SMEs outpace enterprises in the race to serve the always-on consumer
In today’s digital world, convenience is king. The rise of the internet in the 1990s enabled greater connection between consumers and people looking to sell things. The launch of eBay in 1995, for example, revolutionised commerce by creating an online marketplace with infinite scale, changing the way people purchased products. A little over a decade later, Apple pioneered the smartphone, the pervasiveness of which has powered an undeniable alwayson culture of convenience.
In the same year that Apple unveiled the iPhone, Amazon launched their Prime subscription service, offering one-day delivery. The company has spent the subsequent ten years
conditioning online shoppers to expect faster and more convenient delivery options.
The result today is a market where ‘always on’ is no longer a USP, but a necessity.
The need to innovate quickly in this demanding new landscape, where time-poor buyers of today want near-immediate home delivery, easy returns and a personalised touch, all on a tight budget, is in some ways, starting to shift the advantage away from big players.
SMEs are able to capitalise on market niches much faster than larger companies, and are therefore better placed to serve modern consumers.
Nimble start-ups, for example, have been able to completely disrupt big players and reshape industries through their ability to be more agile and innovative than established players, such as Airbnb in the hospitality market and Deliveroo transforming how people order food.
“What we’ve seen in recent years is a boom in technology start-ups creating new platforms which connect customers with products. They seek to own the customer relationship, but they don’t necessarily own the product”, says Chris Moisan, principal at Adaptive Lab, a design and innovation consultancy. SMEs have found they can piggyback on these platforms, taking advantage of better services and marketing than they could create themselves, and in return get greater access to customers.
“SMEs are smaller, can make decisions faster and have less people and processes to change than larger, more established businesses”, Moisan adds. “What they lack in size, they make up for in speed and the ability to offer a more personalised service. They are more likely to use third-party services rather than employ their own staff or build their own systems, which is often costly, slow and can result in a sub-par user experience.”
Convenience is not just about speed. The consumer experience must be efficient and made as pleasurable as possible. UK SMEs that didn’t exist ten years ago, such as notonthehighstreet.com, have flourished because they make it easy and convenient for consumers to find products that they may have found difficult to track down elsewhere.
The companies that prosper will therefore be those that best adapt to consumer requirements, as agile working becomes a critical business differentiator. Start-ups and SMEs often adopt this way of working and implement new technologies from day one. They are happy to help and advise consumers outside of regular hours and provide them with a personal service to make their lives easier. “That’s not something you typically get with larger firms”, says Roberto Lobue, head of retail at accounting firm Menzies. “SMEs build relationships and get to know their customers better.”
By being more adaptable, SMEs are able to tailor their services to the needs of their customers. “Compare this to the customer service offered at recent highprofile failures such as BHS, which just wasn’t able to adapt to the modern consumer”, Lobue adds.
This adaptability of SME businesses to capitalise on the growing convenience culture, coupled with increases in start-up loans and investors eager to swoop on the next big thing, has left the UK SME community flourishing. In 2016 alone, there were 5.5 million private-sector businesses, up by 97,000 since 2015.
In a 2017 ranking of the top ten most innovative companies in the world by Fast Company, only one – Apple – existed as a large company 20 years ago. While it’s difficult to imagine Google, Amazon and Facebook not featuring in the same list 20 years from now, the breakneck speed of innovation today lends itself to the conclusion that the top ten in 2037 are either SMEs today or haven’t been founded yet.
“Today’s digital giants started out as nifty SMEs, successfully innovating and creating their own rules when it comes to business metrics”, says Grant Caley, UK and Ireland chief technologist at NetApp, which is among the only 15% of companies that aren’t defunct 20 years after going public on the Nasdaq exchange. “SMEs can disrupt larger players simply by their speed and agility - attributes lacking in larger, traditional companies.
They are better able to innovate and disrupt, as they are not lugging legacy technologies and old-school company cultures around with them.” Despite this apparent SME advantage, the budgets, infrastructure and service levels normally found only in large enterprises are hard to compete with. However, modern technologies, such as artificial intelligence are helping SMEs to catch up.
“Technology is moving too fast for some enterprises, meaning smaller, more nimble and flexible companies can delight, and build relationships by providing the always-on experience consumers desire”, says Dean Withey, CEO of AI company ubisend. “Intelligent machines are slowly becoming a business commodity.
In a very short space of time, they will enable SMEs to match the 24-hours-a-day, seven days a week multilingual sales and service levels delivered by the largest enterprises.” AI-powered Chatbots in messenger services for example can facilitate a two-way conversation with customers in the channels they use the most and feel most confident communicating in. In a reversal of a long-held business scenario, SMEs are now starting to lead the way in meeting the evolving expectations of consumers while large companies play catch-up.
Serving the convenience culture relies upon a challenging but attainable set of digital capabilities. These include management of identities across multiple devices, the ability to combine past behaviours and tendencies with realtime contextual awareness, personalised suggestions of next actions in the moment of discovery, and using data from
all interactions to continuously improve insight and execution.
Transformative businesses are embracing a holistic view of what drives sustained, profitable and loyal customer behaviour by integrating their ability to deliver highly engaging, relevant and consistent experiences across all touchpoints. Convenience is a critical goal in delivering this proposition and the technology to achieve it is undeniably mobile.
While we are yet to see a complete shift in purchase point to m-commerce, there has never been a more powerful or impactful shopping companion than the smart mobile device. It connects consumers to vital information and friends, facilitates deals and promotions, and allows people to pay faster and more securely. Smartphones are always-on, always with us and increasingly the critical connection between businesses and customers.
“The most innovative companies embrace a culture of outstanding experience rooted in convenience... focusing on seamless connectivity among all touchpoints”, says David Rosen, chief digital strategist at analytics software firm TIBCO. “This culture is sorting the leaders from the laggards”, and SMEs are best placed to take the lead.