Eighteen months ago, digital connectivity was an optional add-on for small- to medium-sized businesses (SMBs). It was nice to have, perhaps, but rarely considered a need to have.
The local corner shop more likely than not didn’t have much of a digital presence for the very good reason that it didn’t really need one, and it was easier to just get by without one, serving the customers who happened to stop in as they were going by. Becoming part of the connected economy was strictly optional a short year-and-a-half ago, and for a lot of small merchants, it didn’t look like an option much worth pursuing.
But that isn’t the world we live in anymore, Payoneer CEO Scott Galit told Karen Webster when he stopped in to talk payments in the connected economy. Connectivity is no longer optional.
“I think it’s crystal clear now that it doesn’t matter what type of business you are in, whether you’re selling through just digital channels or whether you’re just selling via physical retail, you have to think in a digital-first way in order to stay relevant,” Galit said.
He noted both the opportunity and the challenge in the new world of retail. The players, large and small, that have risen to it, embraced the change and taken advantage of the tools out there to build communities out of connectivity have succeeded in the U.S. and around the world. Digital and hybrid channels have seen an “explosion of growth” as firms worldwide have had an opportunity to redesign their entire customer relationship leveraging the tricks and tools of digitization.
What firms need to ask now is what’s next. Nearly a year-and-a-half into the great digital shift, most folks have a pretty good idea of where to start — selling on Amazon, adding on delivery, offering services on Fiverr, building up their Shopify store — but aren’t sure where to go from there or how to take advantage of what they’ve already built to go in additional directions.
“What we see especially with these small business owners, is there really isn’t a great playbook to follow in this environment, and they need partners so they get a little bit of a leg up to give them the best chance of succeeding,” Galit said.
The Power Of Being Big In A Digitizing World
Amazon has taught the market many things over the years, Galit said, most recently the power of connecting the advertising experience to the commerce experience such that any digital context wherein there are customers gathered can be leveraged as a context for commerce.
That ability to leverage connectedness into contextual commerce, he said, has acted as a powerful flywheel for players like Amazon, Google and Facebook to aggregate all those eyeballs into opportunities to identify relevant, tailored offerings for them.
“It’s a super interesting dynamic environment, but I think basically the opportunity to create context-driven commerce in a connected economy is unprecedented,” Galit said. “And I think we will just continue to see the acceleration of these trends in the future.”
Moreover, he said, we see these same players think more expansively, moving into areas like financial services and healthcare. The winners in this new game, the big digital players, tend to “win bigger” than they have historically because their flexible, powerful infrastructure gives them the ability to jump verticals, or at least blur the lines between them, more efficiently and effectively than has ever been possible in the past. They can leverage more data, tap into more consumer touchpoints, start embedding financial services capabilities — they can really start using the connected economy to actually aggregate more services more quickly for more consumers than ever before. Platforming those services and delivering relevant commerce opportunities within those contexts is incredibly powerful.
“There really are embedded advantages for some of these bigger players,” Galit told Webster.
Keeping SMBs Relevant
The large players on the field — Google, Facebook, Amazon and Shopify and the like — have an undeniable advantage, but SMBs have one as well, Galit said. Individually, they are tiny, but collectively they are a mighty force — and one that the Payoneers, Stripes and Squares of the word have discovered holds a viable business opportunity for building a bridge to the connected economy.
Those bridge products are designed to enable businesses from anywhere in the world to “fulfill their potential” by taking the friction out of digitizing their business and offering them access to tools they otherwise would never be able to get access to.
Shopify, he noted, provides some very sophisticated tools to small merchants, as does Payoneer and many of the various Software-as-a-Service (SaaS) platforms out there. Leveraging technology to reduce friction means it is possible to operate a successful platform that can provide tailored, relevant, affordable services for those businesses no matter what their size.
“We need to continue to help SMBs take advantage of some of the opportunities that they have in the connected economy,” Galit said. “If we do, we’re going to see many more of them pursue these opportunities and succeed.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More