Contributors
LUCIA LI
GLOBAL PAYMENTS ADVISORY CONSUMER AND RETAIL
HARDIK TRIVEDI
BUSINESS DEVELOPMENT CONSUMER AND RETAIL
Small businesses are and will remain critical to drive value creation in the future of shopping. They are the backbone of many economies. For instance, they constitute 99% of America’s companies, and they’re 40%-50% of the country’s GDP. Despite their impact, small businesses have many unique needs and challenges since they must focus on daily operations given their lack of scale.
Large businesses that can effectively support a small business’s nonessential needs can establish themselves as a top-notch partner. Through this reputation, larger companies can more easily position their products at small businesses or promote small business products on their channels. Below are four ways to do this.
Companies can power small-business growth
Using their resources, companies can offer data and insights to provide direction for a business
Larger companies can act as advisors to small-businesses, empowering them to acheive effective growth and scaling
With the latest data and insights into industry trends, companies can facilitate the adoption of ESG and DE&I values
Companies can facilitate e-commerce by creating a small-business marketplace
Serve as an advisor
Large companies can provide insights and best practices on how small businesses can become more efficient and grow with scale. They have a wealth of information (including through relationships with banks) on topics like taxes and forecasting inventory.
Payments is another area where brands can provide best practices on solutions through relationships with banks. For example, businesses might recommend payment solutions that include contactless payments, digital wallets, faster payments and other payment methods or trends. They may also coordinate sessions where a small business’s suppliers can meet with banks to better understand how payments can improve the supply-chain process.
Then use data to provide more actionable insights
Large companies can analyze payments transaction data to provide various insights to small businesses. Some examples include:
Consumer segmentation
To create a comprehensive view of a small business’s customer segments. This information includes what customers purchase outside the store. This type of information can inform product recommendations and even marketing strategies.
Growth recommendations
Around where a business can sell more products. For instance, geographic analysis can indicate high-growth areas where businesses are underpenetrated or high-performing zip codes where businesses should market more products. Growth opportunities can also center around time-specific recommendations or even strong performance of products that other small businesses sell in the same region.
Fraud protection
Through both mitigation and prevention. In other words, we work with you to stop fraud after it’s occurred, but we also analyze your transactions behind the scenes to prevent fraud before it occurs.
Go beyond advising with a small-business marketplace
E-Commerce constitutes 14 percent of total U.S. retail, and it’s projected to grow at a compound annual growth rate (CAGR) of 11.2% into 2024. Large businesses can use their scale to create an online marketplace for small businesses that may lack the resources to set one up themselves. These spaces allow businesses to purchase products created by smaller businesses. Compass is one example.
Large businesses can also create a business-to-small-business marketplace, which allows small businesses to purchase all the supplies needed to run their businesses. These marketplaces can also serve as an ecosystem through enabling the use of alternative payment methods digital wallets or embedding financial services to open the door to more creative financial services like sophisticated financial loans. L’Oreal’s Salon Centric is one example of this.
And remember your role in supporting diversity equity and inclusion
Beyond their economic role, mom-and-pop shops are the lifeblood of many local communities, which intrinsically connects them to diversity, equity and inclusion. Larger businesses should remember this connection since many are working to establish themselves as organizations that prioritize Environmental, Social, and Governance (ESG) and DE&I. If they truly want to support these initiatives, that means providing cutting-edge services to small businesses including the ones listed above.
Supporting DE&I could even inform new partnership ideas. For instance, business-to-small-business platforms could include when a supplier is a diverse small business owner to incentivize purchases that can improve ESG scores. Alternatively, a large company could offer financial incentives or discounts when purchasing from small businesses.
To learn more about how we can support your business, please contact your J.P. Morgan representative.
Reimagining shopping is more important than ever
Customers expect innovative and convenient shopping experiences, so businesses are innovating around how customers make purchases and engage with brands. Payments is one of these innovations.
Read more about the Future of Shopping
View more Future of Shopping insights
Join us as we explore how specific key industries are affected, how you can future-proof, and what that means for the future.
JPMorgan Chase & Co. Member FDIC. Deposits held in non-U.S. branches are not FDIC insured. All rights reserved. The statements herein are confidential and proprietary and not intended to be legally binding. Not all products and services are available in all geographical areas. Visit jpmorgan.com/disclosures/payments for further disclosures and disclaimers related to this content.
