A Glance at Business & Consumer Behavioral Change During the Times of COVID-19
The wide-scale disruptions caused by COVID-19 and the financial impact that it has had on businesses has made it apparent that business owners need to rethink their point-of-sale to survive in these tough times. There has been a dramatic shift, both by customers as well as businesses, to ecommerce, driven mainly by the purpose of carrying out safe and secure business dealings.
Therefore, it is crucial that businesses understand the market needs and consumer expectations in order to navigate through the COVID-19 era.
Luckily, Visa has recently released the Visa Back to Business Study that assesses the changes in behaviours of both consumers and small & micro businesses (SMBs).
The study, which was conducted by Wakefield Research between June 18 and June 29, 2020, among 250 small business owners at companies with less than 100 employees in the U.S., Germany, Canada, Hong Kong, Singapore, Brazil, Ireland, and UAE, provides valuable insights into changing business trends. Also, the study took into account the consumer buying patterns of adults in these countries, which sheds light on consumer needs and expectations during these unusual times.
Here are the major highlights of this study.
The Growing Tilt Towards Digital-First Commerce
● ‘Touchless’ Defines Safety First: In all the markets that were surveyed, contactless payments are being increasingly preferred by customers. While 63% of consumers agreed that they would switch to a new business if it offered contactless payment options, 48% of consumers wouldn’t even shop at a store that doesn’t offer contactless payment options. 46% of consumers rated contactless payment methods as one of the most important safety measures.
● Businesses’ Optimism vs. Consumer Realities: Despite all odds, 75% of business owners are optimistic about the future. 71% of global SMB owners revealed that they had gotten support from their local communities in the form of business referrals (33%) and favourable reviews (31%). However, contrary to the beliefs of these business owners, only 9% of consumers admitted to preferring shopping at exclusively local owned businesses compared to 15% of consumers who prefer purchasing exclusively from global brands.
● New Habits Are the Norm: Almost every four in five customers (78%) have made changes to the way they make their payments, which includes going for online shopping whenever possible (49%), using contactless mode of payments (48%), and avoiding cash payments as much as they can (46%). 70% of the consumers switched to a new payment method for the first time, including 26% who have used tap to pay for in-store purchases, 34% who shopped online for groceries or household items, 28% who used the curbside restaurant pick-up, and another 25% who purchased online and then picked up in-store.
Small Businesses Look for Out-of-the-Box Ideas
● Immediate Concerns: SMB owners across the globe are expecting at least six to ten more challenging months before they can make their business fully operational. Some of their immediate concerns include revenue declines (52%), which would lead them to reduce salaries and wages (22%). Also, attracting new customers is a challenge for 46% of SMB owners.
● Taking the Digital Route: While 28% of SMB owners have gone for target advertising on social media platforms, 27% of them have sold products or services online. While 1 in every 5 SMB owners has adopted contactless payments (20%), 33% of SMBs revealed that they have either done away with cash payments or reduced accepting cash since COVID-19.
● Combating Fraud: 53% of SMB owners reported that they are likely to purchase and install a fraud management solution to keep their businesses protected from online fraud.
Encouraging Card Cleanliness Along with Card Payments
● Trying New Approaches: 44% of SMBs in the UAE have enabled contactless payments for the first time since COVID-19, compared to 20% globally.
● Disinfecting Cards After Payment: Nearly two-thirds (67%) of consumers revealed that they take some measure or the other to keep their cards clean, with 33% saying that they disinfect them after usage.
So, What’s Your COVID-19 Business Strategy?
For starters, go digital. With the onset of COVID-19, businesses have found themselves in rather unchartered territory. The growing consumer self-awareness and caution has made them disproportionately inclined to digital shopping and online mode of payment. Therefore, it is only wise for business owners to keep up with the changing times and move to online payment mediums. However, doing so would require them to analyze their core consumer base and gauge how tech-savvy they are.
To delve deeper into the study, find the full report here.