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Small businesses 'had to become digital' amid COVID-19: Facebook VP

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Facebook Global Business Group VP Carolyn Everson joins 'Influencers with Andy Serwer' to discuss COVID-19 and it's impact on the small business economy.

Video Transcript

ANDY SERWER: Hello, everyone, and welcome to "Influencers." I'm Andy Serwer. And welcome to our guest Carolyn Everson, VP of the Global Business Group at Facebook who oversees the company's advertising worldwide. Carolyn, nice to see you.

CAROLYN EVERSON: Great to see you too, Andy. Thank you for having me.

ANDY SERWER: I want to ask you, first of all, about Facebook and the business and COVID and what's been going on. Many small businesses use Facebook as a key advertising platform. Has Facebook seen the use of the platform change during COVID? And has it adapted tools to help them during this difficult time?

CAROLYN EVERSON: Well, Andy, it's a great question because one of the biggest areas of impact over the last year has definitely been on small businesses. As a matter of fact, we recently launched a state of the small business report which surveyed more than 35,000 small businesses across 27 countries and territories in February. And what they told us was pretty sobering.

Nearly a quarter of them reported that their businesses were closed up. And that was up from 16% in October not too off the peak of 29% last May. The sharpest increases were in Europe because of the recent lockdown measures. However, there is no question that the environment for small businesses has been incredibly challenging.

And yet, there is a lot of positivity and optimism as well. Believe it or not, there were more new business applications filed in the US in 2020 than had been for years. And so what we're seeing is although certain businesses are definitely struggling, there is an energy and entrepreneurship around really fulfilling different consumer needs.

What we did at Facebook early on in the pandemic last year in 2020 is we set out to say one of the most important things our platform can do is help to rejuvenate and provide tools to small businesses. We have 200 million businesses that use our tools for free. Out of that 200 million, only 10 million actually pay us for advertising. So 190 million use our tools for free.

So we set and looked at, what are the things that small businesses need? They need to be able to become digital I'm sure there are examples, Andy, 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. And 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, tools, for example, that will enable consumers to find more local businesses. So let's say there is a post about Italian food. People will be able to go into that and have links in that say, OK, here are other types of restaurants in your local neighborhood so consumers can discover more small businesses.

We also have seen a huge increase in business messaging. Back in the day, the way you would call a business, or you would pick up the phone, and you would call a business. Or you would email a business. That has dramatically shifted to messaging environments. Consumers want to be able to message businesses on Messenger, on WhatsApp, on Instagram Direct. And that can be really complex for a small business to manage all of those interfaces.

So we've really revamped and enhanced our Facebook Business Suite so to save small business owners time but allow them to communicate directly with their consumers. And this will be an ongoing effort. 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.

ANDY SERWER: Yeah, I want to follow up on that last point you made, Carolyn, because you have these new tools, but they speak to the lockdown perhaps and the time during COVID. Won't these customers simply abandon the tools going forward once the economy reopens? Or how are you going to have them integrate these new tools with the new reopened economy?

CAROLYN EVERSON: Yeah, so, you know, what-- in the retail space, we call it omnichannel or-- and that-- and we work on strategies that think about what it's like to be in a digital environment to be buying things, what it's like if you do go in store, how those two connect, right? The consumer, when they go to shop at Target or Walmart, whether they go in the store, or they're buying online, they expect Target and Walmart to understand who they are as consumers.

So there's no questions sort of an omnichannel experience is going to be an increasingly important. However, there's some really interesting stats about the acceleration of e-commerce and even as things open up. A decade ago, e-commerce accounted for 5.1% of sales. In 2019, that went up to 19%.

By the first few months of 2020, it was in the-- it was in the early 20 percents. And now it is continuing to increase. So what we have seen is anywhere from 3, 5, or 10 years, depending on what country and what analyst's report you use. That acceleration of e-commerce has been condensed in a handful of months.

So then we look at, well, what are the behaviors in the countries where people are back to whatever a new normal is, meaning they're not on lockdown, stores are open, people are able to go out physically? We are not seeing the e-commerce trend go backwards. I think consumers really got a chance to see how efficient, how time-- how much time they can save, the quality of products and services that can be delivered to them.

And if anything, consumer expectations are going to be much higher coming out of this pandemic. So the trends we see in Asia, particularly in the countries where things are more back to a whatever new normal is, those trends are sticking with consumers really pushing forward on utilizing e-commerce.