New research from Mastercard suggests that when the COVID lockdown hit hard in the first half of 2020, Australia’s small business community was able to respond rapidly by shifting aggressively to a more digital footprint.
According to figures released this week, 52 per cent of the businesses Mastercard surveyed accelerated their shift to ecommerce sales in response to COVID-19.
The speed of the shift is perhaps the most interesting data from the survey. One in five businesses (20 per cent) were able to make the change within just 24 hours, 44 per cent did so within three days of exploring the option, while 68 per cent were online within a week.
COVID-19 also drove the longer term shift from cash to contactless card and digital payments, according to Mastercard.
The company claims mobile wallets, in particular, saw a surge in popularity, especially with organisations with 20+ employees where that preference rose by 23 per cent.
More broadly, 17 per cent of organisations respondents claimed they had started taking or will continue to take mobile wallet payments in response to the pandemic.
According to Richard Wormald, Division President, Australasia, Mastercard. “Businesses have an incredible opportunity to improve the shopper experience online, and industry leaders have a part to play in helping business operators develop that expertise online, using digital payment technologies.”
Three-in-five (62 per cent) businesses adopted strategies to rebuild sales, with 31 per cent using discounting for existing customers and 28 per cent offering new customer discounts. A quarter of organisations (25 per cent) increased their digital marketing investment while 23% delivered more personalised offers for existing customers as a means of encouraging sales.
Physical store operators have also innovated quickly to provide a safe shopping experience for customers, with social distancing (77 per cent), increased cleaning and disinfection processes (59 per cent) and the adoption of contactless payment methods (51 per cent) being most commonplace. Despite these changes, major concerns remain, with brick-and-mortar retailers citing labour costs (33 per cent), rental costs (31 per cent) and increased price sensitivity from customers (27 per cent) as major challenges.
In August 2020, Mastercard launched its Getting Back to Small Business support program, which it says provides access to more than AU$5,000 worth of educational resources, tools and services per business. It is now adding new resources for 2021, including the Small Business Digital Readiness Diagnostic – a free online tool to help entrepreneurs go digital.
“As consumers continue to shift toward digital payments, businesses everywhere are evolving their operations to appeal to their customers’ new preferences. It’s more important than ever that SMEs around Australia better understand and expand their digital capabilities,” said Sumit Khurana, Senior Principal, Data and Services, Australia, Mastercard.