How Online Shopping Helps Businesses

digitalization: "An online shop is better than none"

It worked out perfectly, "says Jarko Ribarski," we won an incredible number of customers online. "It was clear to the owner of the Marianne boutique in Baden from the start that it was not enough to simply open a shop." My wife and I knew that we also have to do something digital, which 50plus also likes, "says Ribarski.

He is one of many self-employed people in retail who were hit particularly hard by the Corona crisis. And which, with the help of government subsidies, are to become more crisis-proof and future-proof when it comes to digitization.

Many different funding pots

In May of last year, for example, the Ministry of Economic Affairs announced that it would make a further eight million euros available to promote digitization in small and medium-sized enterprises (SMEs) - in addition to the various existing federal and state funding programs.

Here a pot, there a pot - the funding jungle in Austria is decentralized and difficult to see through for many - and the budgets are used up quickly. Economics Minister Margarete Schramböck said in May that there could not be a common body for all relevant funding. Too many areas are affected. The ministry cannot answer the question of how much money was made available for Austrian companies in 2020 and how much of it was paid out for digitization projects.

In September 2020, the investment premium was increased (from 7 to 14 percent) for companies that, among other things, make investments in connection with digitization. The total volume is currently three billion euros. More than 80,000 applications have already been received, more than 20 percent of them for digitization, according to information from the Ministry of Economic Affairs.

Also in September, the KMU.E-Commerce funding started in the amount of two million euros to support the establishment and expansion of online shops. The budget was exhausted within a few days due to high demand, according to the ministry. In the first quarter of 2021, the campaign is to be launched again with ten million euros.

The KMU.Digital program, which has existed since 2017, was also relaunched in September 2020. A total of five million euros were available for this year. The budget was also exhausted in a very short time. A total of five million euros a year are planned for KMU.Digital until 2023. Particular attention will be paid to motivating companies that are not yet digitally savvy to get started with digitization and to show them the next steps. The toolboxes for SMEs can be divided into the optimization of business models, into e-commerce and online marketing as well as into IT and cyber security, according to the Chamber of Commerce.

The Research Promotion Agency (FFG) followed in October with a program for the faster implementation of digitization solutions amounting to 4.3 million euros. This call for tenders was also aimed in particular at SMEs. The "Creative Impact Covid-19 special campaign" with a focus on new business models in the areas of digitization and social impact has a volume of three million euros. The second call is about to make the final decision.

Who receives funding and how much, and who looks through the fingers? The jungle sometimes leads to upset. A web shop operator who received funding and was able to successfully implement a project did not want to appear in the newspaper with his experience. The fear of envious people is now too great, according to his reasoning.

"Money for pre-financing
we don't have it at the moment "

Jarko Ribarski has found his way around the grants - and is happy to talk about them. Last spring, he applied to "Digi4KMU" from the state of Lower Austria for funding in order to better position his boutique digitally.

In the first step, an app was developed with the help of a consultant from the Chamber of Commerce and a virtual tour of the boutique was made possible on the website. In addition to the classic online shop, Ribarski wants to make virtual shopping an even better experience. In the 3D tour of the shop, a saleswoman appears and advises, in future it should also be possible to click on the clothes and even try them on virtually - if the customers scan themselves in beforehand. The further expansion stages of the digitization project are still pending. Because since the "lockdown light" last November, there have been almost no customers in the business to date for a good three months. "We just don't have the money for the pre-financing at the moment," says Ribarski.

Digitization plays a "very important role" for SMEs

From a macroeconomic perspective, according to an Ernst & Young survey from June 2020, digital technologies already play a large to very large role for their own business model in 77 percent of medium-sized companies, which is 21 percent more than two years ago - and 9 percent more than for example German companies. Only 3 percent (2018 it was 20 percent) are excluding digitization from their corporate concept and ascribing no importance to it.

An Imas study from October 2020 also shows that the image of digitization has changed in the population during the corona crisis. Three out of four Austrians are at least somewhat of the opinion that the Corona crisis has shown that online offers are important in professional life and in school. Two thirds believe that digitization helped "survive" the crisis in spring.

In comparison to 2018, the trend was that the statements: "The digital change is making our lives easier" and "The digital change will create many new jobs" were much more strongly supported. It seems as if the crisis has once again intensified the transformative effects of digitization on companies and on the general public.

The online offer does not replace brick-and-mortar retail

The digitization project has already done a lot for the image and awareness of the Marianne boutique, says Jarko Ribarski. The owner recorded many addresses, calls and visits from all over the world. "Through social media targeting, we will in future also find customers who want to buy our products," says Ribarski confidently.

When asked whether it has actually paid off financially, Ribarski says: "An online shop is better than none" and laughs - the stationary trade cannot replace the income, however. "Our offer has been online for two months, so you would have to draw a conclusion after six months," says the self-employed person.