There’s a buoyant feeling on Main Street USA again — whether it’s in small towns or big cities — and optimism is an ideal counter to the doldrums small and medium-sized businesses (SMBs) have endured over the past year and a half.
In the May edition of PYMNTS’ ongoing coronavirus report series, Pandenomics After Vaccines: What Mass Vaccination Means For Main Street Merchants, researchers surveyed 530 Main Street SMBs in the technology, construction and contracting, retail trade, manufacturing and professional services sectors about their outlook. It’s gotten a good bit rosier since last time.
“Main Street SMBs are optimistic,” per the new installment of Pandenomics, “and half plan to invest to grow their businesses, with 61 percent in the technology sector and 56 percent in manufacturing reporting they are very likely to invest in the next six months.”
And while stating that “attitudes about the speed of recovery and the efficacy of vaccinations and their potential positive impacts on local economic outlooks vary widely between respondents in more urban and rural areas,” the new report calls upbeat moods reflected in the data “a powerful indicator that … SMBs have enough faith in vaccination efforts to pump more resources into their operations as 60 percent of all Main Street SMBs that believe vaccinations will be successful are very likely to invest in their businesses in the near future.”
Innovation And Vaccination A Potent Cocktail
Recovery timelines differ between large population centers and small communities, with 13 percent of Main Street SMB owners in rural areas saying they’ll get vaccinated within three months, compared to 56 percent of SMB owners in major metros. However, nearly 60 percent of rural respondents in our sample are already vaccinated. “These findings imply that the vaccination rate among rural Main Street SMB respondents is plateauing,” per the report.
Pandenomics After Vaccines also delves into areas of innovation among Main Street SMBs as vaccinations proceed, finding that “88 percent of Main Street SMB owners saying they implemented some type of innovation, such as touchless technology and digitization, during the pandemic. Main Street SMBs in the technology sector lead on these investments, with 96 percent reporting that they implemented innovation strategies during the pandemic.”
Fully 70 percent of Main Street SMBs overall “have invested in equipment that supports touchless experiences, 56 percent have expanded their product offerings and 47 percent have invested in digital transaction support.”
Additionally, “more than 80 percent of Main Street SMBs now use the web to conduct at least part of their business, though most combine their online presences with physical interactions, such as in-store visits or promotional events. Just 18 percent have an online-only presence. SMBs’ social media pages and websites account for the highest increases in sales relative to March 2020 at 23 percent and 25 percent higher, respectively.”
Investment Plans Reveal Post-Pandemic Enthusiasm
Among the most revealing findings are those that circle back to the new optimism on Main Street, as more SMBs feel the light at the end of the tunnel isn’t an oncoming train.
For example, future investment plans are one excellent barometer of enthusiasm.
According to Pandenomics After Vaccines, “Half of all Main Street SMBs are planning to make investments in a variety of areas, such as in new employees, additional equipment and advertising.”
That interest breaks down as follows, per PYMNTS’ latest study: 61 percent of Main Street SMBs in the technology sector say they are “very” or “extremely” likely to invest in their businesses in the next six months, which is 56 percent in manufacturing, 54 percent in professional services and construction and contracting, and 37 percent for retail trades. We found that only 25 percent of SMBs are unlikely to invest more heavily in 2021.
Those investments are partially based on projections, and the projections from Main Street SMBs are similarly sunny as Q2 2021 begins moving in the right direction on a few fronts.
“Those optimistic about the vaccination rollout are most likely to expect revenue growth, with 60 percent of Main Street SMBs that believe that vaccination will be ‘very or ‘extremely’ successful stating they will grow this year compared to 48 percent among those that are pessimistic about the vaccine’s effectiveness,” per Pandenomics After Vaccines.