As a nation and society, the idea of digitalization has emerged as a central theme in many of our policies and initiatives. How are local businesses and SMEs leveraging this trend to establish themselves in the online space?
Ushering in the Digital Age
In a time not too long ago, traditional media reigned supreme. Being able to afford billboards and TV advertisements reflected how successful a company was. Bigger physical advertisements meant more audiences got to know about your product. Longer advertisements on TV meant a wider range of audiences could listen to your sales messages and potentially convert into paying customers.
In the era of traditional media and print, the success of a business relied on making your products tangible and physically accessible for clients, and such limitations were directly tied to business costs.
Back then, allocating the same ad budget to compete with larger corporations was simply out of the question. Smaller businesses would not have the same edge over more established ones simply because such advertisements were too expensive to put up. Many aspiring entrepreneurs would scramble to get leads either via word of mouth or bid for smaller, cheaper physical ad spaces in hopes of catching a prospective lead by chance.
The reality of our business landscape today, however, is vastly different. Many digital technologies that have emerged over the past decade have begun replacing the use of physical assets with digital ones, in turn presenting a new opportunity for smaller companies to do more with less.
Much of digitalization’s capacity for improving business capabilities stem from its ability to circumvent physical barriers to entry for work processes that require communication, collaboration, and manual labour. Simply put, a well-established online presence, coupled with a digitally savvy team can potentially allow businesses to do everything, everywhere, all at once.
When it comes to retail businesses, the clearest example of digitalization’s impact on the business landscape would be the increasingly widespread adoption of e-commerce. As of 2021, e-commerce sales worldwide are estimated to have a market value of more than 4.9 trillion US dollars, a number which has more than tripled in size since 2015.
Existing SaaS platforms such as Shopify and Wix allow businesses to begin selling their products worldwide with a few simple clicks — these platforms offer one-stop solutions and add-on features such as automated email marketing services, bookkeeping, and payment solutions, allowing aspiring entrepreneurs to oversee their operations without the need for a physical store or office.
Yet, e-commerce is merely the tip of the iceberg when it comes to the empowerment of digital businesses — business models also appear to be shifting towards the idea of digital inclusivity and community building.
Leading a Digital Tribe
An often overlooked element of digitalization is its capacity for two-way interaction and social proof. Digital assets such as an online marketing campaign or a website uniquely differ from traditional media in the sense that it allows for real-time feedback and instantaneous customer service, allowing businesses to build better relationships with their clients and directly tailor their services to their needs.
As much as businesses strive to achieve their sales target every quarter, they are also becoming increasingly aware of the importance of building their followership through the use of social media and a suite of other communication tools.
An example is Discord, an online communication platform originally designed for the gaming community. Recently, Discord has begun to launch theme-based community servers seeking to bring together like-minded users in the digital space.
Instead of spending more budget to compete for larger physical ad spaces in public spaces, companies are giving their all to establish their identity in the digital space, be it in the form of website rankings, reviews and social media presence, and for good reason.
Studies have shown that well-established online communities generate as much as a whopping 6469% of a return on investment in return for their community-building efforts!
Today, a single individual with an established community of followers can generate thousands, if not millions of views for their content in a matter of hours without even spending any amount of money on advertising costs.
Towards a Digital Utopia
As we begin to collectively move away from traditional brick-and-mortar businesses, billboard marketing and TV advertisements, it is crucial to gain an understanding of the essential elements required to build a strong digital presence as a business.
However, a publication by OECD in 2020 reports that a substantial number of SMEs have still not caught on to the benefits of digitalisation, highlighting a pressing gap in the adoption of digital technologies compared to larger corporations. Ironically enough, a digital divide has emerged amongst bigger corporations and SMEs once again, and this disparity is what we believe leads many aspiring entrepreneurs from reaching their fullest potential.
If you are a business owner struggling to make sense of all the information available online, we get it.
With the sheer volume of articles and conflicting strategies purported by marketing gurus online, it's easy to get lost in the sea of information.
No two businesses are completely identical in terms of resources, industry, and business objectives, and neither should their digitalization strategy be as such. Being clear about your goals is often the hardest first step in striking a balance between the usage of digital technologies and an overreliance on the tools available in the industry.
An important first step and question you should consider asking yourself would be what processes you would like to focus on (i.e., HR systems, building a website, digital marketing, digital payment solutions, etc).
For example, retailers and F&B businesses may benefit from a stronger e-commerce presence, whereas customer service providers and consultants may better leverage customer relationship management software.
It’s important to realize that not everything needs to be digital from the get-go — the path to digitalization is going to be a journey that rapidly evolves to the whims of newer technologies and changing demands of your business.
Having a well-prioritized digitalization strategy that maps well to your business needs is crucial, and your choice of platforms and tools (e.g., social media channels, website domains, SEO services) required to achieve this usually falls into place easily thereafter.
Embarking on Your Digital Journey
The choice to prioritize a certain aspect of digitalisation over another largely depends on the sector of your business, as well as your audience's needs. From an organizational and Human Resources perspective, smaller teams may also want to consider upskilling their workers in terms of their digital fluency through basic training courses and workshops.
Confused about where to begin? Depending on your current level of expertise or time commitment available, it may be also better to either outsource your digital efforts to a professional consultant directly, rather than taking a shot in the dark.
Drop us an email here and we’d be happy to support you in your digitalization journey, however big or small.
Hatch is an impact-driven business with the mission to make digital and design opportunities accessible for all. That’s why we are committed to sharing valuable resources like these freely and openly for the community.