New normal has left the building – eCommerce opportunities Financial Services should be aware of
Before the pandemic, eCommerce growth had been steady and predictable for more than a decade.
When the Covid pandemic set in, many retail stores shifted online, as not doing so meant closing of their business. Most SMBs with only a brick and mortar physical location have opened an online presence to be able to keep selling their products or services.
Financial services were also greatly impacted by the pandemic. The lockdowns and economic downturn have resulted in an increase in loan requests from both private users and businesses and a surge in the adoption of digital payment providers. Additionally, there has been a focus on providing trade financing to enterprises that have demonstrated the ability to successfully transition to e-commerce models. As a result, the demand for companies such as Shopify, Wix, WooCommerce, and the likes skyrocketed._
Everything was shifted to accommodate the huge online demand in 2020.
It was then believed to be the new norm and is here to stay – only to be proven wrong when numbers started going back to their original rates around July-September of 2022.
It seems we are returning to the prediction made pre-covid projections.
In 2022, according to Tarci data, 10% of eCommerce businesses opened a physical location in 2022, this represents an increase of 35% which indicated a growing trend of people going back to stores, and being a solely online business might not be enough; we anticipate this growth to continue and we are likely to see more and more SMBs opening a physical store in addition to having an online presence.
Before Covid hit, up to 24% of employees worked from home, now almost 40% of US employees did some or all of their work from home. ( Out of those, 59%(!) more than half of workers in management, business, and financial operations have worked from home)
This is a huge shift in how people manage their time and changed buying preferences. Could it be one of the reasons why people have a bigger tendency to go to physical stores as a means to get out of the house?
According to data from Tarci, 15% of SMBs that are opening a new physical location have added a new payment provider. This suggests that if you are able to identify SMBs that are planning to open a store, they may be in need of various financial services, such as loans to fund the opening of their physical location, change their payment provider to a more suitable one, and secure more favorable interest rates. Other potential financial products that these businesses may be interested in include travel credit cards to help their employees travel more efficiently, and improved credit lines. By targeting these SMBs, you may be able to offer them a range of financial products and services that can help them achieve their business goals.
If you are a financial institution, you have an opportunity to grab a big portion of this market if you can identify beforehand those companies who are in that 15% who are about to open a physical location for the first time.