The social distancing and stay-at-home orders intended to reduce the spread of the COVID-19 outbreak have been devastating to small- to medium-sized businesses (SMBs), with tens of thousands expected to close by year's end.
The virus itself is not the only factor in play, however, with the devastating economic downturn and record-high unemployment rates also sharply reducing consumers’ purchasing power and their willingness to make retail purchases.
SMBs are exploring a number of measures to safely reopen without putting their customers at risk, such as adopting mobile wallets and other contactless payment methods. These efforts are paying off, it seems, with 86 percent of SMBs saying they are at least partially open as of August, up from 79 percent in May.
The September Small and Medium Business Reopening Report®, a PYMNTS and American Express collaboration, explores the latest developments in the reopening economy, including how SMBs are embracing eCommerce in record numbers, how customers’ purchasing habits are shifting as a result of the pandemic and the increasing use of contactless payments as a means of safely conducting brick-and-mortar business.
Digital commerce is one of the only truly safe revenue streams available to retailers right now. As such, SMBs are embarking on eCommerce initiatives in record numbers. A PYMNTS study found that 71.7 percent of SMBs have improved their digital capabilities amid the pandemic, with 49.4 percent adding or upgrading their existing online order-ahead capabilities and 50.1 percent revamping their eCommerce offerings. Mobile wallet and digital invoicing functionalities have also grown popular as a means to limiting the risk of infection from physical and in-person payments.
These digital pushes come as customers express reluctance to visit brick-and-mortar stores for fear of infection. Sixty-eight percent of women and 46 percent of men said they were uncomfortable trying on new clothes in retail dressing rooms, for example, with 73 percent of baby boomers and 58 percent of Generation Z consumers expressing the same. Customers are very supportive of protective measures meant to reduce the risk of infection, with 84 percent of consumers saying they were more likely to visit stores with mask requirements.
Different generations have embraced eCommerce to varying degrees, according to a PYMNTS survey that found 40.3 percent of seniors and baby boomers have shifted their shopping habits to eCommerce as a result of the pandemic. This group is still a minority, however, with 59.7 percent saying their purchasing behaviors have remained unchanged despite the pandemic. Fifty-three percent of millennials say the same, although this generation was likely using eCommerce in greater numbers than baby boomers and seniors already.
For more on these and other SMB reopening developments, download this month’s Report.
How Strictly Bicycles Leveraged Contactless Payments Amid The Pandemic
The pandemic has been devastating to the brick-and-mortar retail industry, with experts predicting that up to 25,000 stores could close by the end of the year. It is therefore crucial for stores to rethink their business models, from developing stronger digital presences to adopting contactless payment methods.
In this month’s Feature Story, PYMNTS talked with Nelson Gutierrez, president of New Jersey-based Strictly Bicycles, about how leveraging contactless payments allowed the retailer to safely reopen its doors and keep its staff and customers safe from infection.
Brick-and-mortar stores are facing existential threats during the pandemic, with 60 percent of SMBs reporting that their payments have fallen precipitously since March due to customers’ well-founded fears of contracting the virus via in-person interactions. Many retailers are exploring contactless payment options that forgo traditional swipe methods and PIN pads, reducing the risk of infection.
This month’s Deep Dive explores the various contactless methods that retailers are leveraging to safely conduct business, including mobile wallets and tokenized payment data.
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