It is absolutely no surprise that consumers are more focused on online shopping than ever before due to the outbreak of COVID-19. The exponential growth in online shopping and reliance on digital payment methods has made it vital for SMBs to make changes to the way they accept payments. Demand for goods and services online has never been higher, but competition has also increased massively and will continue to in the next 12 months.
Using new research commissioned by Rapyd, this article explores why SMBs need to establish or grow their online sales platform this side of Christmas and why getting online is for life and not just for Black Friday/Christmas!
The driving force for online payments
The battle between e-commerce and physical retail will continue. As consumers increasingly make purchases online to deal with the pandemic’s lockdowns, the chances are that many will simply enjoy the convenience that it has offered and be reluctant to return to shopping in a physical store. So apart from convenience what other driving factors are encouraging consumers to shop online?
Rapyd’s latest commissioned research discovered that the security of online payments has become more of a driving force for payment choice in the last 6 months. Naturally, the more people shop online, the more it opens the door to fraud. Therefore, if you’re thinking about setting up an online store for your business, it is important to understand the risks in accepting online payments and security measures that can help keep both your business and your customer’s details safe.
Post-pandemic trends for online shopping
The chances of consumers returning to their pre-COVID buying behaviors are slim. Not just in terms of buying online, but also regarding their preference for secure digitalized payment platforms. This includes paying by telephone for click-and-collect services.
Our research shows that while debit and credit card use is still buoyant, paying by cash fell by as much as 52% in a typical 2020 month. The leaning towards new ways to pay online includes a predicted 40% increase in the use of mobile wallets and a 26% increase in the use of debit cards.
Importantly, our research in conjunction with the RFI also shows that the pandemic is expected to have a significant impact on the income of more than 28 million consumers in the UK, including a marked decrease for as many as 22 million. Naturally, this explains why so many believe their spending (and borrowing) will be lower in 2021, with possibly 43% less cash going on buying goods and services. Shopping online will enable those consumers to tighten their spending and shop around for the best prices and deals. This means price & choice may be the driving factor in 2021 for online payment choice.
SMBs are aware of the tightening in consumer spending and the challenges ahead. According to our research, 4 out of 10 offline merchants intend to change their online behaviors. However overall, improving efficiency is the key focus for merchants surveyed over the next 12 months, followed by the intention to increase annual revenue.
81% of SMBs surveyed already sell online, though 65% of those also rely on income from offline sales. Therefore there is still a real compelling need for SMBs to act quickly to move their businesses with greater confidence and know-how into digital payment platforms.
If SMBs’ key focus is to increase annual revenue, they cannot afford to ignore key online sales opportunities created by Black Friday, Cyber Monday and Christmas. Although online payments aren’t just for these shopping events, it’s for life. Ultimately, getting your business online will be the only way to improve the efficiency of their operations.
Getting an online payments platform fully operational and effective in time for Christmas and the New Year puts SMBs in a good position to start 2021 strong. If they fail to grab these winter sales opportunities it will be detrimental to the future success of their business.