The coronavirus pandemic upended retail, crushing brick-and-mortar stores and spiking digital sales — not only benefitting e-commerce giants like Amazon (AMZN) but also some small businesses that built an online footprint.
E-commerce comprised roughly $1 out of every $5 spent on retail in 2020, up from about $1 out of every $7 spent in 2019, according to a report released by Mastercard (MA) earlier this month. Moreover, between 20% and 30% of that increase will remain permanent, the report said.
In a new interview, Carolyn Everson — vice president of Facebook's (FB) Global Business Group — said the platform's digital tools helped hundreds of millions of small businesses across all sectors as COVID-19 accelerated the shift of business operations online. The company is in the process of rolling out additional tools to improve their experience on the platform, she added.
"There is no question that the environment for small businesses has been incredibly challenging," Everson says. "And yet, there is a lot of positivity and optimism as well."
"So what we're seeing is, although certain businesses are definitely struggling, there is an energy and entrepreneurship around really fulfilling different consumer needs," she adds.
Fifty-five percent of small businesses say they are using digital tools to communicate with customers, according to a report recently released by Facebook, Everson said.
Two-hundred million small businesses use Facebook's free tools, said Everson, who noted that 10 million of those companies pay Facebook for advertising, while the remainder take advantage of the tools without paying money to the company.
Small businesses use the platform to create a Facebook Page that informs users about the company and updates them on new products, as well as an Instagram Business Account that allows some companies to sell goods directly through the app.
To be sure, Facebook derives significant revenue from the presence of small businesses on the platform. They account for nearly 75% of the company's annual ad revenue, according to research from Deutsche Bank cited by Marketplace last year.
'That local business never had a website'
Earlier this month, the company announced changes that it says will help users find small businesses, including a News Feed feature — currently testing with some users in North America — that would allow users to click on topics they’re interested in under posts and ads, and find businesses related to those topics.
"In your local neighborhood where before the pandemic, that local business never had a website, certainly not a mobile app, you probably were not able to buy anything from them digitally," she says. "Suddenly, they had to become digital."
"So we accelerated our commerce efforts, really built out Facebook shops, Instagram Checkout and just recently, we announced a more tools for small businesses," she adds. "Tools, for example, that'll enable consumers to find more local businesses."
"One of the most important things our platform can do is help to rejuvenate and provide tools to small businesses," Everson says.
Everson spoke to Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
She joined Facebook a decade ago, leading the company's advertising division and cultivating relationships with top advertisers. Over her tenure, the company's annual advertising revenue has exploded from $3.1 billion in 2011 to $84.1 billion last year.
Speaking to Yahoo Finance, Everson said the Facebook will continue to offer additional online tools as companies try to make up for the losses they have suffered amid the pandemic.
"This will be an ongoing effort," she says. "You will continue to see us roll out new products and services, really with the goal of helping businesses not only replace the revenue that they have lost, but hopefully be able to add new revenue streams and find new consumers globally."
Referring to the e-commerce boom, Everson said customers have developed a new set of expectations around the ease with which they can shop online.
"Consumers really got a chance to see how efficient, how much time they can save, the quality of products and services that can be delivered to them," she says. "If anything, consumer expectations are going to be much higher coming out of this pandemic."