In 2017, Benny’s department store closed its doors. I was saddened to see this somewhat iconic Southern New England family-owned and run, 31 store chain, go out of business after 93 years of operations. Benny’s store and on-line experience was so out-of-date that it was actually charming. But charming doesn’t pay the bills.
Arnold Bromberg, the company’s president, stated that “Our current ownership is all at the age where we would like to retire from the business and spend more time with our families, and we have collectively judged that the always competitive retail landscape has shifted in a way that makes it almost impossible for small, family-owned chains like ours to reasonably compete moving forward.”
The bottom line is that time and technology passed Benny’s by.
I recently wrote a few pieces on our Capterra site “Why Tech Is Our Best Bet to Spur U.S. Small Business Growth” and “Top 5 Tech Trends for Small Business.” I want to add to some of those thoughts here.
It is important to look at this topic of tech’s impact on small business from both the positive and negative angles. Yes, technology provides great opportunities for small businesses. And our recent research on tech trends for small business indicates that small businesses in the US are making progress with new technologies. But technology advancements are not either positive or neutral for small business. It is either an opportunity or a threat. Simply put,
Small business that take advantage of tech advancements to improve their customer and employee experience will survive and even thrive. Those that don’t will shut down.
As I show in the above pieces, the small business sector has struggled with growth for decades. It is just a matter of time before this polarization between the tech-savvy and tech-averse hits every industry. And with tech advancing so rapidly, the window of opportunity for small businesses to keep up is closing more and more quickly. Small businesses that can sense and respond to relevant changes in technology will remain competitive or even gain the advantage.
The threat doesn’t come from other small businesses. It comes primarily from large businesses that use technology to deliver services that feel as, or close to as, convenient and helpful as small local businesses. And it comes from new tech heavy businesses that capitalize on independent contractors in the “gig economy” to provide local services at large, even enormous scale. Over the past 5 years, we’ve seen these combinations transform or significantly impact many industries including taxi, hotel, real estate, retail, car rental and more. In all probability, this trend will not abate or reverse.
I really don’t like to play Chicken Little, but I feel that many small business leaders need a big wake-up call. Many are tech averse. And the more they fall behind the harder it is to catch up. As I point out in the Capterra articles, our recent research indicates that keeping up with technology is a top concern for only 35% of the 699 small and mid-sized businesses we surveyed. That number should be closer to 90%. Keeping up with technology should be in just about every small business leader’s DNA.
Bottom Line: Technology is generally not a major factor in strategic planning for non-tech industry small businesses. I predict that greater than 70% of small businesses that succeed over the next 5-7 years will cite technology as an indispensable factor in their growth.
What are your experiences? Do you see small businesses getting more strategic with information technology? Do you think it is a necessity? What will happen if they don’t?
As always, I’m interested in what you think.