“Digital transformation” has been the buzz phrase for small- to medium-sized businesses (SMBs) of all types over the past half-year as they rushed to reorganize their operations end to end amid the pandemic.
But Vice President Alex Burgin of Authorize.Net (a Visa solution) told PMYNTS that whether talking to a retailer or restaurateur, every SMB recognizes the need to step up its digital offering for the coming holiday shopping season. From website design and inventory to online checkout and buying experiences, everything will need optimization for a shopping season unlike anything merchants have seen before.
“Many who were taking legacy forms of payment before — cash or checks — now have to move to a 100 percent digital this holiday season — and that can be a pretty big shift for many small businesses,” Burgin said. “But as they look to be successful this year, they need to make sure that they’re embracing these digital tools and making sure this customer experience is top notch.”
Of course, that’s easy to say but harder to do when the imperative to go digital doesn’t come with a built-in roadmap for Main Street SMBs. Many have concerns about things like being taken advantage of by the legions of fraudsters who’ve followed consumers on their new digital journeys. Merchants also have questions about where to start when it comes to adding options like contactless payments or mobile features.
And yet, Burgin said, for all the challenges SMBs face from the upcoming holiday season and beyond, the mood in the segment is more hopeful than fearful — and many customers want to help.
“I think the consumers are looking for opportunities to support small businesses during this holiday season,” Burgin said. He added that many customers want to “find ways to be more creative in their purchasing to make sure that they are supporting the economy and small businesses as a whole.”
Strengthening The Digital Offering
Burgin said that consumers are more aware of and interested in shopping locally this holiday season.
But he said he believes they are coming into those shopping experiences with new expectations. Six months of reorienting their lives around digital commerce have raised their baseline expectations for seamless purchase journeys.
“A merchant has to be ready to think about touchless payments, omnichannel, as well as other tools like tokens that enable a small business to recognize a returning customer and give them a better experience versus what they can give a one-time visitor,” Burgin said.
But as seamless and friction-free as experiences must be for customers making legitimate purchases, they have to be equally impenetrable for fraudsters trying to fake being good customers. Burgin said online fraud spikes took an awful lot of SMBs by surprise early on in the pandemic, as many SMBs learned the hard way that they weren’t adequately protecting themselves and were an “easy target” for fraud.
He said what Cybersource and Authorize.Net seek to offer SMBs is a simple set of filters to fend off fraud attacks that is so easy to use that merchants “don’t have to be a payment expert or a fraud expert to mitigate their risk.”
Burgin added that the good news is that SMBs across the board — from retailers to accounting firms — increasingly understand that they’re vulnerable to fraud. They also know that building an end-to-end digital strategy is critical to both providing the good customer experience and the bad fraudster experience.
An Uncertain Holiday Season
Burgin said the landscape ahead for SMBs will be challenging, even with the incredible plethora of tools Visa and other firms have rolled out to smooth the path.
He said entrepreneurs of all descriptions have been under lots of pressure to think fast and pivot sharply all year, and the holiday season will likely only add to that pressure.
But Burgin added that the good news “is that not even COVID will stop the holiday season. According to our research, 68 percent of global small businesses expect the winter holiday season to be a major selling opportunity. Consumers also are carrying their desire for a little normalcy into the holiday season, with nearly 90 percent planning to buy the presents as they have in the past.”
But he said they’ll be shopping far more digitally than they ever have — a reality that merchants of all descriptions need to be ready for. Burgin said that’s particularly true because the changes on display this holiday season will likely foreshadow permanent modifications to the retail landscape that will remain even after the pandemic ends.
That’s because consumers and businesses are seeing that the changes they have already made have in general been for the better for everyone involved in a transaction. Consumers find it easier to get what they want, pay how they want and pick up their goods how they want. As for merchants, they’re increasingly freed of the shackles of being paid in paper and only being able to interact with their clients in person.
“Ultimately, what we are seeing means we’ll have a better long-term effect on the economy in a post-COVID world,” Burgin said. “And to me, that’s exciting.”