Small Business in the Digital Era: New Report Helps Businesses Reach the Connected Consumer
- Created in collaboration with America’s
Small Business Development Center, National Federation of Independent Businesses, National Restaurant Association, U.S. Hispanic Chamber of Commerceand 16 digital leaders
- New report shares key insights- SMBs estimate cash transactions cost businesses 57 percent more than digital transactions- and actionable tips on how business owners can quickly digitize and avoid common pitfalls
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Digital Transformation of SMBs: The Future of Commerce (Graphic: Business Wire)
“For small and medium size business owners, the perceived cost, time and tech-proficiency required for building a digital presence can feel like an insurmountable obstacle. But it doesn’t have to be,” said
Digital Payments Improves Profitability
One immediate opportunity for SMBs to go digital is by digitizing checkout and other business processes.
- Based on survey responses, Visa estimates that the SMBs’ average cost of processing digital payments, inclusive of direct expenses and labor costs, is 57 percent less than that of non-digital payments.
- Further, 65 percent of SMBs agree customers spend more when they use cards versus cash.
- 78 percent of consumers surveyed rank a digital payment method, such as paying with a card or mobile device, as their number one preferred payment option.
Digital Presence for SMBs
According to the report, consumer purchasing behavior is driven in part by websites and online experiences.
- More than half of consumers (51 percent) wish they could shop exclusively online. This has big implications for SMBs, given only 46 percent of SMBs surveyed have an online presence, such as through a business website or online marketplace.
- Today, 38 percent of consumers’ retail purchases are made online, but that number is expected to grow, as 61 percent of consumers plan to increase their online purchases in the next 5 years.
- As online purchases continue to increase, it could exacerbate a widening gap, given only 15 percent of SMBs’ sales are conducted through digital channels.
Offers & Loyalty
Only one in five SMBs surveyed offer a loyalty program, yet rewards drive consumer preference and digital programs can offer instant value and gratification.
- 78 percent of consumers are more likely to choose a business that offers a loyalty program over one that does not and 65 percent of consumers surveyed said they examine loyalty programs prior to shopping at a store, visiting a restaurant, or trying out a service.
- 90 percent of consumers prefer a digitally based loyalty program compared to a paper-based stamp or punch card.
- Nearly 80 percent of businesses say loyalty programs have a positive impact on average ticket size, repeat customers and revenue.
“More than 80 percent of consumers surveyed say digital related benefits are motivating factors to shop at a business, yet our research shows SMBs are currently under utilizing these preferred digital channels,” continued Forestell. “This new report offers actionable ways for SMBs to bridge the gap between consumer expectations and current offerings, resulting in untapped profit and growth in this digital revolution.”
About the Digital Transformation of SMBs
The Digital Transformation of SMBs report is an independent study commissioned by Visa in collaboration with a consortium of trade associations, technology providers, banks and researchers to help bridge the gap between consumer expectations and current SMB offerings.
Consortium includes: America’s
To download the Digital Transformation of SMBs: The Future of Commerce report and learn how to begin growing your business, visit www.visa.com/smbDigital.
Maru/Matchbox, a global consumer intelligence firm, surveyed 425 businesses that represent business payment decision makers and nearly 2,500 consumers in 2018 to form the Maru/Matchbox 2018 Small Business and Consumer Surveys. ESI ThoughtLab, a leading economics consultancy firm, collaborated with Visa to develop equations that enable the cost analysis to realize the impact of digital versus non-digital payments.