Visa’s ‘Digital Transformations of Small and Medium Size Businesses: The Future of Commerce’ report has provided a timely look at the opportunities and challenges that Canadian SME owners face in an increasingly digital world, and explores ways they can capture revenue opportunities and move to more technology-focused processes.
Developed with leading SMB advocates, the report also offers actionable tips for technology and digital upgrades that business owners can easily implement to grow their businesses. “As consumer expectations are evolving, it is critical that small and medium size businesses evolve with them,” said Brian Weiner, vice president, head of product, Visa Canada. “At Visa, our goal is to help businesses understand and navigate the complexities of today’s consumer, and adopt digital processes to stay competitive.”
Digital Opportunity for SMBs
According to the report, consumer purchasing behaviour is driven in part by websites and online experiences:
- Consumer behaviour is changing
90% of consumers say they are motivated to shop at a business if they have an easy to use website. 87% of consumers also think it is important to support local businesses, providing a great opportunity for SMBs to further engage with consumers.
- An online presence is a must
Half of consumers often search online (46%) and/or check the business website (47%) before visiting a new business.
- eCommerce is a differentiator
Only 32% of SMBs sell their products and services online, with only 12% of their sales coming from ecommerce, demonstrating huge opportunity for Canadian businesses.
Digital Payments Improve Profitability
One immediate way for SMBs to seize a revenue opportunity may be by digitizing the checkout process:
- Consumers prefer card
85% of consumers surveyed rank a digital payment method, such as paying with a card or wire transfer, as their number one preferred payment option. But only 52% of SMBs prefer to accept digital payments, despite the potential financial benefits.
- Digitization impacts the bottom line
40% of SMBs saw an increase in sales after they started to accept digital payments – by an average of 7.1%1. Further, 61% of SMBs agree customers spend more when they use cards versus cash.
- SMBs recognize the benefits of going digital
73% of SMBs agreed that utilizing digital payments helped them manage their business more effectively.
Offers & Loyalty are a must
Businesses are aware that rewards drive consumer preference and digital programs can offer instant value and gratification:
- Consumers enjoy digital rewards
78% of consumers are more likely to choose a business that offers a loyalty program, and 89% of consumers prefer a digital loyalty program compared to a paper-based stamp or punch card.
- Loyalty programs add profitability
81% of owners say their business is highly dependent on customer loyalty, and close to two-thirds feel that loyalty programs can have a positive impact on average ticket size, repeat customers and revenue.
“While more than 80% of consumers surveyed say digital benei ts motivate them to shop at a business, businesses are still underutilizing these preferred digital channels,” continued Weiner. “With this report, Visa is sharing actionable ways SMBs can bridge the gap between consumer expectations and their current offerings, resulting in untapped profit and growth in this digital revolution.”