Online shopping has surged amid store closures and six-foot social distancing mandates around the globe. But while the coronavirus may have accelerated what was already in the works pre-pandemic, some parts of the retail sphere are having trouble keeping up — like the supply chain.
E-commerce sites and shop-from-home technologies are now essential for fashion and retail brands that wish to survive long enough to enter the post-COVID-19 world. But it turns out a massive urgency in e-commerce isn’t easy — or cheap. Even big-box retailers like Target are learning firsthand how expensive the sudden surge in an online business can be. The added rush from the upcoming holiday shopping season — and the fear that distribution systems might not be able to handle the sheer volume of e-commerce orders — likely won’t help.
Small and medium-sized businesses, many with limited or no online capabilities before the pandemic, will likely suffer the most. Alibaba, China’s B2B platform, might have the answer.
Starting Tuesday, U.S. small and medium-sized businesses — that is, businesses with 500 or fewer associates — could sign up for the Alibaba.com Digitalization Sprint for U.S. Manufacturers program.
The four-week program, which kicks off in November, offers U.S. manufacturers tips and tricks for more effectively managing digital channels. These include learning advanced skills in online marketing, selling and sourcing, among other things, to help accelerate each businesses’ digital transformation.
“We see a shift in consumer behavior that is permanent; a permanent shift to global,” said John Caplan, president of Alibaba.com’s North America and Europe divisions. “Digitalization is the only bridge to the future for American and global small businesses.
“It used to be that [businesses] could only sell as far as they could drive,” Caplan continued. “But now, using digital technology to reach the world really is the future of small businesses.”
In fact, 42 percent of the small and medium-sized businesses surveyed by Alibaba in its “U.S. B2B Small and Medium Business Survey” increased their volume of business-to-business operations online in the six months prior to September, despite the pandemic, compared to the same period a year earlier.
Even hiring practices are showing signs of digitalization and increased need for online tools. While many retailers have cut back on seasonal hires for the upcoming holiday, the same survey found that 57 percent of the small and medium-sized businesses have hired more people in the last six months, compared with the same time last year, because of digitalization. Another 79 percent of those businesses said they plan to hire more people amid the companies’ digital transformation. Firms are increasingly investing in new online capabilities.
“The disruption to retail suggests that traditional retail has a steep hill to climb to get digital,” said Caplan, who added that a lot of manufacturers are also trying to play catch-up, digitizing their systems at a rate two times faster than a year ago. “We think manufacturers who have relied on the traditional model don’t really have a playbook. A lot of businesses, small manufacturers, want to digitize, but don’t know how to start.
“Digital is the new front door of any business,” he continued. “We’re opening the door for American manufacturers so they can reach the global community effectively and benefit from the digital technology that can make a bridge for the next decade.”
Earlier this year, Alibaba rolled out digital tools for small and medium-sized U.S. businesses, such as Alibaba Freight, which enables firms to find and compare prices for international ocean and air shipping, new digital payment terms and digital trade shows.
Meanwhile, on Monday, Alibaba revealed it will purchase a $3.6 billion controlling stake in hypermarket operator Sun Art Retail Group, helping the web giant to gain even more ground in the Chinese retail market.
Back Stateside, Alibaba’s new Digitalization Sprint program, a partnership with Brooklyn Chamber of Commerce and Brooklyn Navy Yard, enables businesses to connect globally in more than 190 countries. In addition, the program will offer coaching sessions from mentors and webinars on platforms, such as LinkedIn, to help foster a sense of community.
“Digitization is no longer a nice-to-have, but a must-have for companies in every industry to bridge from surviving to thriving in the next era of business,” Caplan said.