New Zealand’s small businesses are digitising at a rapid pace – pushed by lockdowns, customer demand and fast-changing technology opportunities. The momentum is building as the Government supports upskilling through its Digital Boost initiative and businesses themselves look for ways to improve productivity when skilled workers are in short supply.
The combination of lockdowns, Government support and new technology is transforming the way Kiwi businesses operate – and the change will be permanent.
Lockdowns have kicked digitisation into a higher gear
Being unable to operate a physical store has been a huge factor in forcing even the smallest Kiwi businesses to get online. Many older Kiwis overcame their reluctance to shop online, and once the packages began arriving at the door found themselves loving the experience. Between May 2019 and May 2020, there was a 62% increase in the number of online shoppers aged 60-plus and 172,000 people shopped online for the first time, according to NZ Post research. That trend has continued, particularly in Auckland, where there was a 21% rise in online spending in Q3 this year compared to a year earlier and a 15% increase in the number of Aucklanders shopping online.
Indirectly, our closed borders have also encouraged business owners to invest in technology. Our labour shortage means that hiring the right people has never been more difficult. Kiwi businesses are having to find systems and technology to streamline their operations, rather than simply employing more people.
$20 million in funding to push digitisation in our economy
The Government, cognisant of the labour shortage and lockdown issues, is throwing its weight behind efforts to drive digital upskilling for small businesses. Its Digital Boost package is worth $20 million and aims to support Kiwi businesses to “transition digitally in the Covid-19 world”. MBIE research found that just 63% of small businesses used internal digital tools such as accounting platforms and only 56% of small businesses used external digital tools such as sales and marketing.
This push is another way that New Zealand is aiming to improve its productivity, which lags behind that of other OECD nations. Improving digitisation is closely linked to greater productivity, which in turn raises incomes for all Kiwis.
New technology is removing friction for online shoppers
With customers, businesses and the Government all look for ways to become more digitally savvy, the tech marketplace is continuing to innovate rapidly.
Payment technology is one area where we are constantly finding ways to make online shopping easier for both businesses and their customers. Open API banking, for example, makes services possible today that were almost unimaginable just five years ago.
One example is with Worldline’s new integrated service available in the Xero App Store: Kiwi businesses can now set their Xero invoices with the option to be paid using Online EFTPOS. This provides the opportunity for any of Xero’s 480,000 Kiwi subscribers to reduce their costs and get paid faster. Small businesses can now connect their clients to Online EFTPOS for a simple way to pay by debit.
The low cost of Online EFTPOS for merchants makes this an appealing option for small Kiwi businesses – card fees can be a real pain point for those businesses who do low volumes of transactions. With Online EFTPOS,
Xero subscribers don’t need a terminal or any other hardware to accept EFTPOS payments – and their clients can pay them without a credit card or manual transaction.
That combination of lower fees and smoother payments processing should support a cashflow boost for small businesses in New Zealand.
Investing in innovation pays dividends
Investing the time and money into learning new systems and technology can seem daunting, but it is almost certain to pay dividends. Embracing systems that lift productivity should lead to greater long-term profitability and better potential for growth.
The team at Worldline is here to support your small business smooth out the hurdles to getting online, getting paid and growing your revenue. Get in touch today and talk to us about how we can help.