The core benefits of digitalization include winning new customers, facilitating ease of discovery, increasing revenue and creating a modern image. Yet, economic uncertainty is influencing investments in digitalization among U.S.-based businesses.
The assessment finds that 30 percent of small and medium sized businesses have reported that they postponed digitalization expenses that are not absolutely necessary in response to the current economic situation, energy crisis, and geopolitical threats. Each of these factors can create a barrier to digital transformation.
These new data come from IONOS, a platform designed to help businesses get online easily and quickly, suggests that the U.S. is lagging behind Europe in digitizing small and medium businesses.
The survey was based on 4,800 U.S. and European small and midsize business professionals regarding digitalization, economic and cybersecurity resilience. The survey results cover a number of different areas, including the robustness of a company’s online presence.
In terms of website development (which is the key forward-facing feature of digital transformation), the report finds:
- U.S. falls behind in having websites and company-specific domains.
- Use of a company-specific websites declined by 21 percent from 65 percent in 2022 to 44 percent in 2023 (that is firms using www.companyname ….).
- Use of email addresses, including a company-specific domain, declined 16 percent from 60 percent in 2022 to 44 percent in 2023 (that is firms using (… @companyname …)).
- The U.S. business base is also less enamoured with digitalization.
A firm embracing digital technology also needs to consider online office solutions, an online shop, virtual meetings and online marketing and communication. Equivalent firms in Spain (88 percent), Germany (81 percent), the U.K, (79 percent) and France (80 percent) mark in their estimation of the importance of digitalization. Yet only 75 percent of U.S. companies of a similar size share that view.
As a further indicator of U.S.-based enterprises lagging behind, the report identifies that 24 percent of firms plan to invest less heavily in digitalization due to the current economic situation.
In terms of the best strategies, as identified from the mechanisms put in place by the leading players in the small business market, firms should be ensuring that they have a company website to build awareness and that they establish and maintain a robust online presence, listing services and location so that new customers can find them.
Another important consideration is with firms who elect to regularly communicate with their customers through newsletters and socials to share special offers. These types of schemes help to build and strengthen brand awareness and loyalty.
