How Small Businesses Can Reach the Connected Consumer

Visa, the National Restaurant Association and group of key industry organizations released Digital Transformation of SMBs: The Future of Commerce, a report that looks at the opportunities and challenges small and medium size business (SMBs) owners face in an increasingly digital world.

The report provides a snapshot of how SMBs can capture revenue opportunities and move to more technology-focused processes. Developed with SMB advocates, the report also offers actionable tips for technology and digital upgrades that business owners can easily implement to grow their businesses.

Digital Payments 
One immediate opportunity for SMBs to go digital is by digitizing checkout and other business processes.

• Based on survey responses of 2,500 consumers, Visa estimates that the SMBs’ average cost of processing digital payments, inclusive of direct expenses and labor costs, is 57% less than that of non-digital payments.
• Further, 65% of the 425 SMBs surveyed agree customers spend more when they use cards versus cash.
• 78% 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%) wish they could shop exclusively online. This has big implications for SMBs, given only 46% of SMBs surveyed have an online presence through a business website or online marketplace.
• Today, 38% of consumers’ retail purchases are made online, but that number is expected to grow as 61% 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% of SMBs’ sales are conducted through digital channels.

An Opportunity to Create 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% of consumers are more likely to choose a business that offers a loyalty program over one that does not and 65% of consumers surveyed said they examine loyalty programs prior to shopping at a store, visiting a restaurant, or trying out a service.
• 90% of consumers prefer a digitally based loyalty program compared to a paper-based stamp or punch card.
• Nearly 80% of businesses say loyalty programs have a positive impact on average ticket size, repeat customers and revenue.

The Digital Transformation of SMBs report is an independent study commissioned by Visa in collaboration with a consortium of trade associations including: America’s Small Business Development Center, National Federation of Independent Businesses, National Restaurant Association, U.S. Hispanic Chamber of Commerce, ESI ThoughtLab, Authorize.net, Bank of America Merchant Services, BB&T, Capital One, Clearent, Elavon, iPayment, Maru/Matchbox, Pivotal Payments, Priority Payment, Square, TSYS, U.S. Bank, Wells Fargo and WorldPay.

To download the Digital Transformation of SMBs: The Future of Commerce report, visit www.visa.com/smbDigital.