If you're looking to gain a competitive advantage to grow your business in this challenging climate, the survey suggests that investing in digital technologies could be the springboard your business needs to emerge from the recession stronger and better positioned for growth.
Our survey found that high-growth businesses in Alberta and Saskatchewan were more likely than others to use digital technologies to support their sales and marketing efforts and make their processes more efficient.
Combining digital technologies and diversification
To maximize growth, business owners may want to consider combining technology investments with a strategy to diversify their operations. In my last blog post, I shared additional findings from the same survey that suggest that companies that diversify through strategies like pursuing new markets and launching new products are more likely to experience strong growth.
Our survey of 500 small and medium-sized business owners and decision-makers in Alberta and Saskatchewan found that more than three-quarters are already using at least one type of digital technology. Marketing tools were the most popular, followed by creating an omnichannel customer experience and selling products and services online (Chart 1).
Chart 1. Percentage of Alberta and Saskatchewan SMEs using the following digital tools
Overall, 85% of companies that experienced strong revenue growth (more than 10% ) in the previous year used at least one digital technology.
85% of companies that experienced strong revenue growth (more than 10%) in the previous year used at least one digital technology.
In particular, companies that had automated their production processes or used digital marketing tools were more than twice as likely to have experienced rapid growth as those that had not.
Figure 2. Percentage of companies that experienced strong revenue growth in the last 12 months (10% or more), by their use of digital tools
Our survey also confirms that the use of digital tools has provided a significant advantage to businesses during the COVID -19 crisis . Overall, 82% of business owners who said COVID-19 had a positive impact on their business used at least one digital technology.
A well-established trend accelerated by the COVID-19 crisis
The success of businesses using digital tools can be explained in part by the fact that they were well positioned to take advantage of the growing popularity of e-commerce in the wake of the COVID-19 crisis .
In fact, during the first three months of the health crisis, online sales exceeded the level of the 2019 holiday season , which is usually the busiest of the year.
These new online shopping habits are likely to continue after the crisis is over. Our data shows that 50% of older and younger Canadians have made at least one new type of online purchase since the beginning of April. According to a summer survey of consumers conducted by Léger, eight out of 10 Canadians who have made new types of online purchases intend to continue doing so after the crisis.
National survey finds business owners are going digital
In another recent national survey, we found that business owners are placing a high priority on investing in technology as they work to recover from pandemic lockdowns.
The survey of 1,000 Canadian small and medium-sized businesses found that business owners see increasing investment in technology as their second priority during the recovery, after restoring their business's finances.
Among business owners who plan to increase their investments in technology, 58% said the tactic would help them improve their competitive advantage in the wake of the COVID-19 crisis , while 46% said it would help them stay in business.
Digital technologies drive innovation
Meanwhile, our survey of business owners in Alberta and Saskatchewan indicates that the use of digital technologies is associated not only with stronger growth, but also with more innovation.
The survey found that firms that had launched an shareholder database innovation in the previous three years were more likely to have used digital technologies than those that had not innovated (Chart 3). This is an important finding because studies have shown that innovation is the most important success factor for small and medium-sized businesses.
Figure 3. Technology use among firms that launched an innovation in the last 12 months in Alberta and Saskatchewan
Our survey also found that companies that invest in research and development are twice as likely to experience strong growth and innovation.
Investing in digital to return to growth
Given the survey results, it's clear that in addition to diversifying your business, you should also focus on investing in digital technologies to boost sales, streamline operations and drive innovation as the economy recovers from the pandemic and falling oil prices.
In doing so, you'll follow in the footsteps of the most successful businesses in your area by building a business that has the tools to grow and thrive in the months and years to come.
