SME retailers: Can you afford to lose out on £8.7bn1?

By Anita Liu Harvey, Vice President of Strategy and Innovation
Mon Aug 07 2017

Do you offer shoppers ‘one-click’ ordering? Do you run a customer reward scheme? Can your customers pay however they want to? If you’re an SME retailer, answering ‘no’ to any of these questions could mean a huge dent in your sales and a costly problem with loyalty. 


Online and bricks and mortar SME retailers told usii; that their revenue and customer loyalty is suffering because they’re struggling to meet consumer demand. Failing to keep pace with shopper demands for so-called ‘frictionless’ payments could mean seriously stunting your business growth.

A lack of tech could mean 10% of shoppers abandon their purchase

Shoppers who can’t pay how they want to pay may well abandon their purchase. So that’s people who want to pay using contactless but can’t, for example. Or who want to check out using a ‘one-click’ option, where payment and shipping address details are stored so they only need to be entered once.

In fact, SME retailers reckon as many as one in 10 shoppers will abandon a transaction for this very reasoniii. 16% of SME retailers believe they have lost customers in the last 12 months due to a lack of payment technology onlineiv. That’s equivalent to around £8.7bnv a year in lost sales. And when the payment solutions that enable ‘one-click’, digital wallet payments and contactless are so readily available, such abandonments are very much avoidable.

The same troubles hit online and high street retailers

We often talk about cart abandonment online, but high street retailers actually face similar issues in store. Queues for the checkout are a huge frustration for customers; in fact 42%vi said it was their biggest frustration in the shopping journey. Equally, in the world of food and drink, 49% of people said waiting for the bill was a frustration and 59% said being kept waiting for food was their biggest annoyancevii.

So people don’t like to wait…

I mean we knew that already, right? And yet the problem of shoppers not getting what they want is still not being addressed adequately. And that’s not an entirely surprising fact. After all, as an SME, time is incredibly short and resources often stretched well beyond breaking point. So how can you keep up with consumer demand and net the pounds and loyalty it can bring?

Invest in technology or risk being part of a business demographic missing out on £8.7bn a year. Because even though 38% of SME retailers say they think their size allows them to be more nimble than larger competitors in responding to changing consumer demands, it still takes time to decide how to respondviii.

My colleague Sharon Manikon, Managing Director of Customer Solutions at Barclaycard, said:

“Payment technology is continuing to evolve at pace and as our data shows, small businesses who don’t keep up with this rate of change are potentially missing out on both sales and customers. But keeping up with shoppers’ expectations needn’t be as costly or complicated as SMEs think; with the right partner, they can easily find a solution that works for both them and their customers.

“Speaking to payment and technology experts will help SMEs identify the most cost-effective options for their specific needs. As consumer demands vary from business to business, it is also important that SMEs seek feedback from their own customers to understand what support and services they see as most valuable, and develop their offering in response.”

My colleague Sharon Manikon, Managing Director of Customer Solutions at Barclaycard, said:

“Payment technology is continuing to evolve at pace and as our data shows, small businesses who don’t keep up with this rate of change are potentially missing out on both sales and customers. But keeping up with shoppers’ expectations needn’t be as costly or complicated as SMEs think; with the right partner, they can easily find a solution that works for both them and their customers.

“Speaking to payment and technology experts will help SMEs identify the most cost-effective options for their specific needs. As consumer demands vary from business to business, it is also important that SMEs seek feedback from their own customers to understand what support and services they see as most valuable, and develop their offering in response.”

Don’t forget about loyalty, as well as outright sales

Loyalty is a critical factor for all retailers. After all, repeat custom equals more sales than new sales alone. And did you know that four in 10 consumers say how a retailer rewards their loyalty affects their choice of where to shopix? In other words, if you don’t reward loyalty, you might well lose your customers to competitors.

Surprising then, that despite 42% of SME retailers believing their size means they can foster loyalty in a way bigger brands maybe can’t, only 16% think loyalty schemes are important. And only 22% think providing discounts for repeat customers is important. Those figures are baffling really; especially when you consider that 42% of people are more likely to choose one retailer over another if their loyalty for repeat custom is rewarded with discounts. And 41% of shoppers saying they’d be drawn to a retailer if a loyalty scheme were in placex.

Getting it right for your shoppers isn’t as hard as many SMEs think

Because consumer demands change so often and because of the pace of change in payment technology, feeling a lack of confidence in the ability to keep up is an understandable challenge for SME retailers.

The research we carried out found that SME retailers haven’t updated their payment strategy for an average of 16 months. Only one in five has consulted a payment provider to discuss their options, saying that a lack of confidence is one of the main reasons why. Getting started is often the most daunting first step – 25%xi of SME retailers admit that they think it would be too complicated to start selling online – but it really doesn’t have to be.

The easiest first step to giving shoppers what they want in terms of the purchase experience is to understand that all consumers want the same thing when it comes to payments. They want the process to be easy, secure and reliable.

While some want a personalised, one-to-one experience where the payment is an ego boost (think high-ticket price items), others will want it to be quick, with no queuing and no delays. But no matter what, offering reliability and choice is crucial.

Talking to a trusted payment provider is a good next step – see what products and services are out there that can help you take the payments your customers want to make.

Speak to us today to find out how we can help your business - 0800 096 8199

Are you sure you have the payment systems in place to take advantage of a new era for retail? We’ve got the data, insight and expertise to set you on the right track for the future.

Barclaycard research: Online interviews were carried out with 253 senior decision-makers from SMEs by Opinium research in April 2017. The figure of £8.7bn (£8,727,606,519) was calculated using the average total number of occasions within the past year a transaction was abandoned because a specific payment method was not available, multiplied by the average total estimated value of these transactions. The gross figure was then multiplied by the average proportion of total retail sales value made by SMEs over the previous twelve months (21.11%) to provide an estimate of the total amount lost by SME retailers.

ii Barclaycard research: Online interviews were carried out with 253 senior decision-makers from SMEs by Opinium research in April 2017.

iii Barclaycard research: Online interviews were carried out with 253 senior decision-makers from SMEs by Opinium research in April 2017.

iv Barclaycard research: Online interviews were carried out with 253 senior decision-makers from SMEs by Opinium research in April 2017.

v The figure of £8.7bn (£8,727,606,519) was calculated using the average total number of occasions within the past year a transaction was abandoned because a specific payment method was not available, multiplied by the average total estimated value of these transactions. The gross figure was then multiplied by the average proportion of total retail sales value made by SMEs over the previous twelve months (21.11%) to provide an estimate of the total amount lost by SME retailers.

vi https://www.home.barclaycard/media-centre/press-releases/high-street-struggles-to-meet-demand-of-time-poor-and-tech-savvy-shoppers.html   (Research carried out September 2016, by Opinium on behalf of Barclaycard)

vii Barclaycard research: Online interviews were carried out with 2,001 nationally representative UK adults (aged 18+) by Opinium research between 16th and 21st September 2016

viii Barclaycard research: Online interviews were carried out with 253 senior decision-makers from SMEs by Opinium research in April 2017.

ix Barclaycard research: Online interviews were carried out with 253 senior decision-makers from SMEs by Opinium research in April 2017.

x Barclaycard research: Online interviews were carried out with 2,001 nationally representative UK adults (aged 18+) by Opinium research between 16th and 21st September 2016.

xi Barclaycard research: Online interviews were carried out with 2,001 nationally representative UK adults (aged 18+) by Opinium research between 16th and 21st September 2016.

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