Technology is changing the way we shop, pay, and connect. Small and medium-sized businesses (SMEs) across the UK are adapting to keep up with these changes.
From online shopping to digital payments, customers want faster and more convenient experiences. For businesses, going digital is no longer optional. It is now essential.
This report, commissioned by Visa with Maru/Matchbox and Insight Consultancy, shows how UK SMEs are using digital tools to grow their sales, improve customer service, and save time. Let’s look at the key takeaways and some real-life examples of businesses that have embraced digital transformation.
Key Findings:
- Consumers Are More Digital Than Ever
- In 2019, UK consumers spent £106.46 billion online, making up 22.3% of all retail spending. This number is expected to reach 27.9% by 2023.
- Mobile shopping is growing quickly. It increased by 16.7% in 2019 and now accounts for more than half of all online sales.
- First impressions matter. Nine out of ten consumers prefer businesses with easy-to-use websites. Two-thirds search online before visiting a shop.
- Customers also want businesses to communicate with them through digital channels like email, websites, or social media.
- Digital Payments Help Businesses Grow
- Eight out of ten consumers prefer to pay with cards or bank transfers.
- Over half of SMEs say their customers spend more when paying by card instead of cash.
- Almost half of SMEs reported a 12% increase in sales after accepting digital payments.
- Processing payments is faster too. Handling £100,000 in digital payments takes only 103 hours, compared to 758 hours for cash or cheques.
- Digital Tools Improve Customer Experience
- More than 80% of consumers value digital services like online ordering, loyalty programmes, and quick responses to questions.
- Younger customers, especially millennials and Gen X, are drawn to features like self-service kiosks, order-ahead options, and free Wi-Fi.
- Over half of SMEs agree that offering these services has helped increase their profits. But only 29% have adopted tools like online ordering or self-service kiosks.
- Loyalty Programmes Bring Customers Back
- Nearly three-quarters of consumers are more likely to return to businesses that offer loyalty programmes.
- Most customers prefer digital loyalty programmes over traditional punch cards.
- SMEs that offer loyalty programmes see more repeat business, larger average purchases, and higher overall revenue.
- There Is Still Room to Grow
- Just over half of SMEs have an online presence, yet online sales make up more than a quarter of their total revenue.
- Retail businesses are leading the way in digital adoption, followed by service-based businesses and the food sector.
- Many SMEs are missing out on the benefits of digital invoicing, even though nearly 70% say it helps them get paid faster.
- While about half of SMEs use digital tools from their bank or credit card company to manage expenses, most are unaware of other tools that could help them run their businesses more efficiently.
Real-Life Examples:
- The Arienas Collective (Edinburgh, Scotland)
- This artist collective offers creative workshops that people can book online. Most of their customers find them through search engines, social media, and their website.
- They use mobile card terminals to take payments at in-person events, which has helped increase impulse purchases.
- SimplyMeds Online (Essex, England)
- This online pharmacy made it easier for customers to check out on their smartphones. As a result, mobile sales jumped from 14% to over 60%.
- Artichoke Collection (Norfolk, England)
- This fashion retailer sells through physical stores, pop-up events, and its website. By listing products on online marketplaces like eBay, it increased sales by over 300%.
- Bapu Hospitality (Glasgow, Scotland)
- This group runs high-end Indian restaurants and a catering service. With 80% of their sales made by card, they introduced a loyalty card that gives customers 10% off food and drinks, which has helped boost repeat business.
- Handy Gentlemen (London, England)
- This handyman service accepts only digital payments, either by card or bank transfer. This approach has made payments faster and more convenient, with most arriving within two to three days.
How UK SMEs Can Get Started:
- Build an Online Presence
- Register a domain name, choose a reliable hosting platform, and create a mobile-friendly website.
- Use search engine optimisation (SEO) to help customers find your business online.
- Use Digital Marketing
- Connect with customers through email newsletters, social media, and online reviews.
- Sell your products on platforms like eBay or Etsy to reach a wider audience.
- Accept Digital Payments
- Choose a payment gateway that is secure, easy to use, and PCI compliant.
- Offer popular options like contactless payments, digital wallets, and online invoicing.
- Start a Digital Loyalty Programme
- Choose a loyalty programme that works with your point-of-sale system.
- Keep it simple with easy-to-earn rewards and clear benefits.
- Improve Efficiency With Digital Tools
- Use digital invoicing to get paid faster and reduce manual work.
- Take advantage of digital tools from your bank or payment provider to track expenses and monitor cash flow.
- Consider Going Cash-Free
- Test cash-free payments with a small group of customers before making a full switch.
- Train your team to help customers adjust to digital payments.
Conclusion:
Digital transformation is no longer a trend. It is essential for SMEs that want to grow and meet their customers’ changing needs. By building an online presence, offering digital payments, and using tools that improve efficiency, SMEs can attract more customers, increase sales, and save time. The businesses that embrace these changes today will be the ones that thrive tomorrow.
You can find more business and marketing tips here:
Running a business is tough, but managing it doesn’t have to be. If you’re a solopreneur, freelancer, or micro merchant, Xiva is built you.
