On hold: Small firms lag behind in mobile revolution as just 17% have a mobile-friendly website
Small firms are losing sales by limiting themselves to cash, bank transfer and cheque payments, according to new research.
A nationwide study of 2,000 small business owners and more than 2,000 consumers has revealed the stark gap between business owners who have failed to modernise and their customers’ expectations over browsing, ordering and paying.
Of the small businesses surveyed by PayPal, 44 per cent had never reviewed how they take payment from customers, despite the arrival of digital wallets, contactless payment and the smartphone.
Nice touch: Half the traders at Crafty Fox Market’s one-day events take cards, with contactless popular
Mobile shopping is growing at nearly four times the rate of overall online spending in the UK, and a fifth of consumers most often buy goods or services on their phone.
However, just 17 per cent of small firms have a mobile-friendly website and just 4 per cent have an app that accepts payments.
For firms doing trade in person, cash (70 per cent), bank transfer (62 per cent) and cheques (56 per cent) are still the methods of payment most relied upon, despite contactless card payments overtaking cheques for the first time this year.
Almost two thirds (63 per cent) of consumers said they had abandoned an online purchase in the previous three months because they couldn’t pay the way they wanted. And 56 per cent had abandoned a purchase in a shop for the same reason.
New ways to pay: Contactless card payments overtook cheques for the first time this year
This proved a bigger barrier to buying than poor customer service, checkout queues, restrictive returns policies or delivery charges.
Victoria Molyneux, who handles 2,000 sales a day on her women’s fashion site Want That Trend, which she launched from her bedroom, said: ‘It’s the way the world is going, you have to move with the times.’
TOP FIVE TOOLS FOR START-UPS
Slack, Google Analytics, Amazon Web Services, Stripe and Trello are the five most popular cloud-based tools for tech start-ups, according to a new study.
Most respondents to a survey from Tech City UK, a not-for-profit organisation set up to promote the digital economy, are using between six and 15 online tools to help their business grow.
This made starting and scaling up a firm easier for 89 per cent, while 85 per cent said it had made it cheaper.
Slack is a real-time messaging tool. Google Analytics helps firms appear higher on search engine results. Amazon Web Services offers pay-per-use cloud computing. Stripe allows firms to take payment over the internet. And Trello is a project management app.
Sinead Koehler is founder of Crafty Fox Market, which connects designers with shoppers through market-style events in London featuring stalls, workshops and DJs.
She said: ‘When we started in 2010, being able to accept card payments in a pop-up space for a day using 3G or wi-fi was unheard of.’
She now estimates half the sellers accept card payments, and said: ‘We don’t see customers carrying large amounts of cash, so it’s important.
‘I hear lots of examples of contactless payment increasing sales of lower end items. It’s important not to underestimate the amount of impulse buying at the lower end.’
Some conventional retailers can’t get hold of new payment technology fast enough. PayPoint said it had received more than 2,000 advance orders for its new One platform – an all-in-one device offering retailers Epos (Electronic Point Of Sale) software, a card payment terminal, cash drawer and barcode scanner.
Almost half (46 per cent) of corner shops said they see supermarkets as their biggest competitors, while 36 per cent said enhanced technology and a better understanding of customers was their biggest opportunity for growth, according to research by PayPoint and JWT.