The global epidemic has changed how we work, interact, and acquire goods and services during the last two years, making the last two years an exercise in unpredictability. Small businesses have probably been under the most stress.
According to a 2021 Visa poll, more than half (54%) of worldwide small and microbusinesses (SMBs) said the previous year was difficult for them – and that they are still recovering.
However, as the pandemic progresses, patterns emerge, and behaviors become more established. This is undoubtedly true in customer behavior, and we’ve seen how small firms that adopted internet commerce fared better during the epidemic. It’s no longer just about pivoting and surviving; there’s a positive uptick in entrepreneurship, with a new breed of digitally-native business owners going online for the first time.
Visa has made a multi-year commitment to digitally equip 50 million small businesses worldwide as the network that works for everyone. We know that small businesses can successfully fulfill new customer demands with the correct tools.
So, how might these businesses gain a competitive advantage in the coming year? Five major themes that will impact the world of small and medium-sized businesses in 2022 are listed below.
1. Experience will be crucial now more than ever.
Covid-19 revolutionized retail, blurring the lines between online and in-store shopping and paving the way for omnichannel commerce. SMBs must rise to the challenge of engaging customers across all platforms, given that the average UK consumer is linked to over nine devices and over five social sites.
Small firms that prioritize experience will be the ones that succeed in 2022. Small businesses can no longer afford to categorize customers into distinct groups: online shoppers, in-store shoppers, and app shoppers. Customers exist across all of these media. Therefore organizations must be prepared to provide a fluid, omnichannel payment experience that is engaging, secure, and straightforward.
2. Sustainability and social impact are no longer exclusive to global brands.
The epidemic was expected to dampen the momentum behind consumer environmental awareness, yet the opposite is true. According to Deloitte, one-third of UK customers intend to buy from brands with strong sustainable (34%) and ethical (30%) credentials.
Gen Z and millennials will continue to gravitate toward ethically and sustainably sourced handcrafted goods and sustainably produced food and beverages. Small businesses are well-suited to meet the needs of socially conscious young consumers in many ways, especially as the pandemic continues to spread globally. According to a Shopify survey, 68% of UK customers believe that purchasing locally is vital, and 51% expect to shop locally more frequently after the pandemic than before. While being a small business can help automatically, to truly win, small businesses must also consider their impact on society – and make sure to communicate this to customers.
3. A seamless payment experience will be critical to a positive client experience.
In a world where transactions are transitioning from cash to cards to digital devices, customers are paying more attention to the speed, security, and convenience of the payment experience. They expect every engagement with a brand to be seamless.
According to a recent survey, 68% of individuals quit an online shopping basket due to issues completing the transaction, with many citing a hard or long checkout process. As a result, they either didn’t purchase or bought the item elsewhere.
Meanwhile, contactless payments are the norm in stores in most parts of the world. Many British individuals chose to tap to pay for the first time during the pandemic and quickly realized that it was also faster, easier, and more secure. According to Visa data, the number of contactless payments made in the UK climbed by 12% to 9.6 billion in 2020, accounting for over a quarter (27%) of all UK payments, with over eight out of ten (82%) in-person purchases now being contactless. We’re seeing contactless payments prosper, thanks in part to small and mid-size businesses who are embracing the technology to stay up with their consumers’ expectations, with the contactless maximum being raised to £100 in October 2021 to satisfy this growing demand.
Payments are more than just completing a transaction. Your brand should – and is – reflected in the checkout experience. It’s also the last chance for small company owners to make a positive first impression on clients before they leave (or leave your site). Customers expect SMBs to make things as simple as feasible for them.
4. Small firms will expand internationally.
According to the World Bank, small and medium-sized businesses (SMBs) account for over 90% of all firms (99.9% in the UK) and more than half of all employees globally. Small businesses have a unique chance to provide products and services to clients worldwide, thanks to the digital adoption over the previous two years and increasing technology.
It used to be that only large businesses could scale so that they could reach customers in other countries. Still, payment technology now makes it simple for customers to pay with local payment methods and currencies – businesses simply need to market themselves in a way that appeals to various “local” audiences worldwide. It’s also crucial to stay on top of commercial and regulatory hurdles; thus, selecting a cross-border expansion partner is crucial.
5. AI and machine learning will benefit small enterprises more.
Artificial intelligence (AI), machine learning, and deep learning have all been used to revolutionize huge commercial operations, from credit decisions to inventory management. As software and hardware costs fall, more AI and machine learning solutions for small enterprises will become available. What difference does it make? AI and machine learning services can increase efficiencies, security, and, eventually, profit.
Small firms are already using AI in various ways behind the scenes. Visa and other financial services businesses employ AI and deep learning to make real-time authorization decisions for small business transactions. In contrast, financial services companies use it to offer consumer installment loans. Many software companies that provide services to small businesses are following suit. Businesses should make certain that their suppliers invest in these critical technologies and pass on the advantages of their knowledge.
The good news is that technology is offering new chances for businesses of all sizes to participate in the global digital economy in a year marked by new expectations and new experiences.