A new report from Deloitte Access Economics, commissioned by Salesforce, reveals three digital trends that small business can’t afford to ignore.
For the third year in a row, Deloitte Access Economics has investigated the competitive landscape small-to-medium-sized enterprises (SMEs) are playing within. While some things have remained consistent, such as the perceived benefits of digital technology, the Digital Opportunities for Today’s Small Business report highlights three big digital-led shifts.
Digital transformation is spreading like wildfire across the commercial world, and small business is not immune. Yet the 2017 study reveals that SMEs’ migration to digital technologies is happening a lot faster than anyone expected.
In a similar study last year, SMEs stated that 45% of sales were conducted face-to-face, anticipating this figure to fall to 37% by 2020. Since then, the number of face-to-face sales has already fallen to 39%. If this rate of change continues, the number of face-to-face transactions could fall as low as 24% by 2022.
This trend towards online interaction is being driven largely by customers – it’s how they want and expect to interact with businesses. Credit to SMEs for both responding to this demand and driving change so quickly.
The pressure is now on those small businesses who aren’t online. Making a decision not to change traditional processes and continuing to ignore the benefits of digital technology is effectively a decision to fall behind.
The good news is that there’s some low-hanging fruit for businesses wanting to build their online presence. Social media for one. Only one in five businesses regularly use social media, which means there’s huge opportunity here.
Customer behaviour has evolved dramatically in recent years. The growth in ecommerce players around the world has given customers a plethora of shopping options – they have an unprecedented level of choice.
This shift in behaviour has also triggered a sizable shift in customer expectations. The expectation is for businesses to have a comprehensive and convenient online presence. They expect businesses to know their likes and dislikes, and have little tolerance for those unwilling to engage with them on a personal, one-to-one basis.
This poses a huge potential threat to small businesses. Indeed, 47% of SMEs rank ‘changing customer expectations’ in their top three anticipated business threats for the next five years, making it their number one perceived future challenge. However, as with any threat, this also creates significant opportunity for those SMEs willing to rise to the challenge and put in place business processes that customise and personalise products and services, customer experience and sales.
The report also revealed that, despite historically the customer being at the heart of small business, this importance has intensified of late. In some ways,SMEs are best placed to address customer expectations.
Yet only 30% of SMEs use a CRM system to track customers and transactions – 70% are missing out on the benefits. One of which is financial advantage – those businesses with CRM systems have on average 44% higher revenue than those with no system or basic systems.
Ultimately, there is a danger in complacency. SMEs can no longer relax, safe in the knowledge that they’ll always offer customers a more personalised experience. Businesses at the big end of town have the digital tools to compete on this front. This means that, for SMEs, investment in digital technology needs to be a priority to ensure business survival.
Download the full Deloitte’s Digital Opportunities for Today's Small Business report.