragon Bank, said: “This has undoubtedly been a very challenging time for SMEs but we have continued to see resilience and innovation at the heart of our customer base.
“Businesses are evolving to the changing environment, adapting their distribution channels and evidently leveraging social media – elements that they may not have considered before the pandemic.
“Interestingly, 49% of SMEs stated that the learnings from the pandemic and the changes implemented across businesses will increase resilience in the future.”
To date Paragon has supported UK SMEs through this challenging period with over £20m in CBILS lending, with a number of deals in the pipeline due to complete.
