The Black Friday frenzy
No one could avoid being wrapped up in the retail frenzy of the last weekend in November. Online UK sales over the Black Friday and Cyber Monday period reached unprecedented levels, growing 36% from 2014 to £1.1 billion. Originally a US phenomenon, these shopping milestones arrived in the UK in 2013 and have changed the face of retail forever.
Technology is disrupting not just retail, but most – if not all – sectors. Tech start-ups and small businesses are thriving in this digitised landscape, as we have seen from the growth of Tech City and the Government’s phenomenal support for it.
However, traditional SMEs are struggling to keep up. Just 30% of UK SMEs actively trade online, which means the majority of small businesses are losing out on business from customers who predominantly look online to purchase.
Social media channels are now important facilitators for businesses to interact with their customers. Research we commissioned found that 65% of micro-businesses are using social media for business purposes, with LinkedIn, Facebook and Twitter cited as the most used channels. However, only 9% of SMEs surveyed cited social media as ‘very important’ to their business strategy, suggesting that there is a gap between SMEs’ perceptions of social media and the reality of these channels’ ability to drive consideration and sales.
Lessons for SMEs
To maximise reach, SMEs should consider establishing an online presence and enable the online payments which many customers now expect. Functionality that enables online and mobile payments allows small businesses to expand their customer base. But a website on its own is not enough. SMEs need to know their customer and target them across the digital platforms they inhabit, speaking to them in their own language and regularly engaging them in ongoing conversations.
Keene and Lord Recruitment is an example of an SME which has utilised social media channels to enhance their services, through the advertisement of vacancies on their Twitter page. The nature of the recruitment industry means the company must fill vacancies quickly, and have successfully used social channels to their advantage to post new roles to their online community in ‘real-time.’
The changing face of SME financing
Digital disruption is also strongly influencing the nature of SME financing. Online peer-to-peer lenders and invoice trading platforms are a sure fire way of securing short-term funding quickly, but to achieve sustainable growth, a long-term partnership with a relationship-based funder may be a better option.
It’s for this reason at Bibby, we strive to ensure that our online channels are effective and user-friendly, but that we also have dedicated relationship managers available at the other end of the line.
In a world where disruption, big data and digital are the watch words, combining human relationships with new technology is more important than ever. Relationships are no longer confined to the realms of face to face and phone: they now ‘live’ on a variety of different mediums and platforms, offering countless opportunities for businesses and customers to interact and speak to one another.