Every business today is feeling the pressure to digitally transform its operations to keep up with or stay ahead of its competitors. But nobody feels that imperative more keenly than small business and franchise owners. That’s because smaller businesses, which are often in remote locations or at the network’s edge, typically have the most direct interaction with consumers who increasingly expect the same level of digital sophistication they’ve experienced with online businesses and much larger enterprises.
Small businesses and franchises at the network edge want to support their customers just as well, but the ability to continually update their technology infrastructure or applications often falls outside their area of expertise. Despite the challenges, they still must pursue digital transformation or risk getting left behind. Here are three reasons why.
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We’re moving into a digital-first world
Modern businesses are moving to digital-first strategies to accelerate innovation, drive growth, and improve efficiency. The vast majority of small companies are already using some form of cloud computing, which provides them with access to rich applications on a low operational-expenditure (OPEX) basis.
The cloud will increasingly become a gateway to even greater capabilities, particularly in the areas of analytics, artificial intelligence, and automation. As those capabilities are democratized and productized, small businesses will be the key beneficiaries, leveraging advanced technology to develop better products or improve the way they engage with customers.
Consumers are also part of this digital-first world, and their behavior and expectations are evolving as fast as the technology. For example, a Retail Perceptions study found that 76 percent of shoppers practice “showrooming,” first browsing in a physical store but then later buying online. The study also found that 86 percent practice “webrooming,” shopping online but then making a purchase in an actual store. In other words, both the in-person and online components are part of the typical shopping process. If small businesses and franchises don’t recognize that the two are intrinsically interlinked, they’ll be at a distinct disadvantage.
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Cybersecurity and compliance are critical
The proliferation of Internet of Things (IoT) devices will undoubtedly expand, and with it, the use of contextual customer information. At the same time, consumers are becoming increasingly cautious about sharing data. Regulators are stepping in as well, and businesses have to comply with regulations such as PCI security standards or the EU’s General Data Protection Regulation (GDPR).
How can small businesses and franchises ensure the security and privacy of customer data while leveraging technologies that can potentially improve their experience? When is it acceptable to collect data about a customer’s location using IoT devices, and how should that data be protected?
As with other advancements, cybersecurity technology for the digital age is rapidly becoming available for small businesses, including security measures such as multi-factor authentication, multi-layer security, and advanced encryption. Now these businesses can easily separate traffic into separate networks so that each application and its associated data has its own space and doesn’t infringe on any other applications in the system.
As a result, access to such cybersecurity methods and technologies is making digital transformation much more realistic for even the smallest businesses.
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Customer experience is king
Consumers have more power than ever before and, frankly, they know it. Nothing is more critical to business success than providing more benefits and a better experience than your competitors.
The ideal customer experience is seamless, frictionless, and personalized—with an online and mobile experience that is tightly integrated with the in-store experience.
Plenty of businesses offer loyalty programs, and some local businesses still offer the most basic of loyalty programs: for example, get 10 stamps on a business card and receive your 11th purchase free. But in an increasingly digital world, a loyalty program should be integrated with both the customer’s mobile device and the business’ point-of-sale systems, including mobile point-of-sale. It should track the customer’s preferences, offer discounts, and integrate with the customer’s preferred digital wallet app.
The overall goal is to create an affinity for the business and a sense of trust that extends beyond the walls of the physical location. With so many businesses beginning to take advantage of the tools available to them, any that neglect to do so will soon start to appear conspicuous.
Tap into local knowledge and expertise
This is the world small businesses live in. The good news is that they still have an advantage in building personal relationships with their customers. They’re part of the local community and they understand the mindset of their nearby customers.
Tapping into that knowledge can be a great strength. While many small businesses may fear the perceived threat from online shopping and big business, the tools for digital transformation are rapidly becoming available—bringing unprecedented insight, security, and customer experiences. The businesses that can combine those tools with their existing strengths will ultimately be the big winners in the marketplace.
