By Rieva Lesonsky
Small and micro businesses (SMEs) are looking “beyond the high street” and “plan to prioritize cross-border sales”, according to the seventh edition of Visa Global Return to Business Study. And American companies aren’t the only ones with global growth in mind. The study examined consumers and small businesses across 10 international markets: Australia, Brazil, Canada, Germany, Hong Kong, Ireland, New Zealand, Singapore, United Arab Emirates (UAE) and the United States.
This global shift is fueled, in part, by entrepreneurs’ adoption of new technologies, including digital payment solutions such as cashless transactions. This is key as the survey also reveals that 55% of consumers expect to increase their use of digital payments this year.
The Covid-19 pandemic has halted the growth plans of many small businesses. But many entrepreneurs are getting back on track. Jeni Mundy, global head of merchant sales and acquisitions at Visa, says she “sees the small business mentality shift from survival mode to growth mode, as SMBs harness the power of digital payments to improve efficiency, achieve new audiences and simply thrive in today’s world. an increasingly digital world.
Mundy adds: “It used to be that only large companies could scale to access customers across the country or around the world, but today small business owners can live virtually without borders. »
The latest small business mentality
The Global Back to Business study shows how many SMEs are changing their mentality:
Ready to explore the world
Seventy-nine percent of business owners surveyed say they focus their growth strategies on “expanding into new geographies.” Smaller in-store and online retailers are even more ambitious: 90% say they see cross-border sales as a growth opportunity.
And the world is ready: 72% of consumers say they already feel comfortable shopping globally. Some consumers are still hesitant to shop globally, but believe card protection (50%), positive reviews (43%) and shipping guarantees (34%) would increase their comfort level and would encourage them to shop globally.
Plan to switch to cashless payment
This is an aspiration for almost every small business surveyed: 95% of entrepreneurs say they plan to go cashless “one day.” But some small businesses are more motivated: 35% recognize that accepting new payment methods is an opportunity to reach new customers, and 51% plan to go cashless in the next two years by accepting the use mobile payment. apps (55%), mobile wallets (50%) and contactless cards (36%).
More marketing
To reach new customers, business owners surveyed plan to increase their social media presence (44%), offer new products or services (41%), and invest more in marketing in general (40%). %).
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The new consumer mentality
No matter who or where your customers are, it’s essential that you understand today’s consumer mindset. Eighty-two percent of shoppers say they have already used digital payments for an average of 58% of their purchases, 55% of consumers plan to increase their use of digital payment tools, and 40% plan to move to cashless payment . Additionally, 59% of consumers abandoned their cart when they realized digital payments were not available.
Another factor that drives customer sales is sustainability: 68% of consumers say a company’s sustainability practices have at least “some impact” on their decision to buy from them. And 77% say they will pay more for sustainable products and services.
In addition to shopping globally, consumers surveyed plan to invest their time and money locally. Nearly half (49%) say they will support their local economy and shop more at local businesses in the coming year, and 44% plan to make personal connections in their community. If you own a physical retail store, consumers expect you to accept contactless cards (57%), mobile payment apps (49%), and mobile wallets (49%).
Additionally, digital payments are encouraging local customers to tip more often, with 77% of consumers saying they have noticed more stores accepting (and even encouraging) the use of digital payments for tipping, and 43% of these consumers feel more pressure to tip.
Small businesses and new technologies
In addition to adding digital payment solutions, 91% of small businesses are “at least somewhat likely” to consider using automation and AI services like ChatGPT in the next 12 months “to help elevate their business relative to their competitors.”
Adopting new technology solutions is a somewhat scary concept for most business owners surveyed. Only 33% say they are “completely confident” in their ability to scale their business and “keep up with changing technology and consumer preferences.” Many more (67%) say they are less confident in performing these tasks.
Many small businesses surveyed are also concerned about cyberattacks: 67% say they don’t think their business can fully recover from a fraud incident or cyberattack.
SMEs are “not too small to go global”
THE Small Business Administration (SBA) encourages entrepreneurs to do business internationally, emphasizing that small businesses “are not too small to go global.” The SBA says small businesses that engage in exporting “are more likely to increase their financial results, expand their footprint, grow at higher rates, and employ more people.”
The agency adds that selling internationally is a smart way to diversify your customer base while protecting your business from the “ebbs and flows” of the U.S. market.
About the Author
Rieva Lesonsky is CEO of GrowBiz Media and SmallBusinessCurrents.com and has been covering small business and entrepreneurship for over 30 years. Get more insights on business trends by subscribing to her free Currents newsletter.
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