In today’s rapidly evolving business landscape, digital transformation is no longer a choice but a necessity for Small and Medium-sized Businesses (SMBs) to survive and thrive. In Mindshare, Cargo’s latest market research, over 400 SMB decision makers were surveyed to better understand emerging technology awareness and usage. Let’s explore the key takeaways that shed light on the current state of digital transformation and its implications for businesses who wish to market their products to this key SMB audience, accounting for 99% of businesses in North America.
Technological Awareness and Utilization
Digital payment platforms and communication tools have emerged as key drivers of business efficiency and growth. The data reveals that SMBs have both high awareness and high utilization rates for these technologies, no doubt accelerated by the pivots required to continue normal operations during the COVID-19 pandemic. 71% of respondents were aware of these technologies, followed closely by cloud storage and collaboration solutions at 70%.
SMB decision makers were less aware of project management tools, CRM systems, and artificial intelligence (AI) tools, rounding out the bottom of the pack in terms of technological awareness. Due to many differences between SMBs ranging from 2-499 employees, upon deeper digging, the research underscores an evident awareness gap between large, medium, and small-sized SMBs in their awareness of specific technologies. Large firms demonstrate higher familiarity and usage of AI tools, CRM software, project management tools, and cloud infrastructure compared to their smaller counterparts.
Perhaps unsurprisingly, adoption and utilization rates amongst respondents closely mirrored awareness levels. Most notable, however, is despite ranking lowest with only 32% of respondents currently using AI, 40% plan to adopt the technology within the next 12 months.
AI Adoption and Job Displacement
AI is proving to be a transformative force for businesses, with a consistent utilization rate of approximately 32% across all SMB sizes. Notably, larger SMBs show a greater willingness to embrace AI and recognize its value, as 52% of large-sized SMBs have plans to incorporate it within the next 12 months, compared to 37% and 26% for medium and small-sized counterparts, respectively.
The introduction of AI tools has sparked concerns about potential job displacement, but the research indicates that, for the most part, SMB decision-makers are not overly worried. Less than 1 out of 4 respondents believe that AI technology will replace a human job within the next three years. Monitoring this sentiment over time will provide valuable insights into the evolving perceptions around job displacement. Presently, larger-sized SMBs have experienced more human job displacement, with 25% of large-sized SMB respondents reporting replacement of human workers, while only 8% of small-sized businesses have encountered this situation. Of course, the extent of job displacement varies significantly by industry, with the entertainment industry having the highest rate at 36% and the transportation industry experiencing the lowest at just 5%.
Technology Budgets and Decision-Making
The impact of COVID-19 on IT spending is evident as businesses swiftly adapted to the “new normal” with remote workforces, touchless payments, and other changes. Among SMBs, cost emerges as the most influential factor in technology purchasing decisions, with a significant 32% of respondents listing it as their top consideration. Surprisingly, cost outweighs even the fit of the technological product for the SMB, its features, and digital security. Interestingly, the technology brand’s Diversity, Equity, and Inclusion (DEI) aspects, as well as its Environmental, Social, and Governance (ESG) values, ranked as the least impactful factors when evaluating tech purchases. SMBs tend to prioritize practicality and affordability over brand values in their technology choices.
Furthermore, the data highlights that online retailers and direct purchases from manufacturers are the preferred avenues for technology purchases among SMBs. A considerable 40% of small-sized SMBs, 36% of medium-sized SMBs, and 40% of large-sized SMBs favor buying technology products from online retailers. This finding underscores the critical importance of a robust web presence and a seamless e-commerce platform for businesses seeking to engage with and sell to the SMB market.
Charting Course to a Digital Future
One resounding truth is clear: Embracing technology is no longer a luxury but a necessity for SMBs to thrive in today’s competitive and rapidly evolving business landscape. The key lies in recognizing the pivotal role played by emerging technologies that empower SMBs to achieve sustained growth and success. Understanding the unique budgetary considerations and preferred purchasing channels of SMBs will be a critical factor for businesses aspiring to cater effectively to this influential and diverse market segment.
By aligning their strategies with the needs and preferences of SMBs, companies can forge strong connections and capture significant opportunities in this dynamic market. In essence, “digitize or die” serves as a compelling mantra for SMBs as they navigate the ever-changing landscape of the digital age. Embracing technology with foresight and adaptability is the key to not only survival but also to unlocking the boundless potential that lies ahead. As SMBs continue to embrace the digital revolution, they pave the way for a future where success and growth are within reach for those who dare to embrace the power of technology. Interested in more? Check out the complete study here. And when you’re ready, contact us to discuss the application to your brand.