Since 2015, ShopKeep has put together a survey designed to gather insights on the current state of small business, in addition to the opinions and concerns of the small business community.
In preparation for National Small Business Week 2018, we are excited to share our latest survey results, and our companion report, The ShopKeep Small Business Pulse. The report, which highlights responses from ShopKeep customers on a variety of topics, revealed some interesting insights. One significant finding is the slower-than-anticipated adoption of mobile payments in brick-and-mortar stores.
ShopKeep’s Small Business Pulse found that just 24% of respondents have seen a slight increase in usage of mobile payments over the past two years, as opposed to 68% who feel that mobile payment volume has remained more or less the same. For comparison, when ShopKeep asked small business owners about mobile payments in 2016, 42% of respondents expected mobile payments to account for 50% of consumer purchases.
Findings like this one, lead us to believe that there is still significant confusion in the marketplace when it comes to digital wallets and mobile payments. We’ll discuss this in further detail, along with the rest of the results of the survey, later on in this post.
About the Respondents
The ShopKeep team surveyed over 1,700 existing brick-and-mortar small business owners across a variety of business categories, including retail (50%), quick service restaurants (21%), full-service restaurants or bars (8%), and businesses that identify as a hybrid business or other (21%).
The size of these businesses varied, with 50% of survey respondents stating that they have at least 1-3 full-time employees, 25% have more than 4 full-time employees and 44% of respondents having at least 1-3 part-time employees, and another 38% with more than 4 full-time employees.
Additionally, over half of the respondents (57%) were female business owners compared to 39% of male respondents, and 4% who chose not to identify. A positive sign considering that women’s self-employment rate has historically been lower than men’s.
According to the Census Bureau’s Survey of Business Owners, Women make up more than 50% of the U.S. population. The reality that women now control 51% of U.S. personal wealth and are the primary source of income in over 40% of households along with this simple fact highlights women’s importance to the U.S. business community.
One common thread shared among all respondents is the use of ShopKeep’s iPad and Android tablet point of sale (POS) system. At a high level, this indicates a certain trust in technology and the shared belief that by adopting new technologies, a business can best position itself for sustained success.
The questions asked in our 2018 survey spanned a wide range of topics including business challenges, business goals, and the adoption of mobile wallets and tablet point of sale technology. Here are some of the key findings from this small business index:
1. Profitability is the most significant challenge for small business owners.
49% of small business owners identified ‘Maintaining Profitability’ as the most significant business challenge they face. Not too surprising since according to a recent study, 82% of businesses that fail, do so because of cash flow problems.
Despite the fact that these respondents are adopters of tablet point of sale technology, a tool that empowers them with the data they need for better cash flow management, they are no different than the 41% of small business owners within the broader small business community who have experienced cash flow issues.
This data reinforces the idea that even with the best resources and tools at your fingertips, there is no substitute for adequate cash flow management.
With profitability cited as the primary challenge for most small businesses across the United States, it’s no surprise that very few respondents are focused on expansion. This leads us to our second survey finding:
2. Small business owners are focused on growth, not expansion.
Only 23% of small business owners want to expand and open a new location.
When asked to identify the top three business goals that they will be focusing on over the next three years, an overwhelming amount of respondents (88%) stated increasing sales as their primary business goal. This was followed by improving marketing performance (32%) and improving the in-store customer experience (28.93%).
The lack of focus on expansion by small business owners is a smart move in our opinion since growing too fast can be just as disastrous for small businesses as no growth at all.
3. Small business owners are still slow to jump on the ecommerce bandwagon.
Interestingly enough, despite the focus on increasing sales, ecommerce is not a prominent part of the ‘growth’ equation for these small business owners.
Brick-and-mortar businesses that open an online store are making 28% more in revenue, yet, only 23% of respondents said ecommerce was a key business goal. We assume that despite the advantages of transitioning online, the operational logistics associated with ecommerce discourage small business owners from diversifying their online presence with a digital storefront.
4. Mobile payments growth is flat, despite promises of increased transaction speed and convenience.
In 2016, in line with predictions at the time, we asked small business owners if they thought 50% of consumers would use mobile wallet payments by 2018. 42% of them said yes.
According to a recent Pymnts.com survey, this prediction was a little aggressive:
- 12.8% of US adults with smartphones have tried Apple Pay
- 23.7% of US adults with smartphones have tried Walmart Pay
- 5.1% of US adults with smartphones have tried Samsung Pay
- 6.9% of US adults with smartphones have tried Android Pay
The results from the Pymnts.com survey align with the responses we received. Only 68% of small business owners say that mobile wallet usage has remained more or less the same during the past few years, while 24% say they have seen an increase.
The ShopKeep Small Business Pulse is a report designed to share valuable insights, sentiments, and challenges that today’s small business owners face. Click on the banner below for free access to the full report.
Feel free to let us know what you think, and don’t forget to share the report.
Methodology: ShopKeep issued this survey to about 24,000 customers, receiving survey responses from 1,794 small and independent business owners across the U.S. and Canada with at least one brick and mortar store location in February 2018. This resulted in a margin of error of +/- 2% for the results of the survey. In the Age category, Millenials are classified as 18-34 years old, Gen Xers are classified as 35-54 and Baby Boomers are classified as 55+.