By Stephen Benton, eftpos CEO
As Australian businesses continue to feel the economic impacts of COVID-19, another looming challenge emerges – embracing the “new normal” of customer behaviours and preferences.
The pandemic has accelerated adaptation toward digital consumption. NBN Co commissioned research found that nearly half of respondents increased online shopping during the COVID-19 crisis and another survey by BCG found close to one in ten respondents made their first online purchase during the pandemic.
Previously the global digital payment revolution has been led by Gen Z and Millennials, but COVID-19 has forced older shoppers to embrace digital.
In response to the pandemic, some businesses expanded their online presence, others changed their mode of delivery or diversified into new product lines and services.
While the shift to digital is profound, it is not uniform. Habits will evolve as restrictions ease and recovery progresses. Therefore, it is important for businesses to continually analyse the market and their own customer segmentation to ensure they are gaining the right traction online.
The pandemic both united the world and at the same time, brought a focus on local communities like never before. The NBN Co research also found 70% of respondents now consciously supported local businesses online and the same number would like to support more local businesses, but felt they had a limited online presence. These insights reinforce the importance of those small and medium Australian businesses that have yet to develop a digital strategy and online presence, to embrace this new normal.
One thing is certain, shoppers are both wandering the aisles and navigating websites. In response, retailers must find new ways to connect with their customers. There is a massive opportunity for small independent retailers to use the likes of social media to remain connected and in regular communication with their customer base.
Despite the ongoing challenges, now is the time for small businesses to shine and to secure lasting, meaningful relationships with their customers. Being proactive, utilising digital shopping and more payment options, while customising their offerings to their target audiences.
There is no doubt that COVID-19 has seen a downturn in trade for many retailers, and there are many expenses that are fixed, this has added to their operating costs. Retailers are seeking ways to reduce costs, rent relief, seeking extended payment terms for stock, reduced supply chain costs and reviewing the staff hours.
SME retailers by necessity have to be experts in many areas of their business, legal, accounting, (both accounts payable and receivable) Compliance Manger, Marketing, Product Buyer, Human Resources Manager, and understandably must also have a grasp on their banking and finance, while also trying to reduce the cost of their banking fees. It is not surprising that most small retailers and many larger retailers do not understand payments.
Now more than ever before, banks, retailers and payments companies like eftpos have an opportunity to work and grow together to help employ more people and build a stronger Australian economy.
Australian Retailers Association chief Paul Zahra says the pandemic has brought forward years’ worth of disruption.
“There is no doubt COVID-19 has accelerated trends that were already occurring in the retail industry,” Mr Zahra said. “Consumer behaviour, once it changes, is embedded. What we will see is this move to contactless shopping and shopping online. Those retailers that are doing that are going to survive this pandemic. Those that aren’t able to pivot will be left behind.”
With Australians eager to support the local businesses in their community small and medium Australian businesses need to unlock a whole new world of e-commerce opportunities and meet that demand online.
eftpos is one business stepping up to meet that demand, as we make headway in the digital payment space with our first of many digital payments products.
Synonymous with low cost debit card payments in store at retailers across Australia, eftpos’ extension into the digital realm is an exciting development. Switching on digital payments for card-on-file transactions offers more choice and potential savings for Australian businesses during COVID-19 and recovery.
As critical national payments infrastructure, eftpos focuses on delivering everyday efficient, secure and cost-effective payments for all Australians.
While the transition to online isn’t without the increased risk of fraud, encouraging our new digital payments business has seen zero fraud to date. We are designing our new fraud tools to be risk based and flexible, maturing with the evolving Australian payments landscape. Our digital roadmap and planned market leading fraud management capability will enable the safe expansion of eftpos online, as we build out our digital transaction presence.
Without a crystal ball, it’s impossible to predict what Christmas retail shopping will look like in 2020. What we do know is that the big winners will be the businesses that can pivot to the circumstances, adapt and evolve quickly while ensuring while their customers feel safe and connected.