$60m to boost small business digital skills paying off


JOSEPH JOHNSON/STUFF

Appleby Trading owner Steve Ayers says the Digital Boost programme for small businesses transformed his online sales of video games and pop culture collectibles.

Steve Ayers’ Christchurch lounge is still packed with the video games and pop culture collectibles he sells online, but just about everything else about his business has changed in the space of six months.

Inspired by online tutorials for small businesses, Ayers quit dabbling in whiteware to focus on what sold best, rebranding as Appleby Games with a new logo and a new online shop.

The pay-off was a significant jump in revenue. “It’s actually a bit frightening seeing some of those figures for sales and projected turnover.”

Ayers is among 42,000 people from more than 26,000 businesses dipping into the 500-plus videos, chat sessions and daily live workshops with experts, all available online through the Ministry of Business Innovation and Employment’s free Digital Boost programme.

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Fears of cybersecurity breaches and fraud, along with lack of skills, and cost were the main reasons given by small businesses reluctant to make greater use of digital tools when they were surveyed last year.

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Fears of cybersecurity breaches and fraud, along with lack of skills, and cost were the main reasons given by small businesses reluctant to make greater use of digital tools when they were surveyed last year.

Launched with $20 million from the Covid-19 response and recovery fund, the scheme got a further $44m in the last Budget with the goal of reaching another 60,000 sole traders, small business owners and their employees over the next two years.

After the pandemic hit, global management consultancy McKinsey and Company claimed Covid-19 had forced the world to do five years worth of digital adoption in just eight weeks.

But Digital Boost director Malcolm Luey​ says New Zealand’s early return to normal life meant our progress plateaued compared to other countries locked down for much longer, and we risk getting left behind.

A survey of 2280 businesses done 12 months ago showed New Zealand businesses scored just 51 out of 100 in a digital score index designed to measure their access to, use of and skills in the digital arena.

Only half of New Zealand businesses had an online presence in the form of a website, social media account, or by selling on platforms such as TradeMe or Alibaba.

Adoption of cloud-based services ranged from accounting software (49 per cent) to payroll (39 per cent), and 14 per cent of businesses used no digital tools at all.

Ministry of Business, Innovation and Employment digital policy director Malcolm Luey says the Digital Boost Live app allows businesses to readily access training on their cell phones, and an alliance of 20 major businesses is offering discounted or free products and services to participants.

SUPPLIED

Ministry of Business, Innovation and Employment digital policy director Malcolm Luey says the Digital Boost Live app allows businesses to readily access training on their cell phones, and an alliance of 20 major businesses is offering discounted or free products and services to participants.

A recent MBIE report on the digital capability of New Zealand businesses says about a third of those strongly focused on increasing revenue still did not have an online presence, and pressures from the impact of Covid-19 lockdowns meant digitalisation had been “demoted” as a business priority.

Top barriers were concerns about cybersecurity, lack of skills, and affordability.

Lower costs and in person training and assistance were cited as key factors in encouraging greater digital adoption.

Achieving that post-pandemic has to become an imperative rather than being an aspiration, according to a report on unlocking New Zealand’s digital potential,

Prepared by Google parent Alphabeta, it says fully leveraging digital technologies by 2030 could be worth an additional $46.6b a year, or the combined GDP of Canterbury and Hawke’s Bay.

Luey​ says an evaluation in June about three months after Digital Boost kicked off showed promising results.

A survey of 582 users, found 20 per cent who did not previously have a website now had one, and there was a similar rise in those now doing e-commerce, and using cloud services or software.

A higher proportion were Aucklanders (38 per cent), which was attributed to the city’s prolonged lockdowns.

Appleby Gaming owner Steve Ayers’ T-shirt sports his new company logo. It resulted from a competition he ran on a freelance website offering a $100 prize for the best design.

Joseph Johnson/Stuff

Appleby Gaming owner Steve Ayers’ T-shirt sports his new company logo. It resulted from a competition he ran on a freelance website offering a $100 prize for the best design.

Women made up 63 per cent of users, significantly higher than the national level of female business ownership (35 per cent).

Luey​ puts the gender skew down to the fact that more women were employed in hard hit sectors like hospitality, and they decided to turn side hustles into a small business.

“To be blunt, some research shows older Pākehā men find the concept of learning new skills, especially digital ones, a bit challenging … they’ll often say, it’s a young person’s thing, I’m too old to learn.”

Ayers is definitely not in that camp. The former primary school teacher who quit the profession about five years ago after a mental breakdown says the flexibility of online learning fitted his night-owl tendencies, and he appreciated the downloadable written summaries.

“I took away the things that were relevant for me, started putting them into force, and voila, the business took off.”

Before Digital Boost Ayers admits he had floundered, sometimes paying good money for bad advice or the wrong products.

With his increased income and new-found confidence, he has invested in an inventory management system to keep tabs on stock, and a digital marketing strategy to direct traffic to his website rather than to his Trade Me account, where as a top seller he “gets stung” with a 10 per cent success fee on sales.

The Mind Lab founder Frances Valintine says the pandemic has shaken established businesses that know they need to improve their digital skills in order to compete.

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The Mind Lab founder Frances Valintine says the pandemic has shaken established businesses that know they need to improve their digital skills in order to compete.

The Mind Lab sets up and runs the Digital Boost online platform and a phone in help desk to handle queries, which chief executive Frances Valintine​ says range from “I’ve been locked out of my Facebook account,” to “how do I make my images smaller, so they load faster.”

The coffee and chat sessions on Zoom start with a one-minute boogie, and participants can put questions to members of the Mind Lab staff.

Valintine​ says fashion designer Liz Mitchell recently dropped in for a brainstorm on how to get accurate measurements from international clients unable visit her in person for fittings.

A te reo version of Digital Boost, which went live during Māori language week, is proving popular and videos also have captions in te reo, Hindi, Samoan, Tongan and Chinese.

Cloud accounting software is increasingly accepted, but many SMEs have been slow to adopt other cloud-based systems that offer efficiencies for project management, logistics and payroll.

Luey says failure to digitise administration can reduce the value of a business when it comes time to sell, and that is a real risk for the likes of tradies relying on a spouse or partner to handle back office admin.

Sure a mailing list is an asset, but what about digital systems to keep in touch with customers, analyse how often they visit your website or premises, and to create and send invoices, says Luey.

Living Room owner and Digital Boost participant Kate Abbott says it was hard for small businesses to step back and think about changes they needed to make after the lockdown lifted.

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Living Room owner and Digital Boost participant Kate Abbott says it was hard for small businesses to step back and think about changes they needed to make after the lockdown lifted.

Digital Boost Spotlight videos feature businesses that have already successfully made the digital shift, and others doing so with guidance from mentors.

Wellington custom upholstery workshop Living Room is reaping the benefits of cloud software to manage workflow after Digital Boost introduced owner Kate Abbott​ to Guido Loeffler​ and Nick Lee​ from Christchurch company Innate Furniture who helped her pin down the right software programme to replace a document-based system.

“You can’t improve all aspects of your business at once, but you can pause and focus on one area, it’s seizing the opportunity and thinking, we can make a difference here, and running with it.”

Abbott says it is now easier to track progress on jobs, and the system can be accessed off-site.

“It’s not reliant on me being here, and if someone is ill, which is a big thing with Covid, we can get the information from anywhere.”

Tu Tika Tours in Whangarei is a family tourism business offering small group Māori cultural experiences hosted by Rangimarie and Merv Harding and their five children.

They were paired up with Pita Pirihi of Patu media to learn how attract more customers by sharing their story online.

Pre-pandemic their market was largely visitors from Europe, and Rangimarie Harding says Kiwis were just not interested.

But they persevered, running team building sessions for companies, working with local school groups, and offering virtual tours for overseas customers.

Discussions with Pirihi prompted Harding to increase Tu Tika’s social media posts, and a Tik Tok page for Merv, who is literally the face of the business, is in the offing.

Harding says Digital Boost has opened their eyes to the wealth of information out there for businesses lacking the resources to pay for advice, and she plans to try the on-line courses.

However, she says meeting Pirihi face to face made a huge difference, allowing them to speak freely and create a connection that would not have been possible via Zoom.

“That’s pretty much what our experiences are all about, whakawhanaungatanga, building relationships through shared experiences.”

Woolcraft owner Anne Grassham sells specialist fleeces for spinning and weaving using wool from the Fleecewood Leicester sheep bred on her Nelson farm.

Her Digital Boost mentor is Christchurch businesswoman Maureen Taane (Ngāti Manaipoto, Ngāti Uekaha), Hapa store owner and merchandise manager for Tikidub Productions.

They worked together to build a new e-commerce Woolcraft store on Shopify, which proved challenging, despite two face-to-face sessions and numerous chats by phone.

Rangimarie and Merv Harding of Tu Tika Tours in Whangarei have taken part in MBIE's Digital Boost programme, and a Tik Tok page for Merv is planned as they up their social media posts.

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Rangimarie and Merv Harding of Tu Tika Tours in Whangarei have taken part in MBIE’s Digital Boost programme, and a Tik Tok page for Merv is planned as they up their social media posts.

Grassham says without Taane’s help she would have given up, and while preferring one-on-one assistance, she says online courses are good if they are pitched at the right level, and she will take advantage of them more when farm work allows.

MBIE has taken over responsibility for the regional business partner network that supported small businesses through about 400 advisers and 2000 mentors, and earlier this year it signalled more of that support would occur online.

Despite the call for “in person” help from respondents to the Digital Boost survey, Luey does not believe that face-to-face necessarily means being in physically in the same room.

An expert in Auckland can present to individuals spread all over the country using Teams or Zoom, avoiding the expense of travel and accommodation. “We can help a lot more people at a lot less cost”.

The next step will be the launching of Navigator, an online tool applying artificial intelligence (AI) to information gleaned from Digital Boost users to produce free reports advising them on what they need to do to get the best returns.

“Hopefully you could put in the URL for your website, we could run an AI diagnostic over it and tell you whether it’s landing with the audience you are after, whether it’s accessible to different communities like the disabled, and what you need to do to fix it.”

Luey​ says that while there are lots of online auditing tools out there already, “no one has built a platform to pull them altogether into one that can produce a bespoke diagnostic action plan for you.”

Based on the response to a request for proposal earlier this month, he is confident it is doable and Navigator should be operational by March.

“We have some very large and capable suppliers of digital services in New Zealand and internationally telling us this is indeed possible.”

Hooking businesses up with coaches or mentors to help them implement the Navigator recommendations may be part of the mix as the programme develops further.

Anne Grassham's Nelson Woolcraft business relies heavily on online sales, and she is grateful for assistance form Digital Boost to improve her website.

Supplied

Anne Grassham’s Nelson Woolcraft business relies heavily on online sales, and she is grateful for assistance form Digital Boost to improve her website.

Gorilla Technology​ advises SMEs and not-for-profits on tech issues and chief executive Paul Spain has presented a Digital Boost session on cybersecurity.

He says the Navigator concept has merit, and he hopes it works, but he cautions that actually implementing a digital strategy takes time and money, things SMEs are often short of.

“They would really have to come up with something that is spectacular, and if they can do that, they should be selling it to the world as well as giving it away free to Kiwis.”

Canterbury Tech general manager Neil Hamilton says AI needs a significant dataset to be useful, “and until you have built that dataset, I would question how valuable the insights [Navigator] might provide would be.”

He says intellectual property (IP) rights are usually held by the customer commissioning the product, but that can depend on how much it is based on existing software.

“If I was MBIE I’d be pushing to own the IP as much as possible.”

Luey says MBIE is in the middle of the procurement process for the Digital Boost Navigator and IP ownership will depend upon the nature of the proposals it receives.



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