During the holiday shopping season, countless consumers will use digital payments and commerce technology to buy gifts from distant companies — some overseas, some just in neighboring time zones — and have them shipped seamlessly to their destinations.
But the same technology that enables those transactions also can bring the benefits of consumer intimacy to brick-and-mortar, small and medium-sized businesses (SMBs) that are often struggling to win more market share in a retail world dominated by the likes of Amazon, Walmart and other large retailers.
That was the main message of a recent PYMNTS interview with Peter Spee, vice president of strategy and corporate business development at AEVI, a FinTech player that wants to bring acquirers closer to their merchants.
Among the most important tasks for SMBs during the 2018 holiday shopping season — and, of course, beyond — is to, in Spee’s telling, keep abreast “of the moods and trends of consumers” and know what they are looking for in terms of “experience expectation, pricing, inventory and product comparisons.” From that work should spring a “seamless” consumer experience that includes not only payments — and relevant payment options — but loyalty program, delivery and even financing services.
That might sound obvious. But that doesn’t mean every SMB is on board with such thinking — or has made the financial commitments to do so. The new Retail Innovation Readiness Index from PYMNTS, powered by AEVI, found that 65.4 percent of retailers said they innovate to improve customer loyalty — a finding that underscores the importance of Spee’s comments about SMBs.
But that report also documented the existence of an innovation divide that is based on company size — SMBs tend to face more challenges when implementing innovation than do larger firms. That said, about 88 percent of smaller businesses surveyed for the Index believe that innovation is essential for survival. That means, at the least, the idea of innovation in this digital payments and commerce world has taken root, even among businesses that might need more of a helping hand to achieve innovation than bigger retailers.
The rise of apps are helping SMBs in the innovation game, Spee said. Those businesses “have access to similar tools that consumers are using” — which can, at times, be a double-edged sword. Apps make it easier for SMBs to dig deeper into consumer behavior — to get to their consumers and offer them personalized offers and upsells, along with associated features like delivery — but it also means consumers are more sophisticated and demanding when it comes to browsing, shopping, buying and post-purchase services. SMBs cannot afford to fall behind.
Consumers can simply use their mobile devices to buy goods online and compare prices — but what happens when those consumers learn that the SMB prices are higher than offered by competitors? During the holiday shopping season, SMBs might have the advantage of, says Spee, operating a warm, inviting store that draws in consumers off the street.
That is where SMBs might have to get a little extra creative in the experience and value-added services they offer, Spee said. “Can they order online and pick up in store? Can they provide the capability to book an appointment easily at the point of sale for installing the product in a consumer’s house, or cross-offer a combination of products” in some package deal that makes up for the price difference? “SMBs can offer the personal touch,” he added.
Providing a personal touch requires consumer data and an understanding of consumer data that necessitates a well-trained staff, who will need at least a few hours — ideally, “an entire day,” Spee said — to get familiar with the retail data systems in play. That is an especially challenging task for SMBs, given staff turnover. The solution they use has to be very intuitive and easy to pick up — a robust loyalty program also could provide information about consumer behavior and lead to more personalization on the part of the SMB, he said.
As important, if not more, is “orchestrating all these interactions into one seamless experience,” he said. That can mean, for instance, making delivery an easy option to select during purchase or having a simple, flexible point-of-sale system instead of a complicated operation fixed to specific points in a particular store.
“You want to be able to take the sale to anyone in the SMB’s store or retail environment,” he said, adding that such a capability not only works to increase consumer satisfaction but increases efficiency in that retailer’s daily operations.
Digital technology can certainly bridge distances but, as Spee explained, it can also help SMBs better know their customers and keep them loyal even as larger merchants boost their own offerings.