Read articles about finances, saving and community news.
Access all the commercial banking resources your business needs to succeed.
by Rhett Buttle
September 10, 2020
by Rhett Buttle
September 10, 2020
There’s a reason why they call it “Main Street.” Small businesses have traditionally depended on foot traffic and a brick-and-mortar presence. But in the Internet age—and especially in the age of COVID-19—businesses that leverage digital tools have a distinct competitive advantage. Unfortunately, only 46% of American small businesses have an online presence. We need to change that if we’re going to enable an inclusive economic recovery for our nation.
COVID-19 has unearthed a myriad of challenges for small businesses, from lack of capital access to strains on caregiving. But this pandemic has also shown how going digital isn’t just a “nice to have” for small business owners; it must be a core part of your business strategy. The fact is, as lockdowns extend or restart in communities across the country, small businesses that prioritize digital resilience will be better positioned to survive and thrive.
Fortunately, savvy small business owners are adapting to our new virtual reality. PayPal reported 1.7 million new merchant accounts in the second quarter of 2020, triple the amount it usually adds per quarter. A recent report from Facebook and Small Business Roundtable found that 79% of businesses have made changes to their operations to accommodate their customers during the pandemic—with 35% expanding the use of digital payments. Fifty-six percent of those that use online tools say that their business makes at least half of its sales digitally. As the struggle with COVID-19 continues, businesses that maximize online tools will fare better than those relying on traditional avenues for reaching customers.
The case for taking your small business digital is clear. For one, an online presence helps you reach more customers. A recent report from eBay found that 96% of eBay-enabled small businesses are exporting to international customers, compared to only 1% of U.S. small businesses in general. On average, these eBay-enabled small businesses reach 17 different export markets, compared to an average of four markets for those not using this particular digital platform. If you own a rural business where the local customer base is limited, digital platforms are especially helpful for expanding your customer reach.
Even if you’re located in an urban area, more and more studies find that consumers prefer the ease and convenience of digital transactions. According to a Visa survey, more than 80% of consumers mention that digital tools such as an easy-to-use website or online loyalty program are motivating factors when deciding where to shop. An online presence also enables your business to be discovered by potential customers, whether they shop online or at your brick-and-mortar. By updating online profiles on Yelp and other platforms, your business becomes exponentially more discoverable.
That same Visa survey found that 61% of consumers plan to increase their online purchases over the next five years, while 78% plan to decrease or keep their in-store purchase the same. This shift toward online purchases was happening even before the pandemic took root. Imagine what it must look like now—and for the next year or more.
As a small business owner, you know that improving your customers’ experience builds brand loyalty and increases revenue. Today, that customer experience doesn’t always start—or end—in your store. Research company eMarketer estimates that 25% of purchases started in-store are complete online, and 25% of purchases started online are completed in-store. Both sides of the coin must be functional, welcoming, and easy for consumers for the optimal success of your business.
Leveraging digital tools can also help you reduce costs. In a report by Deloitte, 22% of small businesses that use digital tools said that it helped reduce operating costs, while 70% reported revenue growth that could at least partially be attributed to their use of digital tools. Visa’s survey similarly found that small businesses reported 57% less average cost of processing digital payments, inclusive of direct expenses and labor costs, compared to processing non-digital payments. This combination of increased revenue and decreased costs is a boon to your bottom line—one that’s particularly welcome during a public health and economic crisis.
It’s time to think about the future of Main Street—not just as a physical location, but as a digitally-enabled playing field. It’s time for small business owners to build the digital resilience of their enterprises.
Is your business looking for a true banking partner? Check out the solutions we offer that can help you reach your goals.