We’re always picking through and sharing new research that furthers our understanding of the state of the consumer and small business markets. Our own recent Modern Commerce Monitor™ Wave V-III data from Localogy has been shared in this Localogy Insider post by Charles Laughlin. MCM focuses squarely on the state of the small business.
Visa recently released data from its Back to Business study. The data is drawn from some 2,000 small businesses from eight countries. Visa collected 250 SMB completes each from the United States, Germany, Canada, Ireland, Hong Kong, Singapore, Brazil, and UAE. The study also pulled data from 4,500 consumers from the same countries (1,000 from the U.S. and 500 from the other seven countries).
Consumers Say Safety Trumps Price
In this post, we’ll focus on the consumer data coming out of the Visa survey. One of the key findings from the survey is the percentage of consumers who are driving contactless payments. According to the study, on a global basis, 63% of consumers would change to a different business if offered contactless payments. Given the state of the world and the pandemic, this is hardly surprising. For many small businesses, this has been a major wakeup call.
Too often we would hear from small businesses either in interviews or via data that they were comfortable with taking checks and cash. This point of view puts a small business at risk today. Some 48% of consumers indicated they would not shop at a store that only offers payment methods requiring contact with a cashier or employee. For example via a check or even a shared machine like a card reader.
Shoppers are signaling that safety trumps pricing during this pandemic period. Nearly four in five (78%) consumers say they have made changes to the way they pay for items, including shopping online whenever possible (49%), using contactless payment (48%), and not using cash as much (46%). And speaking of cash – 12% have stopped using cash completely. Let’s consult the focus group of one — myself. I do not remember the last time I used cash. I might have given the valet attendant at a hotel in mid-February a cash gratuity. Since then, nada. What about you?
Consumers are also trying to support their local communities. According to the data, the top reason American consumers are shopping locally is to support their local economy (51%). Other reasons include stores being more convenient (48%) and prices being better (27%) and better customer service (24%). Imagine if all local businesses raised their customer experience in response to this signal. That would really help the overall small business economy.
Big Opportunity for MSPs
Another interesting finding from the small business survey involves data privacy and security. As they consider the shift to digital, 28% of small businesses cite data privacy and security as their top concern. This suggests that they’re sensitive to what their customers might be worried about as they go digital. This presents a bountiful opportunity for managed service providers — those small independent IT shops that fix routers and install wide area networks (WANs) and firewalls.
We’ve wondered for a long time when small businesses will get a unified solution that combines two areas of need. The nitty, gritty details of tech support, plus digital and social media marketing. Perhaps the pandemic will finally bring these two solution sets together?
As one scans consumer data from the study, the great opportunity small businesses have is to make sure they’re using the most advanced payment solutions available. This means roofers, dentists, auto repair shops, and others must shift from outdated payment platforms to contactless solutions. Once they do that, we sincerely doubt consumers will trend back to old school approaches. We doubt even small businesses will go backward, even though the chance to dodge a few state or federal tax dollars will remain as appealing as always.