Small businesses, particularly in the last year, have tended to draw a lot of superlatives and flowery descriptions like “the backbone of the economy,” or “innovation engines” and even, by those feeling particularly poetic, as the “heart and soul of our communities.”
There is no reason to quarrel with that list of superlatives, except perhaps to note that it is incomplete. Over the last year, small- to medium-sized businesses (SMBs) in the U.S. and around the world have proven that among the qualities ascribed to SMBs, adaptive and resilient should be permanently enshrined on the list.
As PYMNTS global data demonstrates, the SMB players that have found ways to survive and thrive during the pandemic have done so not merely by turning to digital, but also by being strategic. While large stores can afford to take an everything-but-the-kitchen-sink approach to designing their operations, SMBs that have successfully merged into digital commerce have had to be more calculated.
Seventy percent of large merchants, for example, are sporting 19 advanced digital features, while no more than three features are offered by 70 percent of SMBs. But SMBs are dialed into the specific features that make the shopping experience more convenient for consumers, with areas like dispute resolution, refunds of fraudulent purchases, product details and returns topping the list of “make it easy for me” features. The SMB space is rapidly realigning itself for the needs of the new market, Cybersource Vice President of SMB Solutions Tom Haymore told Karen Webster.
“I think that the changes in the last year with the pandemic definitely pushed a lot of small businesses to really dig into how customers have these hybrid experiences where they might start online and finish in store or vice versa,” Haymore said. “I think the future is that hybrid experience for the local businesses in the community — building that experience so it can merge the online and offline worlds. That’s how they compete against these big online sellers. But also, that’s what’s unique about them. They’re local, they’re physical, and I think that’s not going to go away as an advantage, but it does have to evolve.”
And that evolution is going to be a collaborative effort for SMB players who are not themselves technologists by trade, Haymore said. The digital dive is complicated work because the goal for small and local players isn’t simply to recreate themselves as online retailers, but to transition themselves into an omnicommerce hybrid proposition. The right technology partner can make that transition frictionless and seamless. And there are a lot of technology partners out there — no matter where SMBs ply their trade, there is almost certainly a technologist with a product built to serve the needs of their exact niche. The challenge is finding that partner.
Also key is realizing that the technology itself is only a tool that can support a merchant’s vision, not something that can step in and replace the vision itself. Haymore said a lot of success for SMBs comes down to knowing their customers as individuals. Some are going to want that in-store experience after a year of being cooped up. What technology can do is offer a bigger toolbox to make it possible to serve a broader base of customers by tapping into online and digital tools.
Tools, he noted, that will make it possible to do things differently than merchants ever have — and hopefully more effectively and in line with their customers’ wants and needs. Loyalty offerings provide a perfect example of the emerging potential in merging digital tools and small merchant consumer knowledge to create an offering better than the point and punch card-dominated offerings of the past.
“Loyalty has been very difficult for small businesses to enact if it’s more complicated than, say, a punch card with points — kind of the old way of doing things,” Haymore said. “That is where a technology partner can really help a firm build something better, but it also comes back to plugging into consumer behaviors that already exist and making that experience really genuine and sincere.”
In local retail, sincerity matters to the customer. Data indicates consumers tend to gravitate toward shopping local because they like the sincerity in the connection that small shops offer as opposed to their larger big-box counterparts. Haymore said it is why the data show some inconsistency of desires and expectations when it comes to the services set. Free shipping is something a consumer simply expects across the board from big-box stores, but when it comes to their local hardware store, they are willing to be more flexible. The hybrid SMB shopper isn’t necessarily looking for free shipping from the omnicommerce experience, particularly if it is a local retailer and their intention is to pick it up free curbside in an hour.
The power and challenge SMBs are dealing with today, he said, is figuring out which pieces of the omnichannel experience they need to incorporate into their new customer journey — and finding the right technology partner to help them build that out.
“The great thing about today in small business is that there are so many technology platforms that do give sort of that instant access to digital channels to small businesses,” Haymore said. “That’s usually one of the big things we see when we work with small businesses, working with a technology platform that can give you access, whether it’s through a marketplace, whether it is through tracking the customer in omnichannel context or making sure that your customer has a good experience when they come into the store. For SMBs, that comes down to partnering with a technology platform that can give a small business that experience for its customers.”
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