Aussie businesses quickly shift operations to digital to mitigate impact of COVID-19 on bottom lineJanuary 18, 2021 | SYDNEY
- Of the 52% of Australian businesses that accelerated their shift to ecommerce, 68% did so within just one week of exploring the option, while one in five (20%) did so within 24 hours
- New report suggests 62% of local businesses have adopted strategies to rebuild sales, with customer discounts and personalised shopping experiences among the most popular
- Mastercard has added new tools to its Getting Back to Small Business support program, including the Small Business Digital Readiness Diagnostic to help SMEs go digital
Small businesses have been among the hardest hit by COVID-19 in Australia but new research by Mastercard on the impact on their operations shows SMEs nationwide have adapted swiftly to the challenges by embracing digital commerce.
According to the Mastercard study of 806 Australian businesses about their experiences and banking needs during the pandemic, 52% accelerated their shift to ecommerce sales in response to COVID-19. Of these organisations, 44% did so within three days of exploring the option, while 68% were online within a week. One in five businesses (20%) were able to make the change within just 24 hours.
COVID-19 has led to a swift and accelerated shift to digital payments
As consumers rethink the way they shop and pay, opening online was not the only way Aussie businesses sought to accommodate changing consumer behaviour. COVID-19 has seen many retailers shift from cash to contactless card and digital payments as their preferred way to accept payment.
Mobile wallets in particular saw a surge in popularity, especially with organisations with 20+ employees where that preference rose by 23%. More broadly, 17% of organisations claimed they had started taking or will continue to take mobile wallet payments in response to the pandemic.
Australian businesses are finding new ways to attract and retain customers
Three-in-five (62%) businesses adopted strategies to rebuild sales, with 31% using discounting for existing customers and 28% offering new customer discounts. A quarter of organisations (25%) 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%), increased cleaning and disinfection processes (59%) and the adoption of contactless payment methods (51%) being most commonplace. Despite these changes, major concerns remain, with brick-and-mortar retailers citing labour costs (33%), rental costs (31%) and increased price sensitivity from customers (27%) as major challenges.
“Australian businesses have faced unprecedented challenges amid COVID-19 but have shown fierce agility and resilience, with many able to migrate operations quickly and effectively to focus on digital opportunities. 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,” said Richard Wormald, Division President, Australasia, Mastercard.
Mastercard is committed to supporting businesses of all sizes amid COVID-19 and into the future. In August 2020, Mastercard launched its Getting Back to Small Business support program, providing access to more than AU$5,000 worth of educational resources, tools and services per business. Mastercard has now added 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. “In adding the Small Business Digital Readiness Diagnostic to the support program, Mastercard is looking to enable local organisations to seize the online opportunity and future-proof their business.”
In addition to the Getting Back to Small Business program, Mastercard’s Data & Services arm is actively supporting many Australian businesses and government organisations with real-time data-driven insights to help them better understand and respond to the challenges created by COVID-19.
For more information on the company’s efforts to support small business, visit the Mastercard Newsroom. For more information on Getting Back to Small Business, visit the hub at mastercard.com.au/backtobiz.