The pandemic restrictions are being slowly loosened, and the usual brick-and-mortar stores in countries like the United Kingdom, Ireland, France and Czech Republic, are being opened again, while some states in the US are planning to do so soon. The US saw more than 31% of small businesses close down last April, and many had to move online in order to survive. But with recent re-openings growing in number, small merchants might be considering closing their e-stores as the business will be slowly coming back ‘to normal’.
While small businesses going omnichannel initially might have been because of a need to survive, Frank Breuss, Co-Founder of Nikulipe, a FinTech company connecting fast-growing and emerging markets with the global payments industry, said that continuous use of e-commerce solutions is vital for small and medium enterprises (SMEs) if they want to have sustainable business growth in the long-term.
“There is a risk that many smaller merchants will go back to running only the physical stores, with a possibility of closing the e-stores they run now, but it would be a waste to neglect or even stop their e-commerce business once life moves towards the normal pace again. Maintaining the presence in the e-commerce space will allow them to access new, sustainable revenue streams, as well as better compete with the big e-commerce players like Amazon or eBay.”
Sustaining the revenue could be a challenge if the existing local payment methods (LPMs) are not exactly in tandem with the needs of small merchants. Breuss noted that creating LPMs, tailored for including small merchants, like the ‘buy online, pick-up in store’ (BOPIS) option, would be the best solution in order to help them maintain the business growth experienced during the pandemic.
A significant number of shoppers are making use of the ability to buy and pay online, picking up their orders in store. A recent McKinsey report found that 56% of shoppers plan to continue the shopping behaviour they have adopted since last year. Shoppers have come to appreciate the many conveniences omnichannel shopping can provide, and BOPIS seems to be one of the trends that might not go away.
“SMEs in Emerging Markets have faced a rather harsh existence – most have had limited prospects for growth and short life cycles – however, their shift to e-commerce and becoming omnichannel, which they might not have done prior, led them to reach larger audiences. There is, of course, still much to do in terms of cross-border solutions that would be a perfect fit for the shoppers too, but SMEs in these markets are on the right track,” explained Breuss.
Diversifying LPMs for reaching additional target groups is also something that could keep the sustainable revenue flow for smaller merchants, as the volume of e-commerce users continues to grow, with global sales predicted to reach US$4.2 trillion this year. Open Banking solutions, allowing Payments Industry FinTechs to create new, safe and even pan-European local payment methods, could work as a more easily applicable payment method for SMEs to employ.