Northern Small Businesses Optimistic About Reopening According to PayPal
As ‘Freedom Day’ approached in England, over two thirds (69%) of UK small and medium-sized enterprises (SMEs) said they felt optimistic about the easing of lockdown restrictions.
PayPal’s inaugural Business of Change report polled 1,000 UK SMEs, including over 500 business owners, and found that while the pandemic did affect businesses adversely, the lifting of lockdown restrictions is bringing a fresh sense of optimism, as SMEs across the UK look to recover and rebuild.
Of the Northern regions, the North East has emerged as most positive about the restrictions lifting, with two thirds (66%) of SMEs feeling ‘confident’ about the reopening – compared to an average of 57% for the North West and 48% in Yorkshire and the Humber.
As restrictions ease and we collectively move towards the ‘new normal’, PayPal’s report identified distinctive areas of focus that are helping Northern regions to rebuild their future and ensure a positive impact on their local economies.
Prioritisation for local communities
Hope and optimism in Northern communities is at the forefront of business confidence. Interestingly, over half (52%) say they will prioritise local customers over international sales during the next 12 months. The majority of SMEs (83%) are also planning on maintaining or reopening their physical presence – indicating support and investment for their local high streets.
Additionally, a quarter (23%) of Yorkshire & the Humber’s SMEs say they will invest in customer engagement via online feedback methods, with one in four (24%) admitting that positive feedback from customers played a defining role in their drive to see through the tougher times of the pandemic.
North East emerging as a leading digital hub
There is a positive outlook in the North East that links to the region’s resilience and ability to adapt to new trends such as digitalisation. 86% of SMEs in the North East upskilled their workforce with new digital capabilities in order to continue trading during the pandemic – compared to a 73% national average. This compares to 68% in the North West and 60% in Yorkshire and the Humber. Social media marketing and e-commerce were the key areas for learning and development, with one in five (19%) adding them to their skillset in the last 15 months.
As COVID restrictions look set to ease across stores, one in four (25%) SMEs in the North East also stated that digital payments and cashless sales have been crucial to surviving the trading restrictions imposed by the pandemic.
As a result, over two thirds (69%) expect the majority of consumers to shop online even as restrictions lift, and 25% of SMEs in the North East will continue using social media as a core selling platform.
Digitalisation is the key for the future
Safe in the knowledge that many customers will continue to shop online, even as restrictions lifts, investment in digital payments options will be vital for Northern SMEs to recover from the sales lost during the pandemic. With this in mind, 36%t of SMEs said they will be incorporating new digital payment options over the next 12 months and nearly a quarter (23%) will invest in improving their website for trading online. However, there remains fine balance between navigating ongoing business needs with customer preferences.
The North West is one region still reliant on cash, with 49 % of SMEs in the region saying cash was their most popular form of payment, while only a quarter (27%) are currently accepting online payments through an online marketplace. Although this won’t be the norm for long, as nearly half (44%) of SMEs in the North West are looking at moving their trading operations onto online platforms to embrace the digital-first future.
Balancing Northern business priorities post ‘Freedom Day’.
The commitment of Northern SMEs to their local communities speaks volumes for the passion and understanding of their customers’ needs. The rapid migration towards digital technologies has been undoubtedly accelerated by the pandemic impact to date and will continue to be a pivotal factor in rebuilding the economy in the North, alongside the rest of the UK.
Continuing to work with and invest locally will further enable small businesses across the region to recover and rebuild from an immensely challenging period. But there remains scope for business growth by further developing and harnessing the digital skills learned during the last 15 months to channel this into a thriving, digitally engaged business mindset. Striking the balance between engaging local communities and tapping into the digital opportunities that will secure online growth and broader future opportunities will be key as businesses navigate trading over the next few weeks.
Vincent Belloc, managing director at PayPal UK, said:
"We can see that optimism in the North is high, and SMEs in this region are feeling confident about the economy reopening and restrictions lifting. However, knowing that the future for business is digital, small businesses need help envisioning how this will play into their growth. As a long-standing and trusted partner of SMEs in the North, PayPal will continue to be a pillar of support and help them achieve their ambitions."