The wave of technologically-savvy millennials has cultivated a surge in services, products and apps that all cater to 'digital'. The influx of virtual reality devices, drones and smartphones ensure that tech businesses are in constant competition to introduce the most innovative and formerly inaccessible products on the market.
These tech-focused companies expect to battle with their competitors over the sleekest drone design and most durable smartphone, however so many other businesses are affected that don’t occupy the digital space.
The revolution of the ‘neobank’ has waved goodbye to physical branches, and welcomed an accumulation of mobile apps, with one cumulative intent - facilitation. Transferring money was once confined to a cash transaction or queuing tediously in a bank, however now splitting bills, grouping transactions and budgeting can all be done with the swipe of an index finger. Market stalls and pop-up shops were once solely funded on cash, yet now that consumers have the option to pay contactlessly with their smartphone almost anywhere - it seems a cashless society could soon be a reality.
The technological bug has infiltrated even the least likely of hosts, with tradesmen and taxi drivers offering the ability to pay via contactless technology and smartphone apps, so that it really isn’t necessary to carry cash anymore. But what about the businesses that refute the digital rising?
The cash decline
Research by Expert Market has found that with a quarter of consumers actively avoiding cash-only businesses, these companies could be sacrificing a huge proportion of potential profit. Start-ups are most at risk, making up 99 per cent of UK businesses, and hosting the highest proportion of cash-only vendors. One in ten UK small businesses continues to turn away custom from those wishing to pay by card, constituting potential revenue of over £23,000 annually, per business. By 2025 this figure is expected to swell to more than £35,000, with consumer habits changing and younger generations preferring not to carry cash.
Adelle Kehoe, Head of Expert Market comments: "With such rapid innovation and competition in the financial technology space, the importance of cash payments is only set to dwindle further. Our findings highlight the need for cash-only businesses to adapt in order to remain competitive or miss out on huge profits by choosing not to keep up with consumer buying behaviour trends. As the millennial generation comes of age and their purchasing power becomes stronger, businesses will have no choice but to pay attention to their preferences."
How to ride the digital wave
The prevalence of digital technology doesn’t have to uproot those businesses whose foundations pre-date the digital age, and it certainly doesn’t have to affect their values or vision; the essence of tech is principally to expedite, not hinder. Apps focus on speed and UX, solidifying the customer journey and experience, assuming stronger customer relationships and increased return business.
Naturally, in order to remain competitive and relevant, businesses will need to innovate and adapt to cater for their audiences. Put simply, the digital age favours the digital consumer, and thus the digitally-aware business. Investing in digital payment options, apps and chatbots may seem irrelevant for some industries, but if your competitors are offering these consumer-friendly options, it could already be affecting your business’s bottom line.
With consumers more savvy to fraud, and with higher expectations of quality, branding has become a huge signal of trust. Slow websites, bad UX and broken links all contribute towards a poor customer journey, and alienating your customers is the last thing you want to do.
Remaining competitive doesn’t necessarily have to mean creating an app, amending business strategy and moving to a co-working environment in Hackney Wick. Digitally optimising what you do is dependent upon industry, business size and scope. Simply optimising your website can be a huge revenue driver, particularly for an ecommerce business. The creation of a website in itself can be worth £173,769 for a small business. For retail stores, investing in a credit card machine could be the difference between surviving and thriving. Contactless payments accounted for 911 million payments in 2015, with projections to reach 8,159 million by 2025. Small investments in technology can generate huge company growth, harnessing time efficiency and ensuring more effective operation.
Countries ahead of the curve
The World Economic Forum rated countries in terms of their technological readiness, ranking the United Kingdom eighth, behind Singapore, Finland, Sweden, Norway, the US, Netherlands and Switzerland. The index took into account business and innovation, infrastructure, digital content and economic and social impacts among other factors. Singapore topped the index, ranking first for its commitment to using digital technologies for social impact, particularly using technology to provide government services. The UK faltered behind some of its soon to be estranged EU cousins, due to slow infrastructure growth, but topped the charts in relation to using ICT to reshape business.
As an economy the UK is holding its own in terms of digital readiness, but this validates even more how important it is for those businesses shying away from digital innovation, to adapt and evolve.